Current through Register Vol. 56, No. 23, December 2, 2024
Section 11:1-20.5 - Cancellation or nonrenewal based on loss of or reduction in available insurance capacity(a) Every cancellation or nonrenewal based upon loss of or reduction in available insurance capacity shall be supported by the following documentation: 1. A narrative description of the specific facts underlying the insurer's loss of or reduction in capacity.2. Identification of the individual risk(s) or line, class or subclass of insurance, as applicable, proposed for termination and an explanation of the basis for the selection, which shall demonstrate that the insurer's selection is not arbitrary, capricious or unfairly discriminatory. An unsupported statement, such as "underwriting judgment", shall not constitute a valid explanation.3. With respect to terminations subject to N.J.A.C. 11:1-22, an explanation of how the loss of or reduction in capacity affects the insurer's risks throughout the line, class or category of insurance proposed for cancellation and/or nonrenewal.4. An explanation of why cancellation or nonrenewal is necessary to cure the capacity problem and why other measures, including but not limited to cessation of new business writings, do not present a viable alternative to termination of existing business; and5. With respect to terminations subject to N.J.A.C. 11:1-22, an explanation of how the cancellation or nonrenewals will be implemented with respect to individual risks and the steps that will be taken to ensure that the cancellation/nonrenewal decisions will not be applied in an arbitrary, capricious or unfairly discriminatory manner.(b) Whenever an insurer proposes to cancel or nonrenew, on an individual basis, a policy which is subject to the provisions of this subchapter due to loss of or reduction in insurance capacity, the insurer shall furnish the Department with written notice of the termination. The notice shall include the information set forth at (a)1, 2 and 4 above and shall be mailed to the Department at the same time notice of termination is mailed or delivered to the insured.N.J. Admin. Code § 11:1-20.5
New Rule, R.1987 d.114, effective 2/17/1987.
See: 18 N.J.R. 2301(b), 19 N.J.R. 359(a).