N.J. Admin. Code § 11:27-10.3

Current through Register Vol. 57, No. 1, January 6, 2025

Section 11:27-10.3 - Structured settlement bond/security requirements

(a) Pursuant to N.J.S.A. 17:30D-27, the judgment debtor or the judgment debtor's insurer shall post a bond or security or, with the written consent of the judgment creditor, assign, as set forth in (b) below, its periodic payment obligations to an insurer authorized to write insurance business in New Jersey, in order to assure full payment of non-economic damages awarded in excess of $ 1 million, or as otherwise agreed to by the parties in a medical malpractice matter. The bond or other security requirements are specified below:

1. A bond shall not be deemed adequate unless it is written by a company that is authorized to do business in this State and is rated A-, or better, by A.M. Best Company or maintains a comparable rating with Standards & Poor's, Moody's Investors Services or Fitch Ratings. A "comparable rating," means a rating of at least A- from Standards & Poor's, at least A3 from Moody's Investors Services, or at least A- from Fitch Ratings.

i. No bond may be cancelled or be subject to cancellation unless at least 60 days advance written notice is filed with the court and the claimant.

2. A letter of credit may also serve as security. Letters of credit shall comply with the requirements of N.J.A.C. 11:2-28.1 0.

3. Additionally, security deposits shall adhere to the requirements of N.J.A.C. 11:2-32, Custodial Deposits.

4. No separate bond or security shall be required for structured payment agreements funded with an annuity that is issued by a company that is rated A-, or better, by A.M. Best Company or maintains a comparable rating with Standards & Poor's, Moody's Investors Services or Fitch Ratings. A "comparable rating," means a rating of at least A- from Standards & Poor's, at least A3 from Moody's Investors Services, or at least A- from Fitch Ratings.

(b) A judgment debtor or a judgment debtor's insurer may, with the written consent of the judgment creditor, enter into an assignment agreement with an insurer that meets the requirements set forth in (a) above with respect to an insurance company that issues a bond to secure the performance of a structured settlement agreement.

N.J. Admin. Code § 11:27-10.3

Amended by R.2008 d.205, effective 7/21/2008.
See: 40 N.J.R. 1748(a), 40 N.J.R. 4329(a).
Rewrote the introductory paragraph of (a), the introductory paragraph of (a)1, and (a)4; and added (b).