N.J. Admin. Code § 11:27-4.1

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

Section 11:27-4.1 - Minimum standards for optional installment premium payments

(a) Every insurer authorized to transact medical malpractice liability insurance in this State shall offer its insureds an installment premium payment option on such policies, and shall file manual rules which shall include:

1. A minimum initial deposit required, which shall be no more than 50 percent of the estimated total premium;

2. A schedule for the payment of premiums on an installment basis which shall provide for intervals of at least two months;

3. No interest charges;

4. An installment charge of the lesser of one percent of the total premium or $25.00 per installment; and

5. A payment plan as listed in (b) below; or a payment plan already in existence with terms no less favorable than those in (b) below.

(b) Every insurer authorized to transact medical malpractice liability insurance in this State shall offer the following installment premium payment plans:

1. For annual premiums up to and including $80,000, a three-installment payment plan payable as follows:

i. An initial payment equal to 50 percent of the premium;

ii. A second payment equal to 25 percent of the premium; and

iii. A third payment equal to 25 percent of the premium.

2. For annual premiums in excess of $80,000, a five-installment payment plan payable as follows:

i. An initial payment of 30 percent of the premium;

ii. A second payment equal to 25 percent of the premium;

iii. A third payment equal to 20 percent of the premium;

iv. A fourth payment equal to 15 percent of the premium; and

v. A final payment equal to 10 percent of the premium.

(c) Additional premium resulting from changes to the policy shall be spread over the remaining installments, if any. If there are no remaining installments, additional premium resulting from changes to the policy shall be billed immediately as a separate transaction.

(d) Insureds shall have the option of paying the premium in full at any time without incurring additional fees.

(e) In the event that an insured fails to pay an installment, a policy may be cancelled for non-payment of premium in accordance with the provisions of N.J.A.C. 11:1-20.2(e).

N.J. Admin. Code § 11:27-4.1