N.J. Admin. Code § 11:3-20.8

Current through Register Vol. 56, No. 21, November 4, 2024

Section 11:3-20.8 - Refund or credit of an excess profit

(a) If the Commissioner determines that an insurer is required to refund excess profits, the Commissioner shall issue written notice to the insurer of his or her determination. The notice shall contain a written explanation of the basis on which such a determination was made and shall advise the insurer that it may request a reevaluation of the determination as set forth at (b) below.

(b) An insurer may request a reevaluation of the determination that it is required to refund an excess profit by submitting a written request to the Department within 30 days of the receipt of the notice in (a) above.

1. The written request shall set forth the legal or factual basis for the requested reevaluation.

2. If the basis for the requested reevaluation is good faith error or excusable mistake, the request shall be accompanied by a written request to make a supplemental filing pursuant to 11:3-20.1 1.

3. The Commissioner shall notify the insurer in writing of his or her determination within 60 days, which shall constitute an initial agency decision. If no written request for a reevaluation is made as set forth in (b)1 and 2 above, the original notice of determination shall constitute a final agency decision.

(c) The insurer shall submit to the Commissioner a fair, practicable and nondiscriminatory plan to refund or credit to policyholders the excess profit or a plan to reinvest into New Jersey within 30 days after receipt of the written notice referenced in (a) above or, if an insurer requests a reevaluation, within 30 days after notification, in accordance with (b)3 above, is made to the insurer that it is required to refund an excess profit subsequent to the reevaluation having been performed.

1. The refund or credit plan shall be subject to approval by the Commissioner. Any refund or credit plan shall provide for the refund or credit to such group or groups of policyholders as the Commissioner may determine to be reasonable in consideration of the insurer's financial and business circumstances.

2. If the refund or credit plan is disapproved, the Commissioner shall issue a written notice to the insurer containing the reasons for disapproval, and specifications for corrections of the plan.

(d) Upon approval of the insurer's refund or credit plan, the Commissioner shall issue an order requiring the insurer to distribute all excess profit according to the approved plan.

(e) Within 15 days after the excess profit has been refunded or credited to policyholders, the insurer's corporate official shall certify that such refund or credit has occurred.

(f) Any refund or credit shall be deemed a policyholder dividend applicable to the year in which it is incurred for reporting in subsequent excess profit reports.

N.J. Admin. Code § 11:3-20.8

Amended by R.1991 d.17, effective 1/7/1991.
See: 22 N.J.R. 2082(b), 23 N.J.R. 106(a).
Provision at (a) added to require certain information in notice; new (b) added describing procedure and content of request for reevaluation.
Amended by R.2002 d.386, effective 12/2/2002.
See: 34 N.J.R. 1093(a), 34 N.J.R. 4053(a).
In (b)3, substituted "an initial" for "a final" following "constitute".
Amended by R.2004 d.97, effective 3/15/2004.
See: 35 N.J.R. 3098(a), 36 N.J.R. 1426(a).
In (c), rewrote the introductory paragraph, and inserted the last sentence in 1; in (e) substituted "profit has" for "profit have".
Amended by R.2008 d.86, effective 4/7/2008.
See: 39 N.J.R. 4057(a), 40 N.J.R. 1876(a).
In the introductory paragraph of (c), inserted "or a plan to reinvest into New Jersey".