N.J. Admin. Code § 11:3-8.12

Current through Register Vol. 56, No. 17, September 3, 2024

Section 11:3-8.12 - Acceptance criteria

(a) Acceptance criteria are the written standards by which an insurer accepts or rejects new business, and/or renews or nonrenews existing business. An insurer shall have separate acceptance criteria for new and renewal business.

(b) An insurer is prohibited from using any of the following in its acceptance criteria:

1. Any factor set forth in the New Jersey Law Against Discrimination, 10:5-12 (l), except in the case of disability set forth in (b)4 below;

2. The territory in which the applicant or insured resides;

3. The occupation, education or insurance score of the applicant or insured; provided that, as it relates to occupation, this paragraph shall not be construed to prohibit the operation of an insurer that has been approved by the Department to limit coverage to persons who are members or employees of members of certain groups, clubs or organizations, such as trade associations or the military (so-called membership companies) when membership is a condition for insurance and is uniformly and consistently applied on a Statewide basis;

4. Any mental or physical impairment of the insured unless such disability impairs the ability to operate an automobile safely;

5. Criteria based on whether the insured or a member of the insured's household purchases or continues to purchase other insurance or services from the insurer or its affiliates, agents or other companies, except that this provision shall not prohibit a rate discount; and

6. Criteria based upon a policyholder's application for coverage required to be provided by law, such as minimum limits of liability set forth in 17:28-1.1, or criteria requiring the purchase of coverage not otherwise required by law, such as physical damage coverage.

(c) An insurer's acceptance criteria shall be maintained by the insurer in writing and shall indicate the effective date thereof. An insurer's acceptance criteria shall be made available to the Department upon request.

(d) The only acceptance criteria that may be used to non-renew a policy are those that were in effect at the initiation of the policy period during which a notice of non-renewal is issued.

1. The requirement in (d) above shall not be construed to limit an insurer's ability to modify its acceptance criteria from time to time. However, the modified guidelines may only be applied to policies issued or renewed subsequent to the effective date of such modification as set forth in (d) above.

2. The requirement in (d) above does not apply to the first policy period following November 18, 2011, except for amendments to the acceptance criteria made after November 18, 2011.

3. The operative date of this subsection is November 18, 2011.

(e) If the Department finds that one or more of an insurer's acceptance criteria violates the requirements of (b) above, the Department may order the insurer to cease using such acceptance criteria in accordance with the process in N.J.A.C. 11:17D.

(f) Every insurer shall file a certification with the Department in the form set forth in the subchapter Appendix, incorporated herein by reference, signed by an individual authorized to sign such a certification on behalf of the insurer. The certification shall state that the insurer is not using any of the prohibited acceptance criteria set forth in (b) above.

(g) All certifications shall be submitted to the Department at the following address:

New Jersey Department of Banking and Insurance

Office of Property/Casualty

20 West State Street

PO Box 325

Trenton, NJ 08625-0325

N.J. Admin. Code § 11:3-8.12

New Rule, R.2008 d.380, effective 12/15/2008 (operative January 1, 2009).
See: 40 N.J.R. 3572(a), 40 N.J.R. 6970(b).
Recodified from N.J.A.C. 11:3-8.11 and amended by R.2011 d.242, effective 9/19/2011.
See: 42 N.J.R. 1984(a), 43 N.J.R. 2525(a).
Rewrote the section. Former N.J.A.C. 11:3-8.12, Separability, recodified to N.J.A.C. 11:3-8.13.
Amended by R.2012 d.145, effective 8/20/2012.
See: 44 N.J.R. 1313(a), 44 N.J.R. 2129(b).
In (b)5, deleted "under common management or ownership" following "companies".