N.J. Admin. Code § 5:25-4.3

Current through Register Vol. 56, No. 8, April 15, 2024

Section 5:25-4.3 - Application approval

(a) Applicants for approval of a private plan shall submit a written application in letter form, the required fee in the amount of $ 5,000 which is non-refundable and any additional information the Department may require.

(b) Each application for approval shall contain all such information as may be necessary to determine that the plan if approved will conform to the requirements established by 5:25-4.2. Such information shall include but not be limited to, the following:

1. Warranty Guarantor:

i. The name, full street and postal address and telephone number of the warranty guarantor;

ii. The documents necessary for the qualifications of the warranty guarantor, as required by 5:25-4.2(j);

iii. A copy of the agency agreement between the warranty administrator and the warranty guarantor, if any.

2. Warranty Administrator:

i. The name, full street and postal address and telephone number of the warranty administrator if different from the warranty guarantor;

ii. Copy of the Certificate of Incorporation if the warranty administrator is a corporation, copy of the Partnership Agreement if the warranty administrator is a general or limited partnership, other business organization papers if organized under another form;

iii. The names, addresses and positions of all principals of the corporation, partnership or other type of business entity and the percent of interest held by each.

3. Agents:

i. The name, full street and postal address of the agents for service of process for the warranty guarantor and warranty administrator who shall be a resident of the State of New Jersey or a corporation licensed to do business in New Jersey.

4. Division of responsibility:

i. Specific information in narrative form on the division of responsibility between the builder and the warranty guarantor for the processing and satisfaction of claims under the warranty security plan, detailing such information as the coverage periods under the warranty for which either the builder or the warranty guarantor is primarily responsible.

5. Rate schedule and charges:

i. The rate schedule of charges by the warranty guarantor showing all rate classes and the manner in which charges are determined, including a justification for any deductible amounts charged to an owner, builder or the warranty administrator;

ii. The rate schedule of charges or fees, if any by the warranty administrator for builder membership in the private plan;

iii. A complete breakdown of proposed plan expenses for the warranty administrator, expressed in percent of the total premium dollars collected, including but not limited to expenses for overhead costs, advertising, dispute settlement services, claims processing, etc.

6. Financial security:

i. A certified, audited financial statement of income and expense for the warranty administrator, showing assets and liabilities for the fiscal year directly preceding the date of the application; and an estimated statement of income and expenses for the current fiscal year; and a certified statement of assets and liabilities as of the date of the application;

ii. A full description of the manner by which financial security is assured and through which sufficient funds to pay all claims which may be reasonably anticipated are available. The Plan's procedures for receipt of premiums and other funds shall be included.

7. Complaint/claims process:

i. A full description of the complaint/claims process proposed for use by the private plan which clearly specifies the respective responsibilities of the warranty administrator and the warranty guarantor, if different entities. The description shall include all time limits established for action by any party;

ii. Specific information of the plan's technical "Quality Standards" and Major Structural Defects Standards, including all exclusions, with full description of how the plan will deal with such exclusions.

8. Copy, samples and submissions:

i. Final copy of samples of the notice of warranty, claims forms and dispute settlement procedures required by 5:25-4.2(e). The name and address of the agency or agencies that will provide settlement services for the plan must be included and a full description of the manner in which dispute settlement will be conducted under the plan.

ii. Final copy samples of any contractual agreements between member builders and the warranty administrator, including indemnification agreements, member application and all other forms;

iii. Final copy samples of the homeowners' package, including the warranty, insurance policy and all forms used;

iv. Copy of the plans' builder information program literature.

9. Federal Trade Commission regulations:

i. A legal opinion from the plan's attorney regarding the applicability of any regulation administered by the Federal Trade Commission and the Magnuson-Moss Warranty Act.

10. Affidavit of application certification:

i. Provide an affidavit signed by the responsible partners and notarized certifying that in the event the approval is granted to the Private Plan by the Department of Community Affairs of this filed Application, that the Warranty Guarantor, Warranty Administrator and Agents are fully and completely aware of all the requirements and conditions of the Act and Regulations for the Private Plan and all Amendments thereto; and that they will abide by all requirements and conditions of the Act and Regulations and Amendments thereto; and that they will operate the Plan exactly as stated in their Application without any deviation from the filing.

(c) Each application for approval as a private alternate new home warranty security plan shall be submitted in the following manner:

1. Two sets of the required information and documents shall be submitted in separate binders, maximum size to be 8-1/2" by 11", fastened at the top or side in such a manner as to permit the reading of each page without requiring removal, the first page of which shall be a table of contents.

2. All information and documents shall be arranged in the order set forth in (b) above.

3. Each binder shall note the name and address of the person responsible for preparation of the application on the front cover.

4. The right side of the first page of each section shall bear a tab numbered in conformity with the table of contents. Each tab shall be visible without the necessity of lifting any other tab.

5. If a section or document is omitted a single sheet of paper, properly tabbed, shall be inserted containing a description of what is omitted and an explanation as to the reason for the omission.

6. Any information or document which cannot practicably be included in the binder shall be submitted in a separate folder and a notation of such shall be in the binder.

(d) Each application for approval of a private plan shall be accompanied by a non-refundable application fee in the amount of $ 5,000.

(e) Upon receipt of a complete application for approval, in proper form, accompanied by payment of the proper fee, the Department shall, within 10 business days, issue a notice of filing indicating the application is complete as to contents and form. This notice shall not be construed as an approval of the application or any portion thereof.

(f) Within 90 days from the date of the notice of filing or notice of correction as provided in (g) below, the Department shall enter an order approving the application, provided the Department affirmatively determined that the private plan meets the requirements set forth in the Act and these regulations and that there is reasonable assurance that the private plan will act in accordance with the Act and these regulations.

(g) When the Department determines that any of the requirements of the Act or these regulations have not been met it shall notify the applicant of the deficiencies and the applicant shall make the necessary corrections within 30 days.

(h) In the event an order of approval is not issued within 90 days from the date of the notice of filing or notice of correction, no notice of rejection is issued or the applicant has not consented to an extension, the application shall be deemed to have been denied for the purposes of appeal.

(i) In the event the Department finds the application does not meet the requirements of the Act and these regulations it shall issue a notice of rejection which shall include the findings of fact upon which the order is based.

(j) Approval shall be valid for a period of two years from the date of approval. Applications for reapproval shall be filed with the Department not later than 60 days before the expiration of the previous approval. No private plan shall permit approval to lapse so long as any home is covered by the warranty secured by the program. Applications for reapproval shall be accompanied by a $ 1,000 fee and shall include such information as may then differ from that submitted on the original application for approval. If nothing has changed then the application for renewal of approval shall so certify. The Department shall then review the application for renewal and if required, stipulate any conditions imposed for renewal.

(k) If at any time during the period of approval any material fact stated or described in the application for approval shall change, the applicant shall file an amended application with the Department within 30 days the change takes place. No change, except as may be made outside the control of the applicant, shall be made without prior approval of the Department.

1. Whenever a private plan shall seek to substitute one warranty guarantor or administrator for another, such shall be permissible, provided that the rights and benefits due owners under the plan, shall not be materially affected.

N.J. Admin. Code § 5:25-4.3

Repeal and New Rule, R.1986 d.141, effective 5/5/1986.
See: 17 New Jersey Register 2816(a), 18 New Jersey Register 959(a).