N.J. Stat. tit. 17, ch. 30B

in effect

N.J. Stat. § 17:30B-1 Short title

This act shall be known as and may be cited as the Joint Underwriting Association Act. L.1974, c. 106, s. 1, eff. Sept. 19, 1974.

N.J. Stat. § 17:30B-2 Purpose; types of insurance, annuities and surety bonds to which act applicable

a. The purpose of this act is to avoid financial loss to and to reduce financial burdens on claimants and policyholders because of the insolvency of insurers, to authorize the creation of special underwriting associations to assume certain obligations of insolvent insurers and to continue, without interruption and without additional cost, coverage for claimants and policyholders who transfer their rights for unearned premiums from the said insolvent insurers to said associations, and to provide a means by which the costs of such coverage can be equitably assumed. b. This act shall apply to all kinds of direct insurance, except ocean or wet marine, life insurance, accident and health insurance, workers' compensation insurance, title insurance, annuities and surety bonds written by any company enumerated in section 10 c. of this act. L.1974, c. 106, s. 2, eff. Sept. 19, 1974. Amended by L.1977, c. 278, s. 1, eff. Oct. 31, 1977.

N.J. Stat. § 17:30B-3 Definitions

As used in this act: a. "Commissioner" means the Commissioner of Insurance of this State; b. "Guaranty Association" means the New Jersey Property-Liability Insurance Guaranty Association, created under P.L.1974, c. 17 (C. 17:30A-1 et seq.); c. "Association" means a Special Joint Underwriting Association created pursuant to section 4; d. "Insolvent insurance company" means (1) an insurer admitted or authorized to transact the business of insurance in this State either at the time the policy was issued or when the insured event occurred, and (2) who is determined to be insolvent by a court of any competent jurisdiction; e. "Servicing carrier" means a carrier licensed to provide insurance of the kind specified in section 2 B. and designated by an association, with the approval of the commissioner, to assist an association in fulfilling its obligations. L.1974, c. 106, s. 3, eff. Sept. 19, 1974.

N.J. Stat. § 17:30B-4 Establishment; membership; immunity from liability for execution of powers and duties

The commissioner shall have authority to establish, as he shall deem necessary, one or more associations to assume the unexpired policy obligations of insolvent insurance companies from the date of assumption established by regulation of the commissioner. The membership of each association shall consist of all insurers authorized to write, within this State, on a direct basis, the same kind of direct insurance in which the commissioner has authorized participation by the association. Every such insurer shall be a member of the association and shall remain a member so long as the association is in existence as a condition of its authority to continue to transact such kinds of insurance in this State. The provision of any other law of this State notwithstanding, there shall be no liability on the part of and no cause of action of any nature shall arise against any member insurer, the association or its agents or its employees, the board of directors or the commissioner or his representatives for any action taken by them in the performance of their powers and duties under this act; provided, however, that such immunity from liability shall not extend to such individuals with respect to fraudulent or criminal acts. L.1974, c. 106, s. 4, eff. Sept. 19, 1974. Amended by L.1979, c. 449, s. 1, eff. Feb. 22, 1980.

N.J. Stat. § 17:30B-5 Powers

An association shall, pursuant to the provisions of this act and the plan of operation, have the power: a. To assume the unexpired policy obligations of insolvent insurance companies: b. To assess each of its members and to reimburse them for such assessments, at such times as directed by the commissioner; c. To reimburse the servicing carriers out of the Joint Underwriting Association Fund; d. To present claims to the Guaranty Association for unearned premiums on the assumed policies; e. To adopt bylaws for the regulation of its affairs and the conduct of its business; f. To sue and be sued; g. To employ, subject to the approval of the commissioner, such employees as may be required in the judgment of the association, to carry out the purposes of this act, and to fix and pay their reasonable compensation from the Joint Underwriting Association Fund; h. To borrow funds at prevailing interest rates; i. To perform such other functions as may be deemed necessary by the commissioner to carry out the purposes of this act. L.1974, c. 106, s. 5, eff. Sept. 19, 1974.

N.J. Stat. § 17:30B-6 Board of directors; treasurer; bonds

a. The board of directors of an association shall consist of not less than five nor more than nine members serving terms as established in the plan of operation hereinafter described. All directors of the board shall be appointed by the commissioner, after consultation with the members of the association, from and among the officers of the members of the association. Vacancies on the board shall be filled for the remaining period of the term by the commissioner in the same manner. b. The commissioner shall also appoint a treasurer who shall serve as the custodian of each association fund. c. Each director of the association shall execute a bond to be conditioned upon the faithful performance of the duties of such director in such form and amount as may be prescribed by the commissioner. Such bonds shall be filed in the office of the Secretary of State. At all times thereafter the directors and treasurer of the association shall maintain such bonds in full force and effect. All costs of such bonds shall be borne by the association. L.1974, c. 106, s. 6, eff. Sept. 19, 1974.

N.J. Stat. § 17:30B-7 Plan of operation; submission by directors; certification of approval; enactment by commissioner; amendments

a. The directors of the association shall submit to the commissioner, within such time as he sets forth by regulation, for his review and approval, a proposed plan of operation. Such a proposed plan shall include provisions for: assessment of all members of an amount necessary to finance a Joint Underwriting Association Fund; notification to insureds regarding the assumption of their policies from the insolvent insurance companies; recoupment of unearned premiums for all insureds whose policies are assumed; procedures for processing applications from servicing carriers for reimbursement; management of the association; and such other provisions as may be deemed necessary by the commissioner to carry out the purposes of this act. b. The proposed plan shall be reviewed by the commissioner and approved by him if he finds that such plan fulfills the purposes set forth in section 2 a. of this act. In his review of the proposed plan the commissioner may consult with the directors and the members of the association and any other individual or organization. If the commissioner approves the proposed plan he shall certify such approval to the directors and said plan shall take effect at such date as directed by the commissioner. If the commissioner disapproves all or any part of the proposed plan of operation, he shall return same to the directors with a statement, in writing, of the reasons for his disapproval and any recommendations he may wish to make. The directors shall either accept within 5 days the commissioner's recommendation, or propose a new plan, which shall be submitted to the commissioner within 10 days. If the directors fail to comply with the foregoing terms of this paragraph, the commissioner shall promulgate a plan of operation and certify same to the directors. Any such plan promulgated by the commissioner shall take effect no later than 10 days after certification to the directors. c. The directors may, for good cause, amend the plan of operation at any time, subject to the approval of the commissioner. d. The commissioner may review the plan of operation whenever he deems necessary and amend said plan after consultation with the directors. L.1974, c. 106, s. 7, eff. Sept. 19, 1974.

N.J. Stat. § 17:30B-8 Joint underwriting association fund; assessment of members; exemption from fees and taxes

a. There shall be created within each association a fund to be known as the Joint Underwriting Association Fund for the purpose of providing the finances necessary for the plan of operation of the association. The fund shall also be used to reimburse the servicing carriers for all sums expended in fulfilling their obligations arising under the assumed policies, including all reasonable administrative costs. The funds shall be administered by the association with the approval of the commissioner. b. For the purpose of obtaining the moneys necessary to meet the requirements of the fund, each association shall assess each member according to the plan of operation as approved by the commissioner. c. Any insurer, which becomes authorized to write insurance after the effective date of this act and which would have been required to join an association created under the terms of this act if it had been authorized to write insurance at that time, shall become a member of the association immediately following such authorization. The determination of any such insurer's participation in the association shall be made according to the plan of operation as approved by the commissioner. d. Upon termination of an association pursuant to section 14d of this act and after discharge and satisfaction of all liabilities then outstanding to claimants, policyholders, servicing carriers, and member insurers, all moneys and assets still remaining in the Joint Underwriting Association Fund shall be paid over by the association treasurer into the Guaranty Association. e. Associations shall be exempt from payment of all fees and all taxes levied by this State or any of its subdivisions. L.1974, c. 106, s. 8, eff. Sept. 19, 1974.

N.J. Stat. § 17:30B-9 Custodian; disbursements

The treasurer of each association shall be the custodian of the Joint Underwriting Association Fund. All disbursements from said fund shall be made by the treasurer according to the plan of operation and any rules and regulations promulgated by the commissioner. L.1974, c. 106, s. 9, eff. Sept. 19, 1974.

N.J. Stat. § 17:30B-10 Surcharge on policies; credit to joint underwriting association fund of recovered moneys

a. A surcharge on insurance policies of the kind which are being assumed by the associations created hereunder shall be levied in amounts sufficient to recoup over a reasonable length of time a sum equal to the amounts necessary for reimbursement pursuant to section 5 b. of this act. The surcharge shall be a separate charge to the insured in addition to the premium to be paid and shall be reflected as such in the policy. The insurer shall be prohibited from absorbing such surcharge as an inducement for insurance or any other reason. b. The amount of such surcharge shall be determined by the commissioner, but in no event shall the surcharge on any policy exceed one-half of 1% of the policy premium. c. Whenever moneys are recovered as a result of claims arising on or after September 19, 1974 from Gateway Insurance Company, Empire Mutual Insurance Company or Allcity Insurance Company insurers or lending institutions financing insurance policies for any of said companies with respect to policies for New Jersey residents or any of their brokers or agents, said moneys shall be credited to the Joint Underwriting Association Fund for use by the commissioner with respect to future insolvencies. L.1974, c. 106, s. 10, eff. Sept. 19, 1974. Amended by L.1975, c. 76, s. 1, eff. May 1, 1975; L.1977, c. 278, s. 2, eff. Oct. 31, 1977.

N.J. Stat. § 17:30B-11 Statement; filing

An association shall file at such time as directed by the commissioner a statement which shall contain such information and be in such form as required by the commissioner. The commissioner may at any time require an association to furnish him with additional information with respect to its operations. L.1974, c. 106, s. 11, eff. Sept. 19, 1974.

N.J. Stat. § 17:30B-12 Examination by commissioner; hearings

The commissioner may make an examination into the affairs of an association or any of its members whenever he deems it necessary. In undertaking any examination he may hold hearings pursuant to the procedures provided in chapter 1 of this Title and P.L.1968, c. 410 (C. 52:14B-1 et seq.). L.1974, c. 106, s. 12, eff. Sept. 19, 1974.

N.J. Stat. § 17:30B-13 Annual reports of commissioner

In addition to the annual reports of the commissioner required by R.S. 17:1-9, the commissioner shall submit to the Legislature an annual report embracing the activities, affairs and condition of any association. Said report may contain specific recommendations the commissioner may wish to make concerning the association, including his evaluation of the association's effectiveness in fulfilling the purposes of this act. L.1974, c. 106, s. 13, eff. Sept. 19, 1974.

N.J. Stat. § 17:30B-14 Powers of commissioner

The commissioner may: a. Promulgate reasonable rules and regulations to carry out the purposes of this act; b. Suspend or revoke, after notice and hearing, the certificate or authority to transact insurance in the State of any member insurer which fails to comply with the provisions of this act, rules or regulations promulgated thereunder or any plan of operation. In addition to any other sanctions herein or otherwise provided by law, the commissioner may levy a penalty on any member insurer which fails to pay or delays in paying an assessment when due. For each month that an insurer fails to pay or delays in paying the assessment on a timely basis, the penalty shall not exceed 5% of the unpaid assessment then outstanding. For all other violations, the penalty shall not exceed $5,000.00 per violation. c. Revoke the designation of any servicing carrier if he finds claims are being handled unsatisfactorily; d. Terminate any association when he deems its existence no longer necessary to effectuate the purposes of this act. e. Require upon the termination of any association, a report of its activities which shall set forth a complete operating and financial statement; make inspections of any association's books, accounts and records including its receipts and disbursements, as he shall deem necessary. L.1974, c. 106, s. 14, eff. Sept. 19, 1974.

N.J. Stat. § 17:30B-15 Severability

If any provision of this act or the application thereof to any person or circumstance is held invalid, the invalidity shall not affect other provisions or applications of this act which can be given effect without the invalid provision or application, and for this purpose the provisions of this act are declared to be severable, provided however that if section 10 is held invalid, the entire act shall be invalid. L.1974, c. 106, s. 15, eff. Sept. 19, 1974.

N.J. Stat. § 17:30B-16 Construction; supersedure of inconsistent laws

a. This act shall be liberally construed to effectuate the purposes set forth in section 2 a. b. All laws and parts of laws of this State inconsistent with this act are hereby deemed superseded to the extent of such inconsistency. L.1974, c. 106, s. 16, eff. Sept. 19, 1974.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.njleg.state.nj.us/legislative-activity/statutesFetched: 10/17/2026