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

N.J. Stat. tit. 17, ch. 17
in effect

N.J. Stat. § 17:17-1 Kinds of insurance

17:17-1. Ten or more persons may form a corporation for the purpose of making of any kinds of insurance, as follows: a. Against direct or indirect loss or damage to property, including loss of use or occupancy by fire, smoke; smudge; lightning; tempest on land, including windstorm, tornado and cyclone; earthquake; collapse of buildings; hail; frost or snow; weather or climatic conditions, including excess or deficiency of moisture, flood, rain or drought, rising of the waters of the ocean or its tributaries; bombardment; invasion; insurrection; riot; civil war or commotion; military or usurped power; vandalism or malicious mischief; striking employees; explosion, whether fire ensues or not, except explosion of steam boilers and flywheels; and arising from the use of elevators, aircraft, automobiles or other vehicles; against loss or damage by insects or disease to farm crops or products and loss of rental value of land used in producing the crops or products. b. Against any kinds of loss or damage to: Vessels, craft, aircraft, cars, automobiles and vehicles of every kind, including all kinds of automobile and aircraft insurance (excepting insurance against loss by reason of bodily injury to the person), as well as all goods, freights, cargoes, merchandise, effects, disbursements, profits, moneys, bullion, precious stones, securities, choses in action, evidence of debt, valuable papers, bottomry and respondentia interests, and all other kinds of property and interests therein, in respect to, appertaining to or in connection with any and all risks or perils of navigation, transit, or transportation, including war risks, on or under any seas or other waters, on land or in the air, or while being assembled, packed, crated, baled, compressed or similarly prepared for shipment or while awaiting the same or during any delays, storage, transshipment or reshipment incident thereto, including marine builder's risk and all personal property floater risks, and to person or to property in connection with or appertaining to a marine, inland marine, transit or transportation insurance, including liability for loss of or damage to either, arising out of or in connection with the construction, repair, operation, maintenance or use of the subject matter of the insurance (but not including life insurance or surety bonds) but, except as herein specified, not against loss by reason of bodily injury to the person. c. Upon the lives or health of persons, and every insurance appertaining thereto, and to grant, purchase or dispose of annuities. d. Against bodily injury or death by accident, and upon the health of persons, including a funeral benefit to an amount not exceeding $100 or against loss or damage to automobiles or motor vehicles, or to wagons or vehicles propelled by a horse or team of any description, resulting from collision with moving or stationary objects, against perils to property arising from the use of elevators, aircraft, automobiles or other motor vehicles, or against loss by legal liability for damage to persons or property (including, if the insured is a state or a political subdivision of a state or a municipal corporate instrumentality of one or more states, loss by voluntary payments made by the insured under circumstances where the insured would have legal liability if it were a private corporation) resulting from collision of automobiles, aircraft, or motor vehicles, or of wagons or vehicles propelled by a horse or team with moving or stationary objects. e. Against loss or damage resulting from accident to or injury suffered by any person for which loss or damage the insured is liable, including, if the insured is a state or a political subdivision of a state or a municipal corporate instrumentality of one or more states, loss or damage resulting from accident to or injury suffered by any person for which loss or damage the insured would be liable if it were a private corporation. f. Against damage to property of the insured or loss of life or damage to the person or property of others for which the insured is liable (including, if the insured is a state or a political subdivision of a state or a municipal corporate instrumentality of one or more states, loss of life or damage to the person or property of others for which the insured would be liable if it were a private corporation), caused by the explosion of steam boilers, pipes, engines, motors and machinery connected therewith or operated thereby. g. Against loss from the defaults of persons in positions of trust, public or private, or against loss or damage on account of neglect or breaches of duty or obligations guaranteed by the insurer; and against loss by banks, bankers, brokers, financial or moneyed corporations or associations, of any bills of exchange, notes, checks, drafts, acceptances of drafts, bonds, securities, evidences of debt, deeds, mortgages, documents, gold or silver, bullion, currency, money, platinum and other precious metals, refined or unrefined and articles made therefrom, jewelry, watches, necklaces, bracelets, gems, precious and semiprecious stones, and also against loss resulting from damage, except by fire, to the insured's premises, furnishings, fixtures, equipment, safes and vaults therein caused by burglary, robbery, hold-up, theft or larceny, or attempt thereat. No such indemnity indemnifying against loss of any property as specified herein shall indemnify against the loss of any such property occurring while in the mail or in the custody or possession of a carrier for hire for the purpose of transportation, except for the purpose of transportation by an armored motor vehicle accompanied by one or more armed guards. h. Against loss or damage on account of encumbrances upon or defects in titles to real property. Any company organized or operating under this paragraph shall have the right, in addition to its other powers, to make searches, abstracts, examine titles to real property and chattels, and procure and furnish information in relation thereto. i. Against loss from bad debts, commonly known as credit insurance. j. Against loss or damage by burglary, theft, larceny, robbery, forgery, fraud, vandalism or malicious mischief, or any one or more of such hazards; and against any and all kinds of loss or destruction of or damage to moneys, securities, currencies, scrip, coins, bullion, bonds, notes, drafts, acceptances of drafts, bills of exchange and other valuable papers or documents, except while in the custody or possession of and being transported by a carrier for hire or in the mail; and against loss or damage to automobiles and aircraft by burglary, larceny, or theft, vandalism or malicious mischief, confiscation or wrongful conversion, disposal or concealment, whether held under conditional sale contract or subject to chattel mortgages, or otherwise, or any one or more of such hazards. k. Against loss of and damage to glass, including lettering and ornamentation thereon, and the frame in which the glass is set resulting from breakage of the insured glass. l. Against loss or damage by water or other fluid to any goods or premises arising from the breaking or leakage of sprinklers, pumps, or other apparatus erected for extinguishing fires, or of other conduits or containers, or by water entering through leaks or openings in buildings, and of water pipes and against accidental injury to such sprinklers, pumps, conduits, containers, water pipes and other apparatus; including loss of use or occupancy of the property so damaged. m. Upon the lives of horses, cattle and other livestock or against loss by theft of any such property or both. n. Against loss or damage to property by smoke or smudge, or both. o. Any specified kinds of insurance not included in any of the foregoing subsections and which are proper subjects of insurance. Any company, which, by its charter, is authorized to make insurance against loss or damage to property caused by fire, lightning, or tempest on land, may, without amending its charter, be authorized by the Commissioner of Insurance to transact all of the kinds of insurance described in subsections a., b. and l. of this section, if it is possessed of the capital stock and surplus or cash premiums required by R.S.17:17-6 and R.S.17:17-7; and any company which, by its charter, is authorized to make insurance against loss or damage to private dwelling property and contents thereof under subsection a. of this section, may, without amending its charter, be permitted to transact all of the kinds of insurance described in subsections f., k. and l. of this section, limited, however, to extending fire or casualty insurance policies to provide such coverages on private dwellings and contents thereof, if it possesses the capital and surplus or cash premiums required by R.S.17:17-6 and R.S.17:17-7; or any company which, by its charter, is authorized to make any kinds of insurance described in subsections a. through o. of this section, inclusive, except subsection c. of this section, may, without amending its charter, if it is possessed of a capital stock of at least $3,500,000 and surplus of at least $2,750,000 or, if a mutual company, it is possessed of net cash assets (excess of allowable assets over all liabilities) of at least $6,250,000, be authorized by the Commissioner of Insurance to transact any other kind or kinds of insurance that may be proper subjects of insurance, except upon the lives of persons or the granting of annuities. Amended 1938,c.289,s.1; 1947,c.312; 1948,c.243; 1953,c.108; 1954,c.53; repealed in part (see N.J.S.17B:36-3a); 1993,c.234,s.1.

N.J. Stat. § 17:17-2 Stock or mutual plan

Companies may be formed upon the stock or mutual plan to transact any kind of insurance authorized by section 17:17-1 of this Title, subject to the limitations specified in section 17:17-3 of this Title. Amended by L.1945, c. 224, p. 729, s. 1.

N.J. Stat. § 17:17-3 Purposes permitted

A company may be formed: a. For the purposes specified in any or all of the paragraphs of section 17:17-1 of this Title except paragraph "c" ; or b. For the purposes specified in paragraph "c" and for the purpose of making insurances against bodily injury or death by accident as specified in paragraph "d" of said section 17:17-1. In addition, a company authorized to do the business specified in paragraph "c" and insure against bodily injury or death by accident as specified in paragraph "d" may reinsure the legal liability of an airline arising out of the death or injury of any person resulting from an airline accident and may undertake to pay the ceding insurer stipulated amounts in the event of the death or injury of any person whether or not such undertaking is directly related to the liability of the ceding insurer or is subject to aggregate or other limitations. Any reinsurance authorized by this section or any reinsurance of blanket accident insurance referred to in section 4 of P.L.1939, chapter 305 (C. 17:38-17) may be provided through pooling arrangements with other insurers for purposes of spreading the reinsurance risk, provided such arrangements have been approved in writing by the commissioner of insurance upon findings that the arrangements do not impair the protection of policyholders of the ceding and assuming reinsurers and do not substantially restrain competition in the business of insurance or reinsurance or create a monopoly therein. Amended by L.1938, c. 289, p. 621, s. 2; L.1945, c. 224, p. 729, s. 2; L.1970, c. 47, s. 3, eff. May 8, 1970.

N.J. Stat. § 17:17-4 Certificate of incorporation

The persons so proposing to incorporate shall sign a certificate stating their intention to form a corporation under chapters 17 to 33 of this Title (17:17-1 et seq.), and setting forth: a. The name of the company, which shall contain the words "insurance company," except that a company which may be formed for any or all of the purposes specified in paragraphs "d" to "o" of section 17:17-1 of this Title may adopt a name containing the words "insurance company," "indemnity company," "casualty company," "surety company" or "guaranty company." The name shall not so closely resemble that of any existing corporation as to be likely to mislead the public, and shall be approved by the commissioner; b. The place where its principal office in this State is to be located; c. The kind or kinds of insurance proposed to be transacted by the company, stating the paragraphs of section 17:17-1 of this Title authorizing the same; d. Whether the company is to be a stock company or a mutual company; e. If a stock company, the amount of its capital stock, which shall not be less than $200,000.00, the number of shares into which it is divided, and the par value of each share, which shall not be less than $1.00, except that if such company proposes to transact the kinds of insurance set forth in paragraphs "c" and "d" of section 17:17-1 of this Title, the amount of its capital stock shall not be less than the minimum capital stock requirement set forth in section 17:17-6 of this Title; and f. The period, if any, limited for the duration of the company. The certificate may contain such other particulars as may be necessary to explain and make manifest or limit the objects and purposes of the corporation, and such other provisions not inconsistent with chapters 17 to 33 of this Title (17:17-1 et seq.), or the Constitution or laws of this State, which the corporators may choose to insert for the conduct of the affairs of the company, the regulation of its business, or for defining, regulating and limiting the powers of the directors or stockholders. L.1938, c. 289, p. 621, s. 3. Amended by L.1945, c. 224, p. 730, s. 3; L.1947, c. 80, p. 458, s. 1; L.1968, c. 336, s. 1, eff. Nov. 13, 1968; L.1971, c. 7, s. 1, eff. Jan. 15, 1971.

N.J. Stat. § 17:17-5 Approval by attorney general; recording and filing certificate

The certificate of incorporation shall be proved or acknowledged as required for deeds of real estate and be submitted to, and examined by, the attorney general, and if found by him to be in accordance with this subtitle and not inconsistent with the constitution and laws of this state, he shall indorse thereon or annex thereto his certificate to that effect. The certificate of incorporation shall then be recorded in a book kept for that purpose in the office of the clerk of the county wherein the principal office and place of business of the corporation is to be located, and after being so recorded, filed in the department. Thereupon, such persons, their successors and assigns, shall, from the date of the filing, be a corporation by the name set forth in the certificate. The certificate, or copies thereof, duly certified by the commissioner, shall be evidence in all courts and places.

N.J. Stat. § 17:17-6 Capital and surplus required for stock company; temporary waiver

17:17-6. No stock insurance company organized under chapters 17 to 33 of Title 17 of the Revised Statutes (17:17-1 et seq.), shall commence or continue business unless it has a capital stock of at least the greater of $500,000, actually paid in cash, or capital stock of $200,000, actually paid in cash, for each kind of insurance more than one which it may transact as specified in subsections a., b., f., i., j., k., l., m., n. and o. of R.S.17:17-1; $1,000,000 for the kinds of insurance specified in subsection e. of R.S.17:17-1; and $500,000 for the kinds specified in subsection g. of R.S.17:17-1; and, in addition, a surplus, actually paid in cash, of at least the greater of $250,000 or $100,000 for each kind of insurance more than one which it may transact as specified in subsections a., b., f., i., j., k., l., m., n. and o. of R.S.17:17-1; $1,000,000 for the kinds of insurance specified in subsection e. of R.S.17:17-1; and $750,000 for the kinds specified in subsection g. of R.S.17:17-1. A stock insurance company authorized to transact the kinds of business specified in R.S.17:17-1 or eligible to insure surplus lines risks pursuant to section 11 of P.L.1960, c.32 (C.17:22-6.45) as of the effective date of this 1993 amendatory and supplementary act may apply to the commissioner for a temporary waiver of the applicable capital and surplus requirements set forth in this section. The commissioner may, in his discretion, temporarily waive the applicable capital and surplus requirements for that insurance company for a period of no more than five years, except that the insurance company shall remain subject to capital and surplus requirements of no less amounts than those in effect immediately prior to the effective date of this 1993 amendatory and supplementary act. In considering such a temporary waiver, the commissioner shall consider the size of the insurance company's deficiency in meeting the applicable capital and surplus requirements; the adequacy of the insurance company's financial plan to meet the applicable capital and surplus requirements; and any other factors deemed appropriate by the commissioner. Amended 1938,c.289,s.4; 1947,c.80,s.2; 1968,c.336,s.2; repealed in part (see N.J.S.17B:36-3a); 1993,c.234,s.2.

N.J. Stat. § 17:17-7 Assets required for mutual company; temporary waiver

17:17-7. No mutual insurance company organized under chapters 17 to 33 of Title 17 of the Revised Statutes ( s.17:17-1 et seq.), shall commence business until bona fide applications have been made for insurance with the company of the kind or kinds it may transact, as specified in R.S.17:17-3, and premiums thereon have been paid into the company in cash in such sum, which, together with any other funds that may be legally available, will result in the company having unencumbered assets over and above all required reserves and other liabilities of at least 50 percent of the capital and surplus required of a stock company transacting the same kind or kinds of insurance. A company shall not commence or continue the business of liability insurance, as comprised in subsection e. of R.S.17:17-1 unless it has net cash assets of at least $2,000,000 and shall not commence or continue the writing of fidelity and surety bonds as comprised in subsection g. of R.S.17:17-1 unless it has net cash assets of at least $1,250,000. A mutual insurance company authorized to do the kind of business specified in R.S.17:17-1 or eligible to insure surplus lines risks pursuant to section 11 of P.L.1960, c.32 (C.17:22-6.45) as of the effective date of this 1993 amendatory and supplementary act may apply to the commissioner for a temporary waiver of the applicable capital and surplus requirements set forth in this section. The commissioner may, in his discretion, temporarily waive the applicable capital and surplus requirements for that insurance company for a period of no more than five years, except that the insurance company shall remain subject to capital and surplus requirements of no less amounts than those in effect immediately prior to the effective date of this 1993 amendatory and supplementary act. In considering such a temporary waiver, the commissioner shall consider the size of the insurance company's deficiency in meeting the applicable capital and surplus requirements; the adequacy of the insurance company's financial plan to meet the applicable capital and surplus requirements; and any other factors deemed appropriate by the commissioner. Amended 1945,c.224,s.4; 1951,c.206,s.2; 1968,c.336,s.3; repealed in part (see N.J.S.17B:36-3a); 1993,c.234,s.3.

N.J. Stat. § 17:17-8 Examination before commencing business

Before granting authority to a company to issue policies or make contracts of insurance, the commissioner shall be satisfied, by such examination and evidence as he sees fit to make and require, that the whole amount of the capital stock set forth in the certificate of incorporation and the required minimum surplus of the company, if a stock company, has been actually paid in cash, and is possessed by the company in money, or in the stocks, bonds, or bonds and mortgages authorized for insurance companies by chapter two (s. 17:2-1 et seq.), and chapter twenty-four (s. 17:24-1 et seq.), of this Title; or, if a mutual company, that it has received and is in possession of the cash premiums, and bona fide engagements for insurance to the extent and of the value hereinbefore required. This section shall not apply to insurance companies incorporated by certificates filed in the department prior to March twenty-seventh, one thousand nine hundred and twenty-eight. In determining the financial condition of any corporation organized under paragraph "h" of section 17:17-1 of this Title, the commissioner shall allow as admitted assets such assets as are authorized in chapters two (s. 17:2-1 et seq.) and twenty-four (s. 17:24-1 et seq.) of this Title, and may allow as an asset on account of the required surplus, the title plant of such company at its fair value as determined by the commissioner, less such charge-offs as he may require. Amended by L.1938, c. 289, p. 623, s. 5.

N.J. Stat. § 17:17-9 Deposit prerequisite to authorization

No company organized under chapters 17 to 33 of this title (s. 17:17-1 et seq.), other than a mutual company organized to make insurance solely against loss or damage to property belonging to the insured member, shall be authorized to transact any business of insurance until it has been made the deposit required by, and has otherwise complied with, section 17:20-1 of this title.

N.J. Stat. § 17:17-10 Certificates authorizing company to commence business; issuance, surrender; replacement carrier.

17:17-10. a. When satisfied that a company has complied with all the requirements of this subtitle to entitle it to engage in business and that the proposed methods of operation of the company are not such as would render its operation hazardous to the public or its policyholders, the commissioner shall issue to the company a certificate authorizing it to commence business, specifying in the certificate the particular kind or kinds of insurance it is authorized to transact. The commissioner may refuse to issue a certificate of authority if he finds that any of the company's directors or officers has been convicted of a crime involving fraud, dishonesty, or like moral turpitude or that said persons are not persons of good character and integrity. Any applicant for a license pursuant to this section and any officer, director, partner or owner of a controlling interest of a corporation or partnership for licensure shall submit to the commissioner the applicant's name, address, fingerprints and written consent for a criminal history record background check to be performed. The commissioner is authorized to exchange fingerprint data with and receive criminal history record information from the State Bureau of Identification in the Division of State Police and the Federal Bureau of Investigation consistent with applicable State and federal laws, rules and regulations, for the purposes of facilitating determinations concerning licensure eligibility. The applicant shall bear the cost for the criminal history record background check, including all costs of administering and processing the check. The Division of State Police shall promptly notify the commissioner in the event a current holder of a license or prospective applicant, who was the subject of a criminal history record background check pursuant to this section, is arrested for a crime or offense in this State after the date the background check was performed. No company shall transact the business for which it is incorporated until it has received the certificate from the commissioner. If any company fails to obtain the certificate of authority within one year from the date of the certificate of the Attorney General to its certificate of incorporation, as provided in R.S.17:17-5, the company shall, ipso facto, be dissolved and its certificate of incorporation be null and void. b. No company licensed to transact insurance business in this State pursuant to chapter 17 of Title 17 of the Revised Statutes may surrender its certificate of authority or discontinue writing or renewing any kind or kinds of insurance specified in the certificate, except in accordance with an informational filing submitted to the commissioner, which filing shall be subject to the following provisions regarding any withdrawals: (1) the company shall send a notice to policyholders of the proposed withdrawal no later than thirty days following the submission of the informational filing to the commissioner, which shall state that the insurer intends to withdraw and has filed its intention to withdraw with the commissioner, the terms of the withdrawal, including the date of the proposed commencement of nonrenewal of policies, and the proposed duration of the nonrenewal of the company's book of business; (2) nonrenewals shall not commence prior to one calendar year and ninety days following the submission of the informational filing; (3) the company shall send a notice of nonrenewal to every policyholder (a) no later than one calendar year preceding the date of nonrenewal and (b) a subsequent notice of nonrenewal in accordance with any time limit otherwise established by law for that line of insurance; (4) nonrenewals shall take place in a manner so as to be applicable to all insureds on an equitable basis with respect to risk classification and territorial or other form of rating factor, and shall be effectuated at a uniform rate over a period not exceeding three calendar years, commencing with the date established in paragraph (2) of this subsection; provided, however, that if more than one company files for withdrawal for the same line of business and the companies, in the aggregate, write more than 25% of the market share for that line of business, the commissioner may extend the period of withdrawal provided for herein to five years. The commissioner's authority with respect to withdrawals as provided for herein shall be limited to enforcing compliance with this subsection and enforcing the terms of the withdrawal plan proposed in the informational filing. c. Upon receiving the informational filing provided for in subsection b. of this section, the commissioner shall consider, and may require as a condition of approval, whether some or all of the company's other certificates of authority issued pursuant to Title 17 of the Revised Statutes held by the company or other companies within the same holding company system as the company submitting the plan shall be required to be surrendered. d. Notwithstanding the provisions of subsection b. of this section, if the company finds a replacement carrier for the business that will not be renewed as the result of the withdrawal either prior to or after the date of the informational filing, the insurer may apply to the commissioner for approval to transfer the business to a replacement carrier or carriers. If the commissioner approves the replacement carrier or carriers, notwithstanding the provisions of paragraphs (1), (2), and (3) of subsection b. of this section, the notice of nonrenewal shall be in compliance with the time limits provided by law for that line of insurance, and the company shall offer every insured coverage with the replacement carrier prior to the effective date of the nonrenewal. The commissioner shall not withhold approval of a replacement carrier or carriers if that insurer is authorized to do business in the same line of business in New Jersey and has the financial and business capability to write and service the business being transferred to it by the withdrawing company. The commissioner shall approve or disapprove the replacement carrier or carriers within 60 days of (1) the date of the filing by both the withdrawing insurer requesting approval of a replacement carrier or carrier or (2) the filing by the replacement carrier or carriers requesting to be a replacement carrier, whichever is later. e. Notwithstanding the provisions of subsection b. of this section, the commissioner may waive the requirements of paragraph (2) of that subsection, and the one-year nonrenewal notice of paragraph (3) of that subsection, as well as the three-year minimum nonrenewal period provided in paragraph (4) of that subsection if the commissioner deems a waiver to be necessary to protect the solvency of the insurer making the informational filing or if the commissioner deems the withdrawal to have a limited impact on the market. Amended 1950, c.47; 1958, c.67; repealed in part (see N.J.S. 17B:36-3a); amended 1990, c.8, s.71; 2003, c.89, s.83; 2003, c.199, s.11.

N.J. Stat. § 17:17-11 Transacting business before authority given; liability of directors and corporators

The directors and corporators of any company organized under chapters 17 to 33 of this title (s. 17:17-1 et seq.), shall be jointly and severally liable for all obligations incurred by the company by reason of its having transacted any business before it has received legal authority so to do.

N.J. Stat. § 17:17-12 Misdemeanor to do business unless authorized

No person by himself, or by his brokers, agents, solicitors, surveyors, canvassers or other representatives of whatever designation, nor any such broker, agent, solicitor, surveyor, canvasser, or other representative, shall solicit, negotiate or effect any contract of insurance of any kind, including all kinds of insurance described in chapters seventeen to thirty-three of this Title (17:17-1 et seq.), and including annuities involving life contingencies, or sign, deliver or transmit, by mail or otherwise, any policy, annuity contract involving life contingencies, certificate of membership, or certificate of renewal thereof, on any property or thing, or on the life, health or safety of any person, or receive any premium, commission, fee or other payment thereon, or maintain or operate any office in this State for the transaction of the business of insurance, or in any manner, directly or indirectly, transact the business of insurance of any kind whatsoever, within this State, unless specifically authorized under the laws of this State. Any person violating any of the provisions of this section shall be guilty of a misdemeanor. This section shall not prohibit the granting of annuities by corporations or associations organized without capital stock or not for profit whose funds are derived principally from gifts or bequests and which are used for eleemosynary or charitable purposes, nor shall it prohibit any person or corporation acting as a broker, without being licensed as such, from soliciting or negotiating for others than themselves contracts of insurance against loss or damage on account of encumbrances upon, or defects in, title to real estate with insurance companies duly qualified under the laws of this State to make such insurance. Amended by L.1942, c. 162, p. 471, s.s. 1, 2.

N.J. Stat. § 17:17-13 Application of subtitle limited

The provisions of this subtitle, other than those specifically made applicable thereto, shall not apply to corporations authorized to transact business in this state under the provisions of chapter 35 (17:35-1 et seq.), or chapters 39 to 44 (s. 17:39-1 et seq.) of this title.

N.J. Stat. § 17:17-14 Assessments required when liabilities of mutual company, other than fire or life, exceed assets

When the liabilities of any mutual insurance company, other than fire or life, organized under the laws of this State and now doing business, shall exceed its assets, or hereafter organized shall exceed the net assets as provided in section 17:17-7 of this Title for the commencement of business, its board of directors shall raise money by assessment to restore such excess, and on neglect or refusal so to do after sixty days' notice from the treasurer or the Commissioner of Banking and Insurance of such excess of liabilities over assets, the directors so neglecting or failing shall be personally liable to pay the liabilities to the persons to whom the same are due and the Commissioner of Banking and Insurance shall take possession of the property and business of the company, as provided in section 17:30-1 of this Title. This section shall not apply to stockholders of mutual companies having a capital stock. L.1951, c. 206, p. 746, s. 1.

N.J. Stat. § 17:17-15 Rules, regulations on solvency standards

5. The commissioner may promulgate rules and regulations with respect to solvency standards and tests, including, but not limited to: the ratio of policyholder surplus to net premiums; the ratio of policyholder surplus to net claim reserves; the concentration of the insurer's exposures, geographic or otherwise; and transactions which could affect the companies' solvency. L.1993,c.234,s.5.

N.J. Stat. § 17:17-16 Increase in amount of required capital, surplus

6. The commissioner may increase the amount of capital or surplus required of any insurer pursuant to R.S.17:17-6 or R.S.17:17-7, or subsequently revise or redetermine such increase, using appropriate methods and procedures established by rules and regulations adopted by the commissioner in order to provide adequate protection against risks affecting the insurer's financial condition that are not adequately or fully covered by its reserves or other assets, but under no circumstance shall an insurer's capital or surplus be less than the capital or surplus required pursuant to R.S.17:17-6 or, if applicable, R.S.17:17-7; provided, however, that any increase of capital or surplus pursuant to this section, including any increase required by a subsequent revision or redetermination, shall be made only after a formal departmental hearing, on a record, unless that hearing is waived by the affected insurer. All matters pertaining to a hearing or to an increase of capital or surplus pursuant to this section shall be confidential and not subject to subpoena or public inspection, except to the extent that the commissioner finds release of information necessary to protect the public. The hearing shall be initiated within 20 days after written notice to the insurer. Any decision regarding an increase of capital or surplus pursuant to this section, including an increase required by a subsequent revision or redetermination, shall contain findings specifying the factors deemed significant in regard to the particular insurer, and shall set forth the reasons supporting the increase of capital or surplus ordered by the commissioner. In determining any increase, revision or redetermination in the amount of capital or surplus, the commissioner shall consider the risks of: a. Increases or decreases in the frequency and severity of losses under normal operating conditions, as well as increases or decreases in those values, beyond or below the levels contemplated by the rates that it charged for insurance and beyond or below those reasonably expected under normal conditions; b. Increases or decreases in expenses under normal operating conditions, as well as increases or decreases in those values, beyond or below the levels contemplated by the rates that it charged for insurance and beyond or below those reasonably expected under normal conditions; c. Increases or decreases in the value of, or return on, invested assets under normal operating conditions, as well as increases or decreases in those values, beyond or below those levels anticipated under normal conditions; d. Changes in economic, social and market conditions that could adversely or favorably affect the financial condition of the insurer, including conditions that would make liquidity more or less important than contemplated and would prevent or facilitate timely investments or force or prohibit untimely sale of assets; and e. Any other contingencies, including reinsurance and unfunded or extracontractual obligations, which may affect the insurer's financial condition. L.1993,c.234,s.6.

N.J. Stat. § 17:17-17 Factors for determining increase, revision, redetermination of capital, surplus

7. In determining any increase, revision or redetermination in the capital or surplus of an insurer pursuant to the provisions of section 6 of P.L.1993, c.234 (C.17:17-16), the commissioner shall take into account the following factors: a. Methods and techniques used to measure risk exposure and variability; b. The information available relating to the magnitude of the various risks described in section 6 of P.L.1993, c.234 (C.17:17-16); c. The extent to which the risks described in section 6 of P.L.1993, c.234 (C.17:17-16) are independent or interrelated, and whether any dependency is direct or inverse; d. The insurer's financial history, projections of profits or losses and other operational characteristics; e. The extent to which the insurer has provided protection against contingencies in ways other than the establishment of surplus including, but not limited to: redundancy of premiums; margin in reserves and liabilities; adjustability of contracts pursuant to the terms of the contracts; voluntary or mandatory investment valuation reserves; reinsurance; the use of conservative actuarial assumptions to provide a margin of security; reserve adjustments after rate increases for policies written at earlier and less adequate rates; contingency or catastrophe reserves, and diversification of assets and underwriting risks; and f. Any other relevant factors, including National Association of Insurance Commissioners' reports and independent judgments of the soundness of the insurer's financial condition as evidenced by ratings and reports of reliable professional financial services. L.1993,c.234,s.7.

N.J. Stat. § 17:17-18 Maintenance of reserves

8. Every insurance company transacting the business of insurance in this State shall, at all times, maintain reserves in an amount estimated in the aggregate to provide for the payment of all losses and claims incurred, whether reported or unreported, which are unpaid and for which such company may be liable, and to provide for the expenses of adjustments or settlement of such losses or claims. L.1993,c.234,s.8.

N.J. Stat. § 17:17-19 Suspension, revocation of authority to do business

9. The commissioner may suspend or revoke the authority to do business in this State of any insurer that does not comply with the provisions of R.S.17:17-1, R.S.17:17-6, R.S.17:17-7, R.S.17:17-9 and sections 5 through 8 of P.L.1993, c.234 (C.17:17-15 through C.17:17-18). L.1993,c.234,s.9.

N.J. Stat. § 17:17-20 Change of domicile for insurers

1. a. An insurer that is formed under the laws of another state and is admitted to transact the business of insurance in this State may become a domestic insurer upon the commissioner's determination that the company has complied with all applicable requirements of Title 17 of the Revised Statutes relating to the formation of a domestic insurer of the same type. If the commissioner approves the domestication of a foreign insurer pursuant to this section, the insurer shall be entitled to a certificate of authority equivalent to that which was previously held as a foreign insurer and the insurer shall be subject to the authority and jurisdiction of this State. The newly domesticated insurer shall amend its articles of incorporation to provide that the corporation is a continuation of the corporate existence of the original foreign corporation through the adoption of this State as its corporate domicile, and that the original date of incorporation in its original domiciliary state is the date of incorporation of such domestic insurer. For purposes of the premium tax laws, pursuant to P.L.1945, c.132 (C.54:18A-1 et seq.), however, the date of licensure shall be the date on which the commissioner approves the domestication in this State. b. Any domestic insurer may, upon the written approval of the commissioner, transfer its domicile to any other state in which it is admitted to transact the business of insurance. The company shall cease to be a domestic insurer as of the effective date of the transfer approved by the commissioner. Such a company shall be admitted to transact the business of insurance in this State if the company is otherwise qualified as a foreign insurer pursuant to the applicable requirements of Title 17 of the Revised Statutes. c. Every insurer authorized to transact business in the State shall notify the commissioner of the details of any proposed transfer of domicile at least 60 days prior to the effective date of the proposed transfer, however, the commissioner may approve a shorter period for providing such notice. Such an insurer shall file promptly any resulting amendments to corporate documents filed or required to be filed with the commissioner. d. Prior to granting approval for any foreign insurer to become a domestic insurer, or for a domestic insurer to transfer its domicile to another state, the commissioner may conduct whatever investigations, examinations or hearings he deems necessary, and may subject the issuance of his approval to the conditions and restrictions that he determines are reasonable and necessary for the protection of the company's policyholders or the public. e. The transfer of domicile of an insurer pursuant to the provisions of this section shall not be construed to alter either the existing rights, franchises and interests, or the duties, obligations and liabilities of the insurer transferring domicile, except as otherwise provided by law. Insurers who transfer domicile shall continue to be subject to all the liabilities, claims and demands against the company which were in existence prior to the transfer of domicile. Any action or proceeding pending at the time of the consummation of the process by which the domicile is transferred in which the company is a party shall not abate or discontinue by reason of the transfer of domicile, but shall be prosecuted to a final resolution in the same manner as if the transfer of domicile had not taken place. f. The certificate of authority, insurance producer appointments and licenses, rating systems and other documents required to be maintained for regulatory purposes, which are in existence and approved for use in this State at the time any insurer licensed to transact the business of insurance in this State transfers its corporate domicile to this or any other state by merger, consolidation, transfer, or any other lawful method, shall continue in full force and effect upon such transfer if the commissioner is satisfied that the insurer remains duly qualified to transact the business of insurance in this State. All outstanding policies of any transferring insurer shall remain in full force and effect and need not be endorsed as to the new name of the company or its new location unless so ordered by the commissioner. To the extent required by law, every transferring insurer shall file new policy forms with the commissioner on or before the effective date of the transfer, but may use existing policy forms with appropriate endorsements if allowed by, and under such conditions as approved by, the commissioner. g. When two foreign insurers of the same insurance holding company system domiciled in different states are approved for domestication pursuant to subsection a. of this section during the calendar year following enactment of P.L.1994, c.189 (C.17:17-20 et al.), these insurers shall thereafter file financial statements in this State pursuant to R.S. 17:23-1 that are consistent with the financial statements filed by each other with respect to the same or similar financial transactions notwithstanding any inconsistent financial statements filed previously as required by insurance regulators of the prior respective domiciles. Any dividends previously paid by these insurers pursuant to the laws of the former domiciliary states in excess of the earned surplus of these insurers shall, to the extent of such excess, be reported on the financial statements filed by each insurer after domestication in this State as a return of capital distributed from gross paid in and contributed surplus rather than as negative earnings. L.1994,c.189,s.1; amended 1996, c.155.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.njleg.state.nj.us/legislative-activity/statutesFetched: 10/17/2026

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