N.J.S.A 17:30E-7. Powers and duties

17:30E-7. Powers and duties

Pursuant to the plan of operation, the association shall have the power and duty to:

a. Enter into contracts as are necessary or proper to carry out the provisions and purposes of this act;

b. Sue or be sued in the name of the association, including taking any legal actions necessary or proper for recovery of any assessments for, on behalf of, or against memberS.A judgment against the association shall not create any direct liability against the servicing carrier, board of directors or the individual members, or the individual participating members of the association;

C. Indemnify its directors and employees for any and all claims, suits, costs of investigations, costs of defense, settlements or judgments against them on account of an act or omission in the scope of a director’s duties or employee’s employment. The association shall refuse to indemnify if it determines that the act or failure to act was because of actual fraud, willful misconduct or actual malice;

d. Take such action as is necessary to prevent and avoid the payment of improper claims against the association or the coverage provided by or through the association;

e. Arrange for the issuance of automobile insurance to any qualified applicant through servicing carrierS.Each servicing carrier shall issue policies in the name of the servicing carrier, on behalf of the association, to the extent the plan of operation provideS.Servicing carriers, as agents of the association, shall have no individual liability for claims or policies written by the association. However, notwithstanding the above, or any other provision of law to the contrary, the association shall not arrange for the issuance or renewal of any automobile insurance policy, either through a servicing carrier or on its own behalf, on or after October 1, 1990;

f. Appoint from among its members appropriate legal, actuarial, claims, investment and other committees as necessary to provide technical assistance in the operation of the association, policy and other contract design, and any other function within the authority of the association;

g. Establish standards for, and review operating practices of, servicing carriers and producers to determine whether such practices are adequate to properly service association business, and to take appropriate action to eliminate inadequate operating practices and develop adequate operating practices, and to appoint an audit committee to review operating practiceS.The audit committee shall be composed of servicing carriers, producers, and member companies who are not servicing carriers;

h. Develop criteria and establish a monitoring system to ensure that: (1) servicing carriers do not obtain an unfair advantage, because of their servicing carrier relationship with producers over other member companies which are not servicing carriers; and (2) member companies do not obtain an unfair advantage over producers of record without a contractual relationship with a voluntary market company, as a result of an offer of voluntary market coverage to an insured of the association;

i. Order the reporting of such statistics by the members of the association as it deems necessary;

j. Reimburse servicing carriers from association funds;

k. Adopt bylaws for the regulation of its internal affairs;

l. Employ a general manager, who shall serve at its pleasure and be responsible for the conduct of the administrative affairs of the association. The board may employ other necessary personnel and may delegate to the general manager and other personnel such authority as it deems necessary to assure proper administration and operation of the association consistent with the plan of operation. The board shall arrange and contract if necessary for suitable quarters within the State of New Jersey for operations of the association; for such equipment, goods and services; and incur such expenses as it deems necessary to assure efficient administration of the association consistent with the plan of operation. If required by the plan of operation, the board may establish service centers in underserviced areas, which service centers shall provide for the dissemination of full information on the coverages available under this act and for referrals to appropriate outlets for the acquisition of such coverage;

m. Hear and determine complaints of any member or producer concerning the operation of the association in accordance with procedures prescribed in section 28 of this act;

n. Annually report to the commissioner on the operation of the association;

o. Record and investigate complaints involving the conduct of producers and to take appropriate corrective action or to recommend to the commissioner appropriate disciplinary action, including suspension or revocation of authority to write association business;

p. Review servicing practices of servicing carriers to determine whether such practices are adequate to properly service the risks written by the association; and upon finding that the practices of any servicing carrier are inadequate, establish a program for that member which will assist the servicing carrier in the performance of its duties and charge that servicing carrier a reasonable fee for establishing and operating such a program;

q. Audit the operations of members for the purpose of determining compliance with this act;

r. Develop methods and standards for the establishment of adequate, actuarially sound reserves for unpaid losses and loss adjustment expenses, including provision for incurred but not reported losses; and

S.Take such other action as is necessary to effectuate the purposes of this act.

L.1983,C. 65,S.19; amended 1983,C. 301,S.4; 1990,C. 8,S.16.


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