17:33B-3. Appointment of trustee; plan of operation; powers of trustee; annual report
a. The Legislature finds that the New Jersey Automobile Full Insurance Underwriting Association, created pursuant to section 16 of P.L.1983, C. 65 (C. 17:30E-4), is currently operating in a substantially impaired financial state with an operating deficit which the association has estimated to be in excess of $3 billion and that, based upon the results of a recent claim and underwriting review and financial audit, the Commissioner of Insurance stated that mismanagement by the insurance companies acting as servicing carriers cost the association $908 million between its inception in 1984 and 1988. The Legislature further finds that the association is not earning new premium income or collecting subsidies in an amount sufficient to pay its claims and expenseS.The Legislature further finds that under the above enumerated circumstances the association, if it were a licensed insurer, would likely be declared financially impaired or insolvent pursuant to the provisions of P.L.1975, C. 113 (C. 17:30C-1).
(1) Within 90 days of the effective date of this 1990 amendatory and supplementary act, the commissioner shall appoint a trustee, who shall be a person experienced in insolvency or bankruptcy, who shall not, during his tenure as trustee be affiliated with or employed by an insurer. The trustee shall serve at the pleasure of the commissioner and shall be paid from funds available to the New Jersey Automobile Insurance Guaranty Fund created pursuant to section 23 of this act, in an amount and manner as determined by the commissioner. The trustee shall carry out his obligations as provided in this act and the plan of operation promulgated pursuant to paragraph (2) of this subsection.
(2) The trustee shall, as soon as possible upon appointment, promulgate a plan of operation to be approved by the commissioner. Pursuant to the plan of operation, the trustee shall have the authority to disburse funds made available from the New Jersey Automobile Insurance Guaranty Fund pursuant to section 23 of this act and such other monies as may be appropriated to or otherwise made available to the fund or the association, including those monies collected by the association pursuant to section 20 of P.L.1983, C. 65 (C. 17:30E-8), on behalf of the association for the payment of claims and other financial obligations of the association, including the contracts with the servicing carrierS.The plan shall provide for the payment of covered losses on behalf of the association. Among other things necessary to the orderly evaluation, prioritization and disbursement of monies payable on behalf of the association, the plan shall contain a schedule for the prioritization of claims payments by the type of claim for which payment is due. The schedule may provide for the deferral of the payment of residual bodily injury losses over a period not to exceed four yearS.The schedule may also provide for the deferral of other payments only upon certification by the commissioner that the fund cannot by any other available means secure the monies necessary to pay those losseS.However, the plan shall not provide for the deferral of payment of damages which are due and payable for present economic loss under any circumstance.
(3) The trustee shall report to the commissioner biannually, or more frequently if ordered by the commissioner, on the financial condition of the association and the disbursement of funds pursuant to the plan of operation. The commissioner shall make an annual report on the activities of the trustee to the Legislature and the Governor. The report shall contain an accounting of the immediately preceding annual period, including a report of the financial obligations attributable to the association; the income available to and the disbursements made by the trustee during that period; and a projection of the financial obligations, anticipated income and expected disbursements for the immediately succeeding annual period.
(4) In fulfilling his duties pursuant to this subsection, the trustee shall avail himself of the services of association staff and shall utilize association procedures, equipment and supplies to the extent such use facilitates fulfillment of the trustee’s dutieS.The trustee shall have the authority to continue any audit being conducted with regard to the operations of the association and to conduct such auditS.
Original Text maintained by the State of New Jersey:
Disclaimer: Always check for the most up to date language of a statute. Every time a new law is enacted it has a possibility of changing the wording of a statute or override case law. These pages were created to assist in looking up and migrating between statutes easily. No accuracy is guaranteed. If you need help with researching law, contact an attorney.