N.J.S. § 17B:32A-7 Powers of the Association

• Library: New Jersey Permanent Statutes
• Edition: 2023
• Currency: Current through L. 2023, c. 194.
• Year: 2023
• Citation: N.J.S. § 17B:32A-7

a. If a member insurer is an impaired insurer, the association may, in its discretion, and subject to any conditions imposed by the association that do not unreasonably impair the contractual obligations of the impaired insurer, that are approved by the commissioner:

(1) guaranty, assume, reissue, or reinsure, or cause to be guaranteed, assumed, reissued, or reinsured, any or all of the policies or contracts of the impaired insurer;

(2) provide such monies, pledges, notes, guarantees, or other means as are proper to effectuate the provisions of paragraph (1) of this subsection and assure payment of the contractual obligations of the impaired insurer pending action under paragraph (1); or

(3) loan money to the impaired insurer.

b. (Deleted by amendment, P.L. 2022, c. 98);

c. If a member insurer is an insolvent insurer, the association shall, in its discretion, either:

(1)

(a) guaranty, assume, reissue, or reinsure, or cause to be guaranteed, assumed, reissued, or reinsured, the policies or contracts of the insolvent insurer; or

(b) assure payment of the contractual obligations of the insolvent insurer; and

(c) provide those monies, pledges, guarantees, or other means as are reasonably necessary to discharge those obligations; or

(2) with respect only to policies or contracts, provide benefits and coverages in accordance with subsection d. of this section.

d. When proceeding under paragraph (2) of subsection c. of this section, the association shall, with respect only to policies or contracts:

(1) assure payment of benefits that would have been payable under the policies or contracts of the impaired or insolvent insurer, for claims incurred:

(a) with respect to group policies or contracts, not later than the earlier of the next renewal date under those policies or contracts or 45 days, but in no event less than 30 days, after the date on which the association becomes obligated with respect to those policies or contracts;

(b) with respect to individual policies or contracts, not later than the earlier of the next renewal date, if any, under those policies or contracts or one year, but in no event less than 30 days, from the date on which the association becomes obligated with respect to those policies or contracts;

(2) make a diligent effort to provide all known insureds, enrollees, annuitants, or group policy or contract owners with respect to group policies or contracts, 30 days' notice of the termination of the benefits provided; and

(3) with respect to individual policies or contracts, and with respect to individuals formerly an insured, enrollee, or annuitant under group policies or contracts who are not eligible for replacement group coverage, make available to each known insured, enrollee, annuitant, or policy or contract owner of an individual policy or contract if other than the insured, enrollee, or annuitant substitute coverage on an individual basis in accordance with the provisions of paragraph (4) of this subsection, if the insured, enrollee, or annuitant had a right under law or the terminated policy, contract or annuity to convert coverage to individual coverage or to continue an individual policy, contract, or annuity in force until a specified age or for a specified time, during which the member insurer, health service corporation, hospital service corporation, medical service corporation, or health maintenance organization had no right unilaterally to make changes in any provision of the policy, contract, or annuity or had a right only to make changes in premium by class.

(4)

(a) In providing the substitute coverage required by paragraph (3), the association may offer either to reissue the terminated coverage or to issue an alternative policy or contract at actuarially justified rates.

(b) Alternative or reissued policies or contracts shall be offered without requiring evidence of insurability, and shall not provide for any waiting period or exclusion that would not have applied under the terminated policy or contract.

(c) The association may reinsure any alternative or reissued policy or contract.

(5)

(a) Alternative policies or contracts adopted by the association shall be subject to the approval of the commissioner.

(b) Alternative policies or contracts shall contain at least the minimum statutory provisions required in this State and provide benefits that shall not be unreasonable in relation to the premium charged under reasonable actuarial assumptions. The association shall set the premium in accordance with a table of rates which it shall adopt. The premium shall reflect the amount of insurance or coverage to be provided and the age and class of risk of each insured or enrollee.

(c) Any alternative policy or contract issued by the association shall provide coverage of a type similar to that of the policy or contract issued by the impaired or insolvent insurer, as determined by the association.

(6) If the association elects to reissue terminated coverage at a premium rate different from that charged under the terminated policy or contract, the premium shall be actuarially justified and set by the association in accordance with the amount of insurance or coverage provided and the age and class of risk, subject to approval of the commissioner.

(7) The association's obligations with respect to coverage under any policy or contract of the impaired or insolvent insurer or under any reissued or alternative policy or contract shall cease on the date that coverage, policy or contract is replaced by another similar coverage, policy or contract by the policy or contract owner, the enrollee, the association, or the insured.