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Insurance Agents Join Coalition for Auto Insurance

on 5/10/02.

NEWARK, N.J. (BestWire) - The Coalition for Auto Insurance Competition said a group of independent insurance agents have joined the coalition to promote competition and consumer choice in New Jersey. Professional Insurance Agents of New Jersey, an association that represents independent insurance agents throughout the state, has joined the coalition, coalition spokersman Ernie Landante said. "We, like everyone else, would like there to be a viable, competitive automobile industry in New Jersey," said Steven A. Reichman, president of Professional Insurance Agents. "Our main goal is to try to stop the exodus of insurance companies from New Jersey and bring in new carriers to improve competition within the industry." The coalition was formed this year by auto insurance industry trade associations, including the American Insurance Association, the Insurance Council of New Jersey and the National Association of Independent Insurers. It's important that the coalition have professional and independent insurance agents as members because it sends a signal that New Jersey is on the edge of a crisis, Landante said. Members are working toward changing New Jersey's auto insurance industry from an "unstable and anti-competitive market" to a market with competition and consumer choice, the coalition said in statements. The coalition wants the state legislature to allow insurance companies to use industry-accepted standard underwriting methods and lower limits for the amount of profits companies can keep to allow a reasonable rate of return. New Jersey's take-all-comers law requires auto insurers to write coverage for anyone with a New Jersey driver's license, and its excess-profits law requires companies to pay policyholders if they show profits of 6% or more over a three-year period (BestWire, April 18, 2002). Four of the six largest insurers in the United States don't write business in New Jersey, the coalition said in a statement. In 10 years, more than 20 auto insurers have left the state. The coalition's primary funders are direct writers, specifically State Farm Indemnity Co. and Allstate, Reichman said. State Farm, which has about 780,000 policyholders in New Jersey, is planning to withdraw from the state because the company said regulations make it too hard to do business, although New Jersey Insurance Commissioner Holly Bakke said she will try to persuade the company to stay (BestWire, April 18, 2002). Bakke organized a working group in March to examine the state's auto insurance system and recommend improvements. The commissioner said the group includes consumer advocates, medical providers, attorneys and insurance-industry representatives. The 30 participants is divided into three teams to examine what improvement need to be made to the existing auto insurance system; to focus on ways of promoting a competitive market, and to explore ideas for more fundamental changes (BestWire, March 12, 2002). The group's initial report will be completed June 3 (BestWire, April 18, 2002). Other members of the coalition include Citizens for a Sound Economy, National Association of Mutual Insurance Companies, Professional Insurance Agents of New Jersey; New Jersey Food Council; New Jersey Retail Merchants Association; NJ Society for Environmental, Economic Development; Somerset County Chamber of Commerce and the Commerce and Industry Association of New Jersey. (By Marie Suszynski, associate editor, BestWeek: