Auto Insurance Choice and Availablity Shortage Remain Despite State Decision On State Farm in New Jersey.Business Editors A state announcement delaying State Farm's application to withdraw from New Jersey's auto insurance market neither ends the threat to auto insurance availability nor remedies consumers' woeful woe·ful also wo·ful adj. 1. Affected by or full of woe; mournful. 2. Causing or involving woe. 3. Deplorably bad or wretched: lack of auto insurance choice, warns the Coalition for Auto Insurance Competition. "The state's announcement on State Farm further underscores the need for a dramatic change in the laws that govern auto insurance in New Jersey is what we've been saying now for some time," said John Friedman, chairman of the Coalition. "Until reforms are made that promote greater consumer choice and industry competition, insurers will continue to lack the incentive to grow and invest capital in New Jersey." The Coalition has been working to educate New Jersey drivers and policymakers to prevent an unprecedented statewide auto insurance crisis precipitated by the deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. of the financial health of New Jersey's auto insurance industry. "This underscores the immediate need to address the state's excessive regulation of the auto insurance industry, which is what was pushing State Farm out of New Jersey and continues to threaten the stability and sustainability of New Jersey's auto insurance market," said Friedman. The Coalition points to the state's excessive regulation of auto insurance as the culprit behind the lack of sufficient auto insurance choice and competition. Excessive regulations discourage insurance companies from doing business in New Jersey, setting the stage for worsening wors·en tr. & intr.v. wors·ened, wors·en·ing, wors·ens To make or become worse. Noun 1. worsening - process of changing to an inferior state decline in quality, deterioration, declension New Jersey's auto insurance availability problems. "Having to operate under the state's restrictive and difficult regulatory regime where insurers are told what products to sell, to whom they must sell to and how much to charge, companies will lack an incentive to remain and invest in New Jersey, " continued Friedman. "We need a regulatory system that promotes competition, encourages companies to sell auto insurance in New Jersey, and creates a stable market that offers more choices for consumers." The group is calling for reforms that will attract more auto insurers to New Jersey, spurring competition and increasing consumer choice. These reforms include permitting companies to use industry-accepted standard underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. methods already used in nearly every state and adjusting the low ceiling on company profits to permit a reasonable rate of return. The latest figures show New Jersey has 47 percent fewer companies selling auto insurance than Illinois Illinois, river, United States Illinois, river, 273 mi (439 km) long, formed by the confluence of the Des Plaines and Kankakee rivers, NE Ill., and flowing SW to the Mississippi at Grafton, Ill. It is an important commercial and recreational waterway. and more than a third fewer than neighboring neigh·bor n. 1. One who lives near or next to another. 2. A person, place, or thing adjacent to or located near another. 3. A fellow human. 4. Used as a form of familiar address. v. New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of and Pennsylvania. More than twenty auto insurance companies have left New Jersey in the past ten years. "With comparatively few auto insurers remaining in New Jersey, the loss of any others will add pressure on an industry near the breaking point," said Friedman. "Many companies are already straining their capacity of policyholders," said Friedman. Capacity describes the volume of business an insurer An individual or company who, through a contractual agreement, undertakes to compensate specified losses, liability, or damages incurred by another individual. An insurer is frequently an insurance company and is also known as an underwriter. can accept based on the size of its capital base surplus. Insurers must hold surpluses equal to at least one-third the premiums it collects from policyholders. If surpluses fall below the one-third standard, [pilcrow (paragraph sign)]it signals that the company may be financially unstable unstable, adj 1. not firm or fixed in one place; likely to move. 2. capable of undergoing spontaneous change. A nuclide in an unstable state is called radioactive. An atom in an unstable state is called excited. . Companies with high financial ratings maintain their surplus at much higher levels. "It's only natural to expect that consumers will shop around for the best deal if they have more choices. Competition and choice benefit consumers and when companies compete, consumers win, " said Friedman. The Coalition welcomes the participation of businesses, associations and consumers who seek to work together to bring about meaningful and responsible auto insurance reform. Members include the National Association of Independent Insurers, Insurance Council of New Jersey, American Insurance Association, New Jersey Chamber of Commerce, Independent Insurance Agents of New Jersey, Citizens for a Sound Economy Citizens for a Sound Economy (CSE) is a conservative political group operating in the United States, whose self-described mission is "to fight for less government, lower taxes, and less regulation. , National Association of Mutual Insurance Companies, New Jersey Association of REALTORS(R), Professional Insurance Agents of New Jersey, New Jersey Food Council, New Jersey Retail Merchants Association, NJ SEED (Society for Environmental, Economic Development), Somerset County Somerset County is the name of four counties in the United States and one in England. See:
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