PIANJ Backs Bill to Restore Coverage for New Jersey Surplus Lines Guaranty Fund

The Professional Insurance Agents of New Jersey Inc. this week
supported a bill that would restore coverage under the New Jersey Surplus Lines Insurance Guaranty Fund for claims involving liquor law liability.

In testimony before the Assembly Financial Institutions and Insurance Committee, PIANJ Legislative Representative Leon Zimmerman noted that the Fund currently pays the claims of bankrupt surplus lines insurers for only two lines of insurance—medical malpractice liability and property insurance covering owner-occupied dwellings of less than four dwelling units.

“Prior to June 2002, when the law was amended, the Fund covered most types of property/casualty lines written on a surplus lines basis,” Zimmerman said. “PIANJ always has been of the opinion that stripping coverage under the Fund was detrimental to the interests of policyholders of insolvent surplus lines insurers.”

PIANJ supports adding the liquor law liability claims coverage back to the Fund because they reportedly tend to involve substantial damage amounts and it would benefit consumers to have access to these funds in the event that their insurer is unable to play their claims.

PIANJ also urged the committee to consider restoring coverage for other types of property/casualty claims previously covered by the Fund.