N.J. Stat. tit. 17, ch. 51A

in effect

N.J. Stat. § 17:51A-1 Definitions

1. For the purposes of this act: "Commissioner" means the Commissioner of Insurance. "Department" means the Department of Insurance. "Insurer" means every person engaged as indemnitor, surety or contractor in the business of entering into contracts of insurance or of annuities, and authorized to do business in this State pursuant to Title 17 of the Revised Statutes or Title 17B of the New Jersey Statutes. Insurer shall also include any other entity subject to rehabilitation, liquidation, reorganization or conservation by the commissioner under the laws of this State. "Exceeded its powers" means any of the following conditions: a. The insurer has refused to permit examination of its books, papers, accounts or affairs by the commissioner, his deputies, employees or duly commissioned examiners; b. A domestic insurer has unlawfully or willfully removed from this State books, papers, accounts or records necessary for an examination of the insurer; c. The insurer has failed to promptly comply with the applicable financial reporting statutes or rules and departmental requests relating thereto; d. The insurer has failed to comply with an order of the commissioner to remedy a prohibited deficiency in its capital, capital stock or surplus; e. The insurer is continuing to transact insurance or write business after its license has been revoked or suspended by the commissioner; f. The insurer, by contract or otherwise, has unlawfully: (1) Totally reinsured its entire outstanding business; or (2) Merged or consolidated substantially its entire property or business with another insurer; g. The insurer engaged in any transaction in which it is not authorized to engage under the laws of this State; or h. The insurer has refused to comply with an order of the commissioner. L.1993,c.245,s.1.

N.J. Stat. § 17:51A-2 Application of act

2. The provisions of this act shall apply to: all domestic insurers; any other insurer doing business in this State whose state of domicile has asked the commissioner to apply the provisions of this act in regard to such insurer; and any other entity subject to rehabilitation, liquidation, reorganization or conservation by the commissioner under the laws of this State. L.1993,c.245,s.2.

N.J. Stat. § 17:51A-3 Administrative supervision of insurer

3. a. An insurer may be subject to administrative supervision by the commissioner if upon examination or at any other time it appears in the commissioner's discretion that: (1) The insurer's condition renders the continuance of its business hazardous to the public or to its insureds; (2) The insurer has or appears to have exceeded its powers; (3) The insurer has failed to comply with the applicable provisions of the insurance statutes of this State, any administrative rules promulgated thereunder or any order of the commissioner; (4) The business of the insurer is being conducted fraudulently; or (5) The insurer has consented to administrative supervision. b. If the commissioner determines that any of the conditions set forth in subsection a. of this section exist, the commissioner shall: (1) Notify the insurer of his determination; (2) Furnish to the insurer a written list of actions to be taken by the insurer to abate the conditions giving rise to the determination; and (3) Notify the insurer that it is under the supervision of the commissioner and that the commissioner is applying and effectuating the provisions of this act. c. If placed under administrative supervision, the insurer shall have 60 days, or another period of time as designated by the commissioner, to comply with the requirements imposed by the commissioner. d. If the conditions giving rise to the supervision still exist at the end of the supervision period specified in subsection c. of this section, the commissioner may, after notice and opportunity to be heard, extend such period. e. If the commissioner determines that the conditions giving rise to the supervision have been sufficiently remedied, the commissioner shall release the insurer from supervision. L.1993,c.245,s.3.

N.J. Stat. § 17:51A-4 Confidentiality of information; exceptions

4. a. Proceedings, hearings, notices, correspondence, reports, records and other information in the possession of the commissioner or the department relating to the supervision of any insurer are confidential except as provided by this section. b. The personnel of the department shall have access to these proceedings, hearings, notices, correspondence, reports, records or information as permitted by the commissioner. c. The commissioner may open the proceedings or hearings or disclose the notices, correspondence, reports, records or information to a department, agency or instrumentality of this or another state of the United States if the commissioner determines that the disclosure is necessary or proper for the enforcement of the laws of this or another state of the United States. d. The commissioner may open the proceedings or hearings or make public the notices, correspondence, reports, records or other information to the public if the commissioner deems that it is in the best interest of the public or in the best interest of the insurer, its insureds or creditors. e. This section does not apply to hearings, notices, correspondence, reports, records or other information obtained upon the appointment of a receiver for the insurer by a court of competent jurisdiction. L.1993,c.245,s.4.

N.J. Stat. § 17:51A-5 Powers of supervision

5. During the period of supervision, the commissioner or his designated appointee shall serve as the administrative supervisor. The commissioner may prohibit the insurer from doing any of the following during the period of supervision, without the prior approval of the administrative supervisor: a. Dispose of, convey or encumber any of its assets or its business in force; b. Withdraw any of its bank accounts; c. Lend any of its funds; d. Invest any of its funds; e. Transfer any of its property; f. Incur any debt, obligation or liability; g. Merge or consolidate with another company; h. Approve new premiums or renew any policies; i. Enter into any reinsurance contract or treaty; j. Terminate, surrender, forfeit, convert or lapse any insurance policy, certificate or contract, except for nonpayment of premiums; k. Release, pay or refund premium deposits, accrued cash or loan values, unearned premiums, or other reserves on any insurance policy, certificate or contract; l. Make any material change in management; m. Increase salaries and benefits of officers, directors, or employees, or the payment of bonuses, dividends or other payments; or n. Such other acts as the commissioner deems necessary to protect the interests of the insurer's policyholders and the public. L.1993,c.245,s.5.

N.J. Stat. § 17:51A-6 Contesting of action

6. During the period of supervision the insurer may contest an action taken or proposed to be taken by the administrative supervisor specifying the manner wherein the action being complained of would not result in improving the condition of the insurer. L.1993,c.245,s.6.

N.J. Stat. § 17:51A-7 Initiation of judicial proceedings

7. Nothing contained in this act shall preclude the commissioner from initiating judicial proceedings to place an insurer in conservation, rehabilitation or liquidation, or other delinquency proceedings, however designated under the laws of this State, regardless of whether the commissioner has previously initiated administrative supervision proceedings under this act against the insurer. L.1993,c.245,s.7.

N.J. Stat. § 17:51A-8 Rules, regulations

8. The commissioner may, pursuant to the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), promulgate rules and regulations as are necessary to effectuate the purposes of this act. L.1993,c.245,s.8.

N.J. Stat. § 17:51A-9 Commissioner may meet with supervisor, attorney, representative

9. Notwithstanding any other provision of law to the contrary, the commissioner may meet with a supervisor appointed under this act and with the attorney or other representative of the supervisor, without the presence of any other person, at the time of any proceeding or during the pendency of any proceeding held under authority of this act to carry out the commissioner's duties under this act or for the supervisor to carry out his duties under this act. L.1993,c.245,s.9.

N.J. Stat. § 17:51A-10 Governmental immunity

10. There shall be no liability on the part of, and no cause of action of any nature shall arise against, the commissioner, the department or its employees or agents for any action taken by them in the performance of their powers and duties under this act. L.1993,c.245,s.10.

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