N.J. Stat. tit. 17, ch. 49A

in effect

N.J. Stat. § 17:49A-1 Short title

This act shall be known, and may be cited as the "Nonprofit Corporation--Keys Amendment Facility Insurance Pooling Act." L. 1987, c. 431, s. 1.

N.J. Stat. § 17:49A-2 Findings, declarations

The Legislature finds and declares that: a. The lack of availability and escalating cost of liability insurance, when available, has caused a crisis nationally and in this State. Not-for-profit and nonprofit corporations as well as medical and non-medical facilities that provide residences for the elderly and disabled have been especially hard hit by the liability insurance crisis. b. It is the public policy of this State that facilities which operate without profit or provide residential settings where significant numbers of elderly or disabled Supplemental Security Income (SSI) recipients reside should have access to adequate and affordable liability insurance coverage. c. To this end, it is incumbent upon the State to provide a means by which adequate and affordable liability coverage can be obtained by these entities. L. 1987, c. 431, s. 2.

N.J. Stat. § 17:49A-3 Definitions

3. As used in this act: a. "Board" means the board of trustees or the group of persons vested with management of the business and affairs of a nonprofit corporation regardless of the name by which the group or persons are designated. b. "Keys amendment facility" means a medical or non-medical residential setting designated by the State as a facility that meets the requirements of the "Social Security Act," Pub.L. 93-233 (42 U.S.C. 1382e) as implemented by 45 CFR 1397.1 et seq. c. "Nonprofit corporation" means any corporation organized under the "New Jersey Nonprofit Corporation Act," N.J.S.15A:1-1 et seq., any corporation as defined by N.J.S.15A:1-2e or any corporation organized pursuant to Title 16 of the Revised Statutes. d. "Owner" means the person or group vested with ownership and management of a Keys amendment facility regardless of the name by which the person or group is designated. L.1987,c.431,s.3; amended 1995,c.377,s.1.

N.J. Stat. § 17:49A-4 Joint insurance funds

a. The board of a nonprofit corporation may, by resolution, agree to participate with any other nonprofit corporation or corporations in a joint insurance fund for the purpose of insuring against liability, property damage, and workers' compensation. b. The owner of a Keys amendment facility may agree, in writing, to participate with any other Keys amendment facility or facilities in a joint insurance fund for the purpose of insuring against liability, property damage, and workers' compensation. L. 1987, c. 431, s. 4.

N.J. Stat. § 17:49A-5 Insurance fund commission

a. Upon the establishment of a nonprofit corporation joint insurance fund, the chief executive officer or the board of each participating nonprofit corporation shall appoint one of its officers or one member of its board to represent that nonprofit corporation as insurance fund commissioner. Together, they shall constitute an insurance fund commission. Commissioners shall hold office at the pleasure of the chief executive officer or board who appointed them, or as long as they remain a member of the board or a corporate officer, whichever shall be less, and until their successors shall have been duly appointed and qualified. In the event that the number of nonprofit corporations represented is an even number, an additional member shall be annually selected by the participating nonprofit corporations. If the total number of commissioners exceeds seven, the commissioners shall annually meet to select not more than seven commissioners to serve as the executive committee of the fund. The executive committee shall exercise the full power and authority of the commission. Vacancies on the executive committee shall be filled by election of the entire commission. The commissioners shall serve without compensation. Any vacancy in the office of insurance fund commissioner shall be filled by an appointment by the chief executive officer or board of the participating nonprofit corporation as described in this subsection. The commission shall annually elect a chairman and a secretary. b. Upon the establishment of a Keys amendment facility joint insurance fund, the owner of each participating Keys amendment facility shall represent, or the owners shall appoint one owner to represent that facility as insurance fund commissioner. Together, they shall constitute an insurance fund commission. Commissioners of Keys amendment facility joint insurance funds who represent a facility that has more than one owner shall serve as commissioner as long as they remain an owner of the facility and until their successors shall have been duly appointed and qualified. In the event that the number of facilities is an even number, an additional member shall be annually selected by the participating facilities. If the total number of commissioners exceeds seven, the commissioners shall annually meet to select not more than seven commissioners to serve as the executive committee of the fund. The executive committee shall exercise the full power and authority of the commission. Vacancies on the executive committee shall be filled by election of the entire commission. The commissioners shall serve without compensation. Any vacancy in the office of insurance fund commissioner shall be filled by the owner of a Keys amendment facility as described in this subsection. The commission shall annually elect a chairman and a secretary. L. 1987, c. 431, s. 5.

N.J. Stat. § 17:49A-6 Bylaws

The commissioners of any joint insurance fund created under the provisions of this act shall prepare and, after the approval by resolution of the board of each participating nonprofit corporation, or approval of the owner of each participating Keys amendment facility, as the case may be, shall adopt bylaws for the joint insurance fund. The bylaws shall include, but not be limited to: a. Procedures for the organization and administration of the joint insurance fund, the insurance fund commission and, if appropriate, the executive board of the fund. The procedures may include the designation of one participating nonprofit corporation or Keys amendment facility, as the case may be, to serve as the lead agency to be responsible for the custody and maintenance of the assets of the fund and such other duties as may be assigned by the commissioners of the fund; b. Procedures for the assessment of members for their contributions to the fund and for the collection of contributions in default; c. Procedures for the maintenance and administration of appropriate reserves in accordance with sound actuarial principles; d. Procedures for the purchase of commercial direct insurance or reinsurance, if any; e. Contingency plans for paying losses in the event that the fund is exhausted; f. Procedures governing loss adjustment and legal fees; g. Procedures for the joining of the fund by a nonparticipating nonprofit corporation or Keys amendment facility, as the case may be; h. Procedures for the withdrawal from the fund by a participating nonprofit corporation or Keys amendment facility, as the case may be; i. Procedures for the expulsion of a participating nonprofit corporation or Keys amendment facility, as the case may be; j. Procedures for the termination and liquidation of the joint insurance fund and the payment of its outstanding obligations; and k. Such other procedures and plans as the Commissioner of Insurance may require by rule or regulation. L. 1987, c. 431, s. 6.

N.J. Stat. § 17:49A-7 Plan of risk management

The commissioners shall prepare, or cause to be prepared, a plan of risk management for the joint insurance fund. The plan shall include, but not be limited to: a. The perils or liabilities to be insured against; b. Limits of coverage, whether self-insurance, direct insurance purchased from a commercial carrier, or reinsurance; c. The amount of risk to be retained by the fund; d. The amount of reserves to be established; e. The contributions to be paid by each participating nonprofit corporation or Keys amendment facility, as the case may be; f. Coverage to be purchased from a commercial insurer, if any; g. Reinsurance to be purchased, if any, and the amount of premium therefor; and h. Such other procedures and information as the Commissioner of Insurance may require by rule or regulation. For purposes of this section "a plan of risk management" is a plan, and activities carried out under the plan, binding upon the participants in a joint insurance fund to reduce risk of loss with respect to a particular line of insurance protection or coverage provided by a fund. Plans of risk management also include the administration of one or more funds, including the processing and defense of claims brought against or on behalf of participants. L. 1987, c. 431, s. 7.

N.J. Stat. § 17:49A-8 Approval by commissioner

No joint insurance fund shall begin providing insurance coverage to its participants until its bylaws and plan of risk management have been approved as provided in this section. a. The commissioners of each joint insurance fund shall file with the Commissioner of Insurance for his approval a copy of the fund's bylaws adopted pursuant to section 6 of this act and a copy of the fund's plan of risk management prepared pursuant to section 7 of this act. b. Within 30 working days of receipt, the Commissioner of Insurance shall either approve or disapprove the bylaws or plan of risk management of any joint insurance fund. If the Commissioner of Insurance fails either to approve or disapprove the bylaws or plan of risk management within that 30 working day period, the bylaws or plan shall be deemed approved. c. If any bylaws or plan shall be disapproved, the Commissioner of Insurance shall set forth in writing the reason for disapproval. Upon the receipt of the notice of disapproval, the commissioners of the affected joint insurance fund may request a hearing. The hearing shall be convened by the Commissioner of Insurance in a timely manner. L. 1987, c. 431, s. 8.

N.J. Stat. § 17:49A-9 Insurance coverage

Upon the approval of its bylaws and plan of risk management pursuant to the provisions of section 8 of this act, a joint insurance fund may provide insurance coverage to its participants by self-insurance, the purchase of commercial insurance or reinsurance, or any combination thereof. L. 1987, c. 431, s. 9.

N.J. Stat. § 17:49A-10 Amendments

The commissioners may, from time to time, amend the bylaws and plan of risk management of the fund; provided, however, that no such amendment shall take effect until approved as provided in this section. a. The commissioners shall file with the Commissioner of Insurance for his approval a copy of any amendment to the bylaws of the fund upon approval, by resolution, of the board of each participating nonprofit corporation, or written approval signed by the owner of each participating Keys amendment facility, as the case may be, or any amendment to the plan of risk management, upon adoption by the commissioners. b. Within 30 working days of receipt, the Commissioner of Insurance shall either approve or disapprove any amendment to the bylaws or plan of risk management. If the Commissioner of Insurance fails either to approve or disapprove the amendment within that 30 working day period, the amendment shall be deemed approved. c. If any amendment shall be disapproved, the Commissioner of Insurance shall set forth in writing the reasons for disapproval. Upon the receipt of the notice of disapproval, the commissioners of the affected joint insurance fund may request a hearing. The hearing shall be convened by the Commissioner of Insurance in a timely manner. L. 1987, c. 431, s. 10.

N.J. Stat. § 17:49A-11 Suspension, termination of authority

The Commissioner of Insurance shall have the authority to suspend or terminate the authority of any joint insurance fund, or to assume control of the insurance fund, or to direct or take any action he may deem necessary, for good cause, to enable a fund to meet its obligations, cover its expected losses or to liquidate, rehabilitate or otherwise modify its affairs. Such action shall be taken by the Commissioner of Insurance in the event of: a. Failure to comply with the rules and regulations promulgated by the Commissioner of Insurance or with any of the provisions of this act; b. A failure to comply with a lawful order of the Commissioner of Insurance; or c. A deterioration of the financial condition of the fund to the extent that it causes an adverse effect upon the ability of the joint insurance fund to pay expected losses. L. 1987, c. 431, s. 11.

N.J. Stat. § 17:49A-12 Filing of agreements

The Commissioner of Insurance may, in his discretion, require the commissioners of any fund to file copies of any agreements or contracts entered into by the commissioners of the fund, or any other pertinent documents as he may deem necessary. L. 1987, c. 431, s. 12.

N.J. Stat. § 17:49A-13 Annual audit

The insurance fund commissioners or the executive board thereof, as the case may be, shall cause an annual audit to be conducted by an independent certified public accountant in accordance with the rules and regulations promulgated by the Commissioner of Insurance pursuant to section 16 of this act. Copies of every audit shall be submitted to the Commissioner of Insurance within 30 working days of its completion. L. 1987, c. 431, s. 13.

N.J. Stat. § 17:49A-14 Examination

The Commissioner of Insurance may conduct an examination of any joint insurance fund that he deems necessary. The expense of any such examination shall be borne by the fund. L. 1987, c. 431, s. 14.

N.J. Stat. § 17:49A-15 Not insurance company

A joint insurance fund established pursuant to the provisions of this act is not an insurance company nor an insurer under the laws of this State, and the authorized activities of the fund do not constitute the transaction of insurance nor the conducting of an insurance business. A fund established pursuant to this act shall not be subject to the provisions of Subtitle 3 of Title 17 of the Revised Statutes. L. 1987, c. 431, s. 15.

N.J. Stat. § 17:49A-16 Rules, regulations

The Commissioner of Insurance shall promulgate rules and regulations, pursuant to the "Administrative Procedure Act," P.L. 1968, c. 410 (C. 52:14B-1 et seq.), to effectuate the purposes of this act. Such rules and regulations shall include, but not be limited to, the establishment, operation, modification and dissolution of joint insurance funds established pursuant to the provisions of this act. L. 1987, c. 431, s. 16.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.njleg.state.nj.us/legislative-activity/statutesFetched: 10/17/2026