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Home > Insurance Division > Solvency Regulation > Property and Casualty FAQs
Property Casualty Insurer - Frequently Asked Questions
Admission Accredited Reinsurer Formation of a Domestic Property Casualty Insurance Corporation
Acquisition Extensions of Authority Merger Name Change Redomesticate
Admission

What are New Jersey's requirements for statutory capital and surplus?

New Jersey requires a foreign or alien company seeking admission to have capital and surplus predicated on New Jersey's requirements for all lines of business for which it is authorized in its State of domicile.

Generally, a company having multiple line authority in its home State would be required to possess a minimum capital paid-up of $4,200,000 and an additional surplus of $5,550,000 before consideration can be given to its application. A company that does not have authority to write health insurance would be able to reduce these requirements by $700,000 and $2,800,000 respectively.

 

Beside the waivers in N.J.A.C. 11:1-10.1 et seq. does a company have to meet New Jersey's seasoning requirements?

In addition to the waivers contained in the regulation, a law passed on December 9, 1994 allows for a waiver if the line or lines of insurance for which the insurer or surety has applied are presently underserved in this State.

 

If a company believes it meets the requirements for admission, what must it do next?

Provide the Department with a "Letter of Intent" as described in N.J.A.C. 11:1-10.5. After these documents are received and reviewed, the Department will advise of a further course of action, or submit a UCAA expansion application.

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Extensions of Authority

What does a company need to submit for an Extension Of Authority if it has the authority to write that line in another State?

A company must submit evidence that it now has the charter power or that by an Act of the Home State, the company can write the kinds of insurance requested along with a New Jersey application form.

 

If a company is not currently writing a line in another jurisdiction, what must be submitted?

A plan of operation must be submitted including, but not limited to, the following:

  • five year proforma projections in the format of page 4 of the Annual Statement including a narrative of the assumptions used in preparing the model and the reasons for arriving at such assumptions;
  • marketing plan;
  • underwriting standards and expertise - include how the company plans to obtain the necessary expertise, if current staff give a short description of qualifications;
  • claim handling - include the manner in which the company plans to adjust and process claims. If the company presently has expertise in the claim area for the requested line provide the Department with a narrative or resumes of the individuals involved. If the company does not already have said extertise provide the company's plan to obtain same including any resumes or qualifications of individuals or firms the company plans to retain.
  • And, if the company is requesting authority to write workers' compensation and employers' liability insurance, the company must become a member of the Compensation Rating and Inspection Bureau prior to this authority being granted.
 

How can I contact the Compensation Rating and Inspection Bureau?

Compensation Rating and Inspection Bureau (CRIB)
60 Park Place
Newark, N.J. 07102
Phone: 973-622-6014

What if health insurance is being requested?

E-mail Mary Pesce in the Office of Solvency Regulation.

Is there a fee for an Extension Of Authority?

Yes. There is a $500 fee per company for the processing of an application for Extension Of Authority.

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Accredited Reinsurer

What regulation provides the procedure for becoming accredited?

N.J.A.C. 11:2-28 et seq. and refer specifically to N.J.A.C. 11:2-28.4. This is the section of the regulation that explains the procedure for becoming accredited in New Jersey. Companies with less than $20,000,000 in surplus cannot be deemed approved and must receive a written notification.

What must be submitted to become accredited?

The company must submit the following:

  • A letter requesting approval for accreditation and listing all additional information the company wishes to have considered in support of the request;
  • A non-refundable filing fee, payable to the Treasurer, State of New Jersey, in the amount of $1,000;
  • A properly executed form AR-1;
  • A certified copy of the company's Certificate of Authority or Compliance (or equivalent document) from its State of domicile;
  • A copy of the company's most recent annual statement (with all attachments ie. management discussion, insurance expense exhibit, etc.)
  • The company's most recent audited financial statement;
  • A current actuarial opinion meeting New Jersey guidelines;
  • A copy of the company's quarterly statement for the quarter immediately preceding the application.

Where should this information be sent?

Attention:Reinsurance Accreditation
Office of Solvency Regulations
Department of Banking and Insurance
P.O. Box 325
Trenton, NJ 08625-0325

What about a company with over $20,000,000 in surplus?

The Commissioner has 120 days in which to disapprove the request. The company will receive an acknowledgment of the filing within 2 weeks of the receipt and a letter either approving a company's accreditation through August 31 of that year or denying its request prior to the expiration of the 120 day time period.

NOTE: If the company has less than $20,000,000 in surplus, the Commissioner is not required to respond within 120 days.

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Formation of a Domestic Property Casualty Insurance Corporation (Stock or Mutual)

What regulation covers formation of a domestic property casualty insurer?

N.J.A.C. 11:1-28 et seq.

What should be included in the feasibility study that is submitted to the Commissioner?


A detailed plan of operation of the applicant which shall:

  • Include and explain its plan of operation;
  • Explain its sources of funding;
  • Describe its marketing strategy;
  • Describe its underwriting procedures and guidelines;
  • Explain the administrative and legal arrangements to be made for the adjustment of claims and the recovery of salvage and subrogation;
  • Describe its territory of operation;
  • Describe the qualifications of the senior officers of the applicant responsible in the areas of claims, underwriting and investments;
  • Describe the proposed maximum amount of coverage by line of business;
  • Describe the proposed retention by line of business;
  • Describe the proposed reinsurance arrangements
  • Describe the proposed methods for the handling of consumer complaints;
  • Include the applicant's proposed organization chart; and,
  • Describe the proposed dividend policy (policyholder and shareholder).
    A summary of the applicant's initial rating system, to the extent its proposed operations are regulated, which shall include:
  • Rate by lines of business;
  • Proposed statistical agents (if any):
  • Independent filings; and
  • The rating bureau (if any).

  • A five year projection of the following certified by a qualified actuary and accompanied by a narrative explaining the sources of anticipated premium and all assumptions made in developing the entire projection:

  • Assets, liabilities and surplus and other funds in the format of the Assets page and the Liabilities and Surplus and Other Funds page in the Annual Statement representing the start-up year of the applicant and the five successive year-ends;
  • Underwriting and investment income in the format of the Underwriting and Investment Exhibit, Statement of Income in the Annual Statement for each of the five years;
  • The following information by line of business for each of the five years (the line of business classification shall be those set forth in the Underwriting and Investment Exhibit, Part Two in the Annual Statement:

    1. Premiums earned;
    2. Losses incurred;
    3. Loss expenses incurred, and
    4. Ratios of the sum of the losses and loss expenses to the premium earned.
    5. The projected values required in the Underwriting and Investment Exhibit, Part Four - Expenses in the Annual Statement.

Each applicant shall submit a $1,000 filing fee with the filing of the information required by the feasibility study to cover the costs of Department review of such information.

All filings shall be sent to:

Attn: Formation of Domestic Companies
New Jersey Department of Banking and Insurance
Office of Solvency Regulations
P.O. Box 325
Trenton, NJ 08625-0325

Within 60 days from the receipt of all information and the filing fee from the applicant, the Commissioner shall, in writing, either accept or reject the applicant's feasibility study.

If the feasibility study is accepted, the applicant then must submit the corporation's original certificate of incorporation, which the Department will submit for review and certification by the State Attorney General of New Jersey.

In addition to the Certificate of Incorporation, the following must be submitted to the Department:

  • By-Laws;
  • Biographical affidavits -- one for each incorporator, officer, director of the proposed company;
  • New Jersey State Police, State Bureau of Identification Request For Criminal History Record Information, form SBI 212A (Rev. 7-94) for each officer, director, incorporator or stockholder with controlling interest of the proposed insurer with a check totalling $18/form and payable to the New Jersey State Police. These forms must be completed on original yellow forms - do not photocopy forms!

    The orginal recorded Certificate of Incorporation must be returned to the Department of Banking and Insurance for filing. Capital must be raised and a minimum $100,000 (market and par value) deposit made with the Commissioner of Banking and Insurance.

    Membership in the Compensation Rating and Inspection Bureau, 60 Park Place, Newark, N.J. 07102 is a prerequisite for the authority to write workers' compensation insurance.

    An organization exam should then be requested. Once the organization exam has been completed and filed, the company should be in a position to receive its Certificate of Authority. During the course of the organization exam management agreements, service agreements and cost-sharing arrangements will be reviewed. However, all such arrangements necessitate a Form D filing pursuant to N.J.S.A. 17:27A et seq. and are not deemed approved simply because they were reviewed during the course of the organization examination.

How long does a company have to receive a Certificate of Authority?

Pursuant to N.J.S.A. 17:17-10, a company has one year from the date the Certificate of Incorporation is certified by the Attorney General to receive a Certificate of Authority. If a company fails to obtain a Certificate of Authority within one year, it shall be dissolved and its Certificate of Incorporation null and void.

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Acquisition

What is the statute that controls acquisitions?

N.J.S.A. 17:27A-4.1

What documents does the company have to submit?

The company must submit the following:

      • One copy of the final Form A filed (just the body of the Form A; the various attachments and exhibits need not be submitted.)
      • One certified copy of the approval of the acquisition by the domiciliary state's Department of Insurance;
      • A brief description of any other material change in the company's corporate existence prior or subsequent to the proposed acquisition (ie. merger, name change, redomestication, assumption of business, etc) If none has occurred, the letter should state so;
      • A clear copy of the post-acquisition corporate organizational chart identifying the relationship between the acquired insurer and its newly affiliated companies;
      • Number of New Jersey policyholders, by kind of insurance, currently insured with the acquired company;
      • In view of the referenced acquisition , confirm the following information for the acquired company:
        • NAIC Code Number
        • NAIC Group Number
        • Federal Employer's Identification Number
        • Statutory Home Office Address
        • Mail Address
        • Telephone Number (general operator's number)
        • Effective Date Of Acquisition
        • Company President
        • Corporate Secretary
      • A statement as to whether a Form E is required to be filed.

In addition, those insurers listed by the Department as an acceptable surety for the provision of bonds on public work contracts in this state, pursuant to N.J.A.C. 11:1-41.1 et seq. must complete an amended Appendix B, taking care to note any changes in the information required by the company in view of the change in ownership and affiliation (ie. telephone number, mail address, NAIC company code number, NAIC group code).

This information must be sent directly to:

    Department of Banking and Insurance
    Surety Company List
    P.O. Box 325
    Trenton, NJ 08625

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Name Change

Is there a way I can reserve a company name?

There is no provision under New Jersey statutes for reservation of a corporate name for use by an insurer.

After the Department says I can use a company name, what is next?

The company submits the following to the Department:

  • A certified copy of the approval of the name change by the domiciliary state's Department of Insurance;
  • A certified copy (full and complete set) of the amended Charter Papers and/or Articles of Incorporation as restated to reflect the new name;
  • A copy (full and complete set) of the company's By-Laws, as restated to reflect the name change;
  • A certified copy of the company's current Certificate of Compliance and/or Certificate of Authority issued by the domiciliary state's Department of Insurance reflecting the new corporate name;
  • A brief description of any other material change in the company's corporate existence prior or subsequent to the proposed name change (ie. merger, acquisition, redomestication, etc.). If none occurred, so state in the letter. NOTE: If an acquisition was entered into, provide a copy of the approval of the Insurance Commissioner involved, a copy of the final Form A (abbreviated version) filed, and the new corporate organizational chart.

  • A copy of the notice which the company plans to send to the policyholders advising them of the name change. Note that the submission of forms at this time does not constitute a filing pursuant to the statute.

  • Form for the appointment of the Commissioner of Insurance (PDF) and his or her successors in office as Attorney for Service of Process, upon whom all orginial process in any action or legal preceeding against it may be served.

  • Copy of the company's most recent NAIC Quarterly Statement.
  • In view of the name change, confirm the following information concerning the company:
    • NAIC Code Number
    • NAIC Group Number
    • Federal Employer's Identification Number
    • Statutory Home Office Address
    • Mail Address
    • Telephone Number (general operator's number)
    • Effective Date of Name Change
    • Company President
    • Company Secretary

Concurrent with the submission of this information, the company should also contact the Department's Health Bureau and Life Bureau, or the Rating Bureau for property casualty companies, as to the amending of policy forms previously filed by the Department. With respect to the licensing of producers, the company should contact the Department's Licensing Bureau for information.

In addition, those insurers listed by the Department as an acceptable surety for the provision of bonds on public work contracts in this state, pursuant to N.J.A.C. 11:1-41.1 et seq. must complete an amended Appendix B, taking care to note any change in the information required of the company (ie. telephone number, mailing address, NAIC company number, NAIC group code number and Group Name etc.)

This information must be sent directly to the:

Department of Banking and Insurance
Attention: Surety Company List
P.O. Box 325
Trenton, NJ 08625

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Merger

What information must a company submit that is involved in a merger?

A company should submit the following:

  • Certified copies of the Plan of Merger and/or Articles of Merger. Also submit a brief description of the merger transaction and explain the impact on the company's Plan of Operations and the policyholders.

  • Certified copies of the approvals of the merger by the Insurance Commissioners involved.

  • Certified copy of the surviving company's certificate of compliance and/or Certificate of Authority issued by the domiciliary state's Department of Insurance.

  • A brief description of any other material change(s) in both company's corporate existence prior or subsequent to the merger (ie. acquisition, business assumptions, name changes, redomestications, etc.) If none occurred, the letter should so state.
    NOTE: If an acquisition was entered into, provide a copy of the approval of the Insurance Commissioner involved, a copy of the Final Form A (abbreviated version) filed, and the new corporate organizational chart.
  • A copy of the notice which the surviving company plans to send to the policyholders advising them of the merger. Note that the submission of forms at this time does not constitute a filing pursuant to the statute. Contact the Department's Health Bureau and/or Life Bureau, or Rating Bureau for property casualty companies, with any questions concerning the filing of such assumption forms and notices.

  • Confirm the following information concerning the company:
    • NAIC Code Number
    • NAIC Group Number
    • Federal Employer's Identification Number
    • Statutory Home Office Address
    • Mail Address
    • Telephone Number (general operator's number)
    • Effective Date of Name Change
    • Company President
    • Company Secretary

  • Provide a statement, signed by an officer of the company, informing the Department as to the number of New Jersey policies, by kind of insurance that are involved in this transaction.

  • Contact the Department's Director of Producer Licensing for further information and provide a statement, signed by an officer of the company confirming that the company has notified the Department's Licensing Section of the merger.
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Redomestication

What information must a company submit concerning a redomestication?

A company should submit the following:

  • Certified copies of the approvals of the redomestication by the Insurance Commissioners involved.

  • Certified copy of the company's Certificate of Compliance and/or Certificate of Authority issued by the domiciliary state's Department of Insurance reflecting the new state of domicile.

  • A brief description of any other material change(s) in the company's corporate existence prior or subsequent to the redomestication (ie. acquisition, business assumptions, name changes, redomestications, etc.) If none occurred, the letter should so state.

    NOTE: If an acquisition was entered into, provide a copy of the approval of the Insurance Commissioner involved, a copy of the Final Form A (abbreviated version) filed, and the new corporate organizational chart.

    • A certified copy of the amended and/or restated Charter Papers and/or Articles of Incorporation of the company relecting the new state of domicile. Provide the Department with a complete copy (full set) of the applicable document.

    • A certified copy of the company's By-Laws as amended and restated to reflect the redomestication.

    • Form for the appointment of the Commissioner of Insurance (PDF) and his or her successors in office as Attorney for Service of Process, upon whom all orginial process in any action or legal preceeding against it may be served.

    • Confirm the following information concerning the company:
      • NAIC Code Number
      • NAIC Group Number
      • Federal Employer's Identification Number
      • Statutory Home Office Address
      • Mail Address
      • Telephone Number (general operator's number)
      • Effective Date of Name Change
      • Company President
      • Company Secretary
      • A brief description as to why the redomestication has occurred, and a comment as to how it will effect the company's Plan of Operations.

      • Contact the Department's Director of Producer Licensing for further information and provide a statement, signed by an officer of the company confirming that the company has notified the Department's Licensing Section of the redomestication.
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