As of July 2, 2012, the seasoning requirements under NJAC 11:1-10.4 for foreign and alien property and casualty insurers have been reduced. Now, an insurer seeking a New Jersey Certificate of Authority to transact property and casualty insurance must have only three (3) years of qualifying operating history instead of five (5) years. In particular, an insurer must show:
- it is authorized in its state, district, territory, commonwealth, possession or country of domicile, to engage in the kinds of insurance business for which it is applying;
- active engagement in such business for a period of at least three years prior to the date of the application;
- that during either any two of the last three years or the most recent year, it generated a net income from operations, after Federal taxes, as reported in the Underwriting and Investment Exhibit in the Annual Statement; and
- its surplus has not decreased due to operations over the three-year period in question.
Revisions were also made to the seasoning waiver provisions, which include: corresponding reductions from five (5) years to three (3); elimination of criteria applicable to the insurer’s ultimate controlling parent; and the ability for the commissioner to waive seasoning requirements for an insurer that the commissioner determines would help prevent or ameliorate disruptions in the property/casualty insurance market. The New Jersey Division of Bank and Insurance is hoping that these changes will lead to an increase in competition, which could in turn benefit consumers. The seasoning requirements for foreign and alien life and health insurers, however, will remain at five (5) years.
