NJ Governor Says Company Must Sell Auto Insurance
TRENTON, N.J. (AP) _ Gov. Jim Florio on Tuesday said the ITT Hartford Group would be barred from selling any insurance in New Jersey if it refuses to sell auto insurance.
The Connecticut-based insurer is attempting to withdraw from the New Jersey auto insurance market in reaction to Florio’s auto insurance reforms. The program forces the industry to pay nearly half of a $3 billion debt incurred by a state-run insurance pool that covers high-risk drivers.
ITT Hartford sells about 23,000 auto insurance policies in the state through its subsidiary, the Twin City Fire Insurance Co. If it were forced out of the New Jersey insurance market altogether, the company could lose more than $224 million in premiums.
″Our new law brings back fairness and it requires insurance companies to play by the rules,″ said Florio. ″If they won’t sell us car insurance, we won’t let them sell anything. They can’t pick and choose which insurance lines they wish to sell in New Jersey.″
ITT Hartford and the state have fought in court over the company’s attempt to leave New Jersey. State officials have maintained that the company failed to provide a plan for ″orderly withdrawal″ to ensure that its customers have adequate time to find another insurer.
Florio said the action is allowed under the auto insurance reform law he signed in March. The governor has repeatedly threatened to force companies to give up other business if they refuse to sell auto insurance.
″Let the message be that we are serious in New Jersey about bringing down rates and real reform,″ Florio said. ″It is much easier to work with the insurance companies to make the new system work, but we can also work without them.″
Under an order issued by state Insurance Commissioner Sam Fortunato, ITT Hartford will be directed to give up all its lines of property, casualty, life and health insurance sold through 11 affiliates.
The firms took in $224.5 million in premiums from those insurance lines, said ITT Hartford spokeswoman Karen Paterno.
″We’re disappointed with Gov. Florio’s announcement regarding Twin City’s orderly withdrawal from the New Jersey auto insurance market,″ Ms. Paterno said. ″But we’re not prepared to comment on the actual order until we review it.″
Several other companies, including Colonial Penn, CIGNA, and Crum & Forster, have also announced they indend to stop writing auto insurance in New Jersey, said insurance department spokesman Leonard Karp. However, Karp said decisions on whether to bar companies from selling other lines of insurance will be made on a case-by-case basis.
Under Fortunato’s order, the company would be forced to give up all other lines of insurance over a five-year period and would also have to find replacement carriers for its customers.