Bill
A 5846
Expands New Jersey auto-insurance territorial rating to up to 100 ZIP+4 territories, with Commissioner standards to boost accuracy and curb unfair rate disparities.
Note on document discrepancy
- The bill header lists the short title “Provides remedies for disrupted elections,” and several legislative action entries reference Election Law. The text of the Introduced Version supplied here, however, amends P.L.1998, c.21 (C.17:29A-48) and deals exclusively with territorial rating plans for private passenger automobile insurance. This summary is based on the actual statutory text provided (automobile insurance territorial-rating changes).
Purpose and intent
- To revise how territorial rating plans for private passenger automobile insurance are defined and regulated in New Jersey, allowing finer geographic granularity and setting limits and standards for the creation of territories used to determine territorial relativities and base rates.
Key provisions
- Geographic unit: Territories must be geographic areas defined by contiguous ZIP+4 codes and follow municipal boundaries “as closely as possible.”
- Maximum territories: A territorial map may contain up to 100 territories (current rule cited in the statement: 50).
- Commissioner authority: The Commissioner of Banking and Insurance must promulgate regulations establishing standards for creating new rating territories, including:
- Definition criteria emphasizing qualitative similarities/differences in driving environments (traffic density, population density, severity of loss, homogeneity, contiguity of towns/cities).
- Statistical credibility: territories must have a sufficient number of exposures to be statistically credible; the Commissioner will set the minimum exposures.
- Minimizing year-to-year variability and unfair/subsidizing disparities among contiguous territories with similar driving environments.
- Consideration of intraterritory vs. inter-territory traffic patterns (using Department of Labor & Workforce Development trip data where appropriate).
- Explicit rules on loss experience: allocated losses must account for insurer recoveries (e.g., subrogation) and must exclude loss impacts attributable to capping of certain driver classifications under prior law.
- Procedural cap: The Commissioner shall promulgate regulations to implement these standards.
- Effective date: The act takes effect on the 120th day after enactment and applies to territorial rating plans filed after that date.
Who is affected
- Primary: Insurers writing private passenger automobile insurance in New Jersey and rating organizations that file territorial rating plans.
- Secondary: New Jersey motorists and policyholders — a more granular territorial map can lead to more precise territorial relativities and thus potentially altered premiums for particular areas.
- Regulators: New Jersey Department of Banking and Insurance (rulemaking and oversight responsibilities).
Potential impacts (neutral framing)
- Increased granularity (ZIP+4, up to 100 territories) allows insurers to differentiate risk more precisely across smaller geographic areas — could improve actuarial accuracy of territorial relativities.
- May produce greater rate variation across neighborhoods; regulators’ standards and credibility thresholds are intended to limit unfair discrimination, instability, or marketing-driven map design.
Legislative status and sponsors
- Status: PRINT NUMBER 5846A; Introduced in the Assembly (listed date: June 16, 2025) and referred to the Assembly Financial Institutions and Insurance Committee.
- Primary sponsor: Eddie Gibbs. Cosponsors include Sarahana Shrestha, Brian Cunningham, Rebecca Seawright, Robert C. Carroll, Dana Levenberg, Charles Lavine, Maritza Davila, Tony Simone, Karines Reyes, Harvey Epstein, Amy Paulin.
- Related/companion bills: S-4563, S-4602; prior-session A-8581.
Effective/implementation timeline
- Becomes effective 120 days after enactment; applies to territorial rating plans filed after that effective date. The Commissioner must issue regulatory standards to operationalize the changes prior to or concurrent with that effective date.
Compiled from official sources — confirm details with the bill’s official record.
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