Section: Effect of enactment of Revised Statutes upon existing offices, etc., and the incumbents thereof
a. Pursuant to the procedures and standards established in the plan of operation, the board shall solicit, by advertisement in at least two newspapers of general circulation in the State, proposals from members and eligible noninsurers to act as a servicing carrier for the association. Standards may include the submission of a deposit.
All proposals shall be publicly opened by the board, which, after consultation with, and the approval of, the commissioner, shall award a contract to the proposer or proposers, as the case may be, whose proposal, conforming to the solicitation for proposals, is most advantageous to the association and its policyholders in its judgment, upon consideration of price and other factors. The commissioner may reject any and all bids if he determines that the bid proposals do not serve the best interests of the association. If the bid process does not result in adequate servicing capacity for the association, capacity shall be achieved pursuant to the provisions of subsection e. of this section.
Any person who makes, or causes to be made, a false, deceptive, or fraudulent statement in any proposal to be a servicing carrier, or in the course of any proceeding in connection therewith, shall be subject to a fine of not less than $20,000.00, shall forfeit any fee which may be required to be submitted in conjunction with the proposal, and shall be permanently disqualified from submitting any further proposal under this section.
b. Insurers under common management or ownership may elect to submit an application to act as a servicing carrier in the name of any company in the group which is licensed and authorized to transact automobile insurance in this State. The commissioner may disapprove the action by the board, if he finds that the action is not in the best interests of the association, the insurer, or the purposes of this act, within 20 days of final approval by the board. The disapproval shall be made in writing and shall set forth the reasons for disapproval.
c. Any person other than a member may act as a servicing carrier if: (1) the person meets the standards of eligibility for non-insurer servicing carriers established by the commissioner in the plan of operation, after consultation with the board; and (2) the person is approved by the commissioner as being eligible. The plan of operation shall contain any standards of eligibility which the commissioner may deem appropriate for establishing the qualifications of persons desiring to become noninsurer servicing carriers, which standards may include, but not be limited to, financial soundness, the capacity to perform the services required, experience, and record of past performance.
The commissioner shall have the authority to exercise all the powers granted to him by Title 17 of the Revised Statutes, including the powers of examination, with respect to noninsurer servicing carriers deemed to be eligible pursuant to this subsection.
d. The standards of eligibility shall require that every non-insurer servicing carrier: (1) shall have minimum assets of $10,000,000.00; (2) shall have been in business for at least five years; (3) shall have had at least three years' experience in insurance related fields or activities; and (4) shall be able to demonstrate to the commissioner and the board that it has the capacity to issue and service a minimum of 100,000 private passenger automobile insurance policies.
e. After notice and hearing, the commissioner may require one or more members of the association or member of a group as provided in subsection b. of this section to act as servicing carriers, if he determines that the action is necessary to effectuate the purposes of this act, except that no company having less than 1% of the voluntary private passenger automobile insurance market in this State based on its net written car years of exposure shall be subject to the provisions of this subsection.
f. Pursuant to procedures established by the commissioner, any member of the association or eligible noninsurer which is acting as a servicing carrier may apply to the commissioner for permission to discontinue acting as a servicing carrier or to reduce its participation. After notice and a hearing, the commissioner may permit such insurer or eligible non-insurer to discontinue acting as a servicing carrier or to reduce its participation, on terms to be imposed by the commissioner, if the commissioner finds that such action is in the best interests of the insurer or eligible noninsurer, the association and the purposes of this act.
g. After notice and hearing, the association may recommend to the commissioner that the authority of a servicing carrier be terminated or the commissioner may terminate the authority of a servicing carrier to act as a servicing carrier, if the association or the commissioner determines that it is in the best interest of the association.
h. Any order of the commissioner pursuant to this section shall be subject to review by the Appellate Division of the Superior Court.
L. 1983, c. 65, s. 24; amended 1986,c.211,s.5; 1988,c.119,s.20.
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