Insurer Groups Welcome N.J. Auto Coverage Plan

By Mark E. Ruquet

NU Online News Service, Jan. 15, 10:11 a.m.EST?Independent agent groups and company associations hada generally positive reaction to New Jersey Gov. James E.McGreevey's proposals for automobile insurance reform, butcautioned the key to its success would be the details.

In his State of the State address, Mr. McGreevey outlined ideasfor improving a marketplace that has the highest auto insurancerates in the nation. Included in his plan were proposals forfighting fraud, reducing premium rates for good drivers, andbringing more carriers back to the state to increasecompetition.

Mr. McGreevey noted that the state's problems "did not occurovernight and will not be solved overnight." But he called forspeedy passage of legislation that he said would be a "balancedapproach to a long-standing problem."

Denise Ronan, chairwoman of the Trenton-based IndependentInsurance Agents of New Jersey, said she was happy to hear thegovernor propose legislation that is aimed at bringing carriersback to the state. She emphasized that if the legislature were topass a reform package that did not address that issue it would be"insignificant."

"Market stabilization is the biggest problem, not price," shesaid.

Paul Monacelli, past-president of the Professional InsuranceAgents of New Jersey and chairman of the association's auto taskforce, said he too was glad to hear what the governor had tosay.

"I was pleased to hear the governor issue the challenge to fightfor the future of New Jersey and to do it now," he said. "I thinkthat slogan should be included with the New Jersey auto insuranceissue. We need do something right now because it is at the crisisstage."

Mr. Monacelli, chief executive officer of ADP/StatewideInsurance Agencies, in Morristown, N.J., praised the governor forhis nuance on the issue, and echoed Ms. Ronan's comments that theissue is market and not pricing.

"In New Jersey, long term, that is the solution," Mr. Monacellisaid.

Both said they were concerned about the details of thegovernor's plan and how it would be implemented. Mr. Monacelliadded that whatever is decided needs the continued input ofindependent agents to make it a viable solution.

The Downers Grove, Ill.-based Alliance of American Insurers andthe American Insurance Association headquartered in Washington,D.C. were generally favorable in their assessment of the governorsmessage.

Richard Stokes, government affairs representative for AAI'sNortheast Region, in a statement called it a "good first step," andadded the association was "cautiously optimistic."

He said the governor's proposals were encouraging, however, theAlliance is "not sure the governor's announcement goes farenough."

Tammy Velasquez, AIA assistant vice president, mid-Atlanticregion, said while the governor's proposals were a "comprehensiveapproach to auto reform," its success would rest on thedetails.

She added that it was paramount that the governor's plan bringsinsurers back to the state, adding that "where insurers compete forbusiness is a market where consumers win."