INSURANCE

DEPARTMENT OF BANKING AND INSURANCE

DIVISION OF INSURANCE

Commercial Lines Insurance:

General Provisions

Scope Adopted Amendments: N.J.A.C. 11:13-1.2

Proposed: December 3, 2001 at 33 N.J.R. 4056(a)

Adopted: March 4, 2002 by Holly C. Bakke, Acting Commissioner

Department of Banking and Insurance

Filed: March 4, 2002 as R.2002 d.104, without change

Authority: N.J.S.A. 17:1-8.1, 17:1-15(e), 17:29AA-3(a)(9) and 17:29AA-29.

Effective Date: April 1, 2002

Expiration Date: November 10, 2002

Summary of Public Comments and Agency Responses:

The Department of Banking and Insurance ("Department") received written comments from Jeremy B. Hirsch, Associate Vice President of Public Affairs, Independent Insurance Agents of New Jersey; Jane Golden, Regional Manager, Governmental Relations, Insurance Services Office, Inc. ("ISO"); and Margaret Paris, Manager, P and C Compliance and Product Development, Farm Family Casualty Insurance Company.

COMMENT: One commenter noted that as a carrier submitting farm package filings in several states, the prior classification of farm insurance as a personal line in New Jersey was an anomaly. The commenter noted that most exposures insured on working farms are commercial oriented. The commenter thanked the Department for recognizing the need for the amendment and supported the proposal.

RESPONSE: The Department notes and appreciates the support for the amendment.

COMMENT: One commenter noted that a majority of the states presently classify farm- owners insurance as commercial lines insurance and that most rating organizations do the same. The commenter noted that currently many companies in New Jersey have had trouble getting approval for farmowners insurance changes and that the amendment reclassifying farmowners insurance from personal to commercial will bring New Jersey into conformity with other states and make it easier for insurers to do business in New Jersey. The commenter went on to commend the Department for proposing this change and supported the change.

RESPONSE: The Department notes and appreciates the support for the amendment.

COMMENT: One commenter noted that it had previously advocated for this amendment and that the amendment resulting in a reclassification of farmowners insurance to commercial lines permits procedures for farmowners insurance throughout the nation to become more uniform. The commenter believes that this will result in lower costs for rating organizations and their participating insurers. The commenter went on to strongly support the amendment.

RESPONSE: The Department notes and appreciates the support for the amendment.

A Federal standards analysis is not required because the adopted amendment is not subject to any Federal requirements or standards.

Full text of the adoption follows: