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New Jersey Insurance Underwriting Association v. Clifford

Decided: November 10, 1970.

NEW JERSEY INSURANCE UNDERWRITING ASSOCIATION, APPELLANT,
v.
ROBERT L. CLIFFORD, COMMISSIONER OF INSURANCE OF THE STATE OF NEW JERSEY, RESPONDENT



Sullivan, Collester and Labrecque. The opinion of the court was delivered by Labrecque, J.A.D.

Labrecque

Appellant New Jersey Insurance Underwriting Association (Association) appeals from a directive by the Commissioner of Insurance (Commissioner) dated June 24, 1970 amending the Association's plan of operation to require that vandalism and malicious mischief insurance endorsements be made available on fire policies issued by its members after July 15, 1970, and requesting that prior to August 1, 1970 it present a proposal to the Commissioner for the writing of burglary and theft coverage. Notice of appeal was filed promptly and, though a stay of the directive was denied, the matter has been accelerated.

By L. 1968, c. 129, now N.J.S.A. 17:37A-1 et seq. , the Legislature enacted a mandatory program of property insurance coverage to be carried out under the supervision

and control of the then Commissioner of Banking and Insurance, now the Commissioner of Insurance. That statute, which became effective July 2, 1968, created the New Jersey Insurance Underwriting Association (plaintiff herein) to carry out a program of property insurance on behalf of applicants unable to procure such insurance by themselves by reason of environmental factors beyond their control.*fn1 Under the statute the Association was made up of all insurers authorized to write and engaged in writing property insurance on a direct basis within the State. N.J.S.A. 17:37A-3. The Association was required, within 90 days after the statute went into effect, to formulate plans for carrying into effect the statutory mandate, and to submit them to the Commissioner for review, approval, disapproval or amendment by him. N.J.S.A. 17:37A-7.

The program was to cover "essential property insurance," as defined in the statute. N.J.S.A. 17:37A-8. The statute also authorized the Commissioner to do all things necessary to enable the State, and any insurer participating in any plan approved or issued by him, to fully participate in any federal program of reinsurance "which may be hereafter adopted for purposes similar to the purposes of this act." N.J.S.A. 17:37A-25. One such program, designed to support state F.A.I.R. (Fair Access to Insurance Requirements) plans, was that later provided by 12 U.S.C.A. ยง 1749bbb et seq. (1968) (the National Insurance Development Program) with which we are here concerned.

Pursuant to the mandate of N.J.S.A. 17:37A-7 the Association submitted a plan of operation to the Commissioner. It was approved by him on November 25, 1968 with

a proviso that there be "constructive compliance with the provisions of section 2(a) of chapter 129 of the Laws of 1968." To this end he deemed it necessary that coverage against the perils of vandalism and malicious mischief be made available at once and that burglary and theft coverage be made available not later than June 1, 1969.

When, after long delay, the Association failed to comply, and after correspondents and consultation with the Association's directors, the Commissioner, on June 24, 1970, certified an amendment to the Association's plan of operation which directed that vandalism and malicious mischief endorsements be made available on fire policies issued after July 15, 1970. He also requested the Association to submit a proposal for the writing of burglary and theft coverage by August 1, 1970.

Since the subject of the appeal is a final decision of a state administrative agency, the matter is properly before us. R. 2:2-3(a)(2). Cf. Alberti v. Civil Service Comm'n , 41 N.J. 147, 150-152 (1963).

Appellant raises two points, which may be summarized as follows: (1) the Commissioner was without authority to order it to include vandalism, malicious mischief, burglary and theft in the plan of operation, and (2) assuming he was ...


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