Before Judges Long, Kleiner and Kimmelman.
The opinion of the court was delivered by: Kimmelman, J.A.D.
 Argued April 28, 1998
On appeal from the New Jersey Department of Banking and Insurance.
At issue in this appeal is the contention raised by appellants American Insurance Association and Alliance of American Insurers *fn1 that the Commissioner of Banking and Insurance (Commissioner) had no legal authority to direct the New Jersey Property-Liability Insurance Guaranty Association (PLIGA) to make an eighth annual assessment of $160 million on their members to help defray the unfunded liabilities of the New Jersey Automobile Full Insurance Underwriting Association (commonly known as the Joint Underwriting Association or JUA) and the Market Transition Facility (MTF).
By way of brief historical background, this appeal may best be understood in the following context: For many years, it has been mandatory that automobile liability insurance coverage be maintained by owners of vehicles registered in this State. N.J.S.A. 39:6A-3. Prior to 1983, drivers who could not obtain coverage directly from insurers in the open and voluntary market were insured through an assigned risk plan, under which the Commissioner apportioned high-risk drivers amongst all auto insurers doing business in New Jersey. See N.J.S.A. 17:29D-1. In 1983, the assigned-risk system was replaced by the Automobile Full Insurance Availability Act, N.J.S.A. 17:30E-1 to -24, which created the JUA. State Farm Mut. Auto. Ins. Co. v. State, 124 N.J. 32, 40-41 (1991).
Under the JUA plan, high-risk drivers were allocated to insurance carriers doing business in the State and to the JUA itself, with premiums set at the same rates as those found in the voluntary market. To defray the added costs incurred from insuring high-risk drivers, the proceeds of certain fees and surcharges on motorists were allocated to the JUA. N.J.S.A. 17:30E-8. By 1988, over fifty percent (50%) of New Jersey drivers had to be insured through the JUA, and by 1990, the JUA had accumulated a deficit of over $3.3 billion in unpaid claims and losses. State Farm, supra, 124 N.J. at 42; In re Rate Filing by the Market Transition Facility of N.J., 252 N.J. Super. 260, 265 (App. Div. 1991), certif. denied, 127 N.J. 565 (1992).
The Fair Automobile Insurance Reform Act (FAIRA), N.J.S.A. 17:33B-1 to -63, was enacted in 1990 in an attempt to phase out high-risk drivers from the JUA, and with the further purpose of creating funding mechanisms to pay off the JUA's debt. The New Jersey Automobile Insurance Guaranty Fund (Auto Fund) was created by FAIRA to collect and disburse the monies generated by the various funding mechanisms. N.J.S.A. 17:33B-5. For example, N.J.S.A. 17:33B-57 to -62 imposed annual fees on lawyers, doctors, chiropractors, therapists, and auto body repair facilities to be remitted to the Auto Fund. Additionally, a significant funding source to help retire the JUA debt was assessments to be imposed by PLIGA on automobile insurance carriers. The proceeds of the assessments were denominated as "loans" to be paid into the Auto Fund. N.J.S.A. 17:30A-8a(10).
PLIGA *fn2 was created in 1974, N.J.S.A. 17:30A-1 to -20, to impose assessments on New Jersey property-casualty insurers to be used to pay claims against carriers that had become insolvent. N.J.S.A. 17:30A-2a. The Legislature selected PLIGA as the statutory mechanism to collect the additional assessments to be imposed on automobile insurance carriers for the JUA's benefit and to remit the same to the Auto Fund. N.J.S.A. 17:30A-5b and -8a. The Legislature obligated PLIGA to:
(9) Assess member insurers in amounts necessary to make loans pursuant to paragraph (10) of this subsection.
(10) Make loans in the amount of $160 million per calendar year, beginning in calendar year 1990, to the New Jersey Automobile Insurance Guaranty Fund created pursuant to section 23 of P.L. 1990, c.8 (C. 17:33B-5), except that no loan shall be made pursuant to this paragraph after December 31, 1997.
[N.J.S.A. 17:30A-8a(9) and (10).]
In State Farm, the Supreme Court described the assessment procedure as follows:
These assessments, denominated by the Act as "loans," are paid into the Auto Fund. N.J.S.A. 17:30A-8a(10). They are to be set at rates designed to net $160 million per year for eight years (1990 through 1997); for 1990, the assessments ...