a. The Unsatisfied Claim and Judgment Fund, created pursuant to P.L.1952, c.174 (C. 39:6-61 et seq.) currently serves a dual purpose: its original intent to pay the claims of victims of hit and run or uninsured motor vehicle accidents in certain circumstances, and a subsequent objective to reimburse private passenger automobile insurers when medical expense benefits payments exceed $75,000 per person per accident.

b. When the Unsatisfied Claim and Judgment Fund was charged with reimbursing an insurer for medical expense benefits in excess of $75,000 per person per accident, the amount of medical expense benefits provided on a per person, per accident basis was unlimited. However, insurers are required at present to provide medical expense benefits only up to $250,000 per person per accident. Prospective elimination of the reimbursement function of the Unsatisfied Claim and Judgment Fund for medical expense benefits in excess of $75,000 per person for an injury suffered in an accident covered by a policy issued or renewed on or after January 1, 2004 is deemed appropriate. Insurers would continue to be reimbursed for medical benefits in excess of $75,000 per person per accident for injuries suffered in accidents covered by policies issued or renewed prior to January 1, 2004.

c. Since all motor vehicle liability policies issued in this State, except basic automobile insurance policies, include coverage for the payment of all or part of the sums which a person insured thereunder shall be legally entitled to recover as compensatory damages from owners or operators of uninsured motor vehicles (other than hit and run motor vehicles), the number of third party claims made against the Unsatisfied Claim and Judgment Fund is not substantial. It would be more efficient to have these claims administered by the New Jersey Property-Liability Insurance Guaranty Association, established pursuant to P.L.1974, c.17 (C. 17:30A-1 et seq.).

d. The New Jersey Automobile Full Insurance Underwriting Association, created pursuant to P.L.1983, c.65 (C. 17:30E-1 et seq.) and the Market Transition Facility, created pursuant to section 88 of P.L.1990, c.8 (C. 17:33B-11) have both ceased issuing private passenger automobile insurance policies and are currently in run off, operating only to process the remaining claims against them. Currently, the funding for the claims payment and other operational activities of the New Jersey Automobile Full Insurance Underwriting Association and the Market Transition Facility is primarily provided by the New Jersey Automobile Insurance Guaranty Fund, created pursuant to section 23 of P.L.1990, c.8 (C. 17:33B-5). However, existing statutes do not state how the consolidation or runoff operations of these entities will be handled. Administrative and operational efficiencies would result from consolidating these entities and transferring the claims handling and other administrative duties of these entities to the New Jersey Property-Liability Insurance Guaranty Association.

e. Based upon recent financial and actuarial analysis, it is anticipated that the value of all residual New Jersey Automobile Full Insurance Underwriting Association and Market Transition Facility assets, including the balances in the New Jersey Automobile Insurance Guaranty Fund, to be transferred to the New Jersey Property-Liability Insurance Guaranty Association will be adequate to allow the association to discharge all remaining obligations of the New Jersey Automobile Full Insurance Underwriting Association and Market Transition Facility which are now to be administered by the association. Since no asset shortfall is projected, no additional assessment or other revenue generating powers are being conferred upon the association at this time with respect to such remaining obligations.

f. It is in the public interest to authorize the transfer and consolidation of compatible operations of the Unsatisfied Claim and Judgment Fund, the New Jersey Automobile Full Insurance Underwriting Association, and the Market Transition Facility to the New Jersey Property-Liability Insurance Guaranty Association.

g. Following transfer to the New Jersey Property-Liability Insurance Guaranty Association by the Unsatisfied Claim and Judgment Fund of all its management, administrative and claim functions, the Unsatisfied Claim and Judgment Fund shall continue to exist as a separate legal entity subject to the provisions of P.L.2003, c.89 (C. 17:30A-2.1 et al.).

h. The New Jersey Property-Liability Insurance Guaranty Association will run off the remaining policyholder claim obligations of the New Jersey Automobile Full Insurance Underwriting Association and Market Transition Facility. The New Jersey Property-Liability Insurance Guaranty Association will also run off the obligations of the Unsatisfied Claim and Judgment Fund pursuant to section 2 of P.L.1977, c.310 (C. 39:6-73.1) and take over all governance, administrative and financial functions of the Unsatisfied Claim and Judgment Fund, including the claim payment function.

i. As part of the consolidation being accomplished by P.L.2003, c.89 (C. 17:30A-2.1 et al.), the New Jersey Property-Liability Insurance Guaranty Association is formally designated as a servicing facility for several statutory entities for which it currently provides administrative services and also for the Unsatisfied Claim and Judgment Fund which, pursuant to P.L.2003, c.89 (C. 17:30A-2.1 et al.), is transferring specified functions to the New Jersey Property-Liability Insurance Guaranty Association. The association is also authorized to serve, either by designation or by contract, as a servicing facility for other entities which may be recommended by the association’s board of directors and approved by the commissioner.

j. This act is not intended to abrogate in any way the settlement agreement entered into by the State and member insurers of the Market Transition Facility in June, 1994.

L.2003,c.89,s.1.