a. The Market Transition Facility, created pursuant to section 88 of P.L.1990, c.8 (C. 17:33B-11) to serve as an interim residual market mechanism and successor to the New Jersey Automobile Full Insurance Underwriting Association created pursuant to P.L.1983, c.65 (C. 17:30E-1 et seq.), ceased issuing and renewing private passenger automobile insurance policies on September 30, 1992. It is expected to have an operating deficit which the facility has projected to be approximately $1.3 billion.

b. The “Fair Automobile Insurance Reform Act of 1990,” P.L.1990, c.8 (C. 17:33B-1 et al.), provided that any losses sustained in the operation of the facility be apportioned to the member insurers of the facility. Subsequently, certain of these member insurers filed suit against the Commissioner of Insurance, challenging an order of the commissioner which apportioned these losses among the member insurers. Pending a resolution of the court challenge, the Superior Court has enjoined the use by the facility of the amounts paid by the member insurers in accordance with the commissioner’s order; as a result, those persons with claims against the facility have not been paid.

c. In its present financial condition, it is likely that the facility would be declared financially impaired or insolvent under the provisions of P.L.1975, c.113 (C. 17:30C-1 et seq.). Because of the interim nature of the facility, however, initiating proceedings under that law is not in the best interests of the facility’s policyholders and other claimants under the policies written by it. Because of this, and given the cost of pursuing protracted litigation with member insurers over this issue, it is deemed to be in the public interest to find a means of providing the necessary money to pay the claims now pending against the facility in the most expeditious manner possible.

d. Moreover, to safeguard the interests of the policyholders and the public, it is deemed to be in the public interest for the Commissioner of Insurance to take immediate possession of the property and assets of the facility, in accordance with the provisions of this act, and for the commissioner to evaluate and monitor the performance of those entities charged with paying claims on the facility’s behalf and to make such adjustments to any executory contracts of the facility as he believes are in the best interest of the policyholders and the public, including the modification or termination of such contracts or consolidation of servicing operations.

L.1994,c.57,s.2.