The Evolution of An Insurance Safety Net
New Jersey has long recognized the importance of protecting policyholders and claimants in the property and casualty insurance marketplace.
The Guaranty Association provides a safety net for claimants designed to mitigate the effects of loss on claimants and policyholders who, through no fault of their own, find themselves without coverage.
Historically, this safety net system was spread among a variety of entities. They include:
The Unsatisfied Claim and Judgment Fund (UCJF)
Established in 1952 to pay the damages of victims who were hurt in an accident with an uninsured or unidentified motorist. The payment of “excess medical benefits”, medical costs related to an auto accident in excess of $75,000, was later added to the UCJF’s mission in an effort to control medical expenses by providing a level of reinsurance for auto policies.
In June 2003, the legislature passed and the Governor signed the New Jersey Automobile Insurance Competition and Choice Act, which was designed to improve the New Jersey auto insurance market, attract more competition, and give consumers more choices in carriers and coverage. The Act also provided for improvements to the state safety net. To that end, the Act transferred responsibility for the UCJF, the JUA and the MTF to the Association.
The New Jersey Property-Liability Insurance Guaranty Association (PLIGA)
Established in 1974, PLIGA was created to pay claimants and policyholders of insolvent property-casualty companies.
New Jersey Medical Malpractice Reinsurance Association (NJMMRA)
Established in 1976 in response to a failing medical malpractice marketplace in which doctors were having difficulty finding coverage. It provided policies directly to physicians, as well as reinsurance to their insurers.
Surplus Lines Insurance Guaranty Fund (Fund)
Established in 1984 to provide a safety net for the claimants and policyholders of insolvent surplus lines companies.
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