PLIGA Surcharge
In June 2003, the Governor signed into law 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 was also designed to achieve efficiencies by consolidating claims handling functions. To that end, the Act transferred responsibility for the Unsatisfied Claim and Judgment Fund (UCJF) and the New Jersey Automobile Full Insurance Underwriting Association/Market Transition Facility (NJAFIUA/MTF) run-off to the New Jersey Property-Liability Insurance Guaranty Association (PLIGA). Due to these additional responsibilities and increase in insolvency activity, NJPLIGA raised its assessment of New Jersey carriers, resulting in an increase of policy surcharges.
In past years, the costs associated with some of these functions were built into the insurance policy rates consumers paid. Now, they are presented in a more transparent fashion - on the auto insurance bill as part of PLIGA's surcharges. We fully expect the surcharges to decrease over time, as cost savings have already been achieved through increased efficiencies.
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