| NEW JERSEY NEWS |
| Central Mutual Is Latest Insurer To Seek Withdrawal From N.J. Central Mutual Insurance Co. recently petitioned to withdraw from New Jersey’s auto market. The Department of Banking and Insurance said it approved the Van Wert, Ohio-based company’s plan to drop the 2,688 cars it covers in New Jersey during 2004. According to Best Week, the company, which has been looking for an insurer to take over its business since May 1999 without success, is paying 84 cents in claims for every $1 in premium it took in last year. Under the order, Central Mutual will drop customers as their policies come up for renewal, giving them 60 days notice that they must shop for a new insurer. Parent company Central Mutual Insurance Cos. is licensed to sell insurance through an independent insurance agency system for autos, homes and businesses in 14 other states, including New York, Massachusetts, Connecticut, Ohio, Illinois, Georgia, Indiana, Arizona, New Mexico, North Carolina, Oklahoma, Tennessee, Texas and Virginia. The insurer has more than 265,000 policyholders in the United States. Overall, more than 10,000 car owners were told in December that their auto insurers are leaving the state, according to the Coalition for Auto Insurance Competition. Currently, four of the six largest auto insurers in the United States don’t do business in New Jersey. In the past 18 months, eight insurers have announced withdrawal plans, including State Farm Indemnity Co., Merchants Insurance Group, American Financial Group Inc.,Twin City Fire Insurance Co., Harleysville-Garden State Insurance Co., Ohio Casualty of New Jersey Inc., Newark Insurance Co. and American International Insurance Inc. Three insurers have entered the New Jersey market this year, including Consumer First Insurance and Rutgers Enhanced Insurance. Two Insurers Granted Rate Hikes Encompass Group and Security Indemnity Insurance will be raising rates in 2003. According to the Star Ledger, regulators say the raises are needed to keep more insurers from shutting their doors, making it even more difficult than it already is for drivers to find coverage at all. Gov. James E. McGreevey is due to unveil a reform package soon to ease the crisis. Regulators, meanwhile, rejected double-digit requests from three others, which insure about 142,000 drivers. They also are letting one troubled insurer, Motor Club of America, raise prices for some coverage, offsetting that with cuts for other coverage. The rate changes, posted on the department Web site, call for an average 5.5 percent increase for the roughly 122,000 drivers covered by the Encompass Group. They had sought a 7 percent increase. An average 11.4 percent increase was 15 percent increase. A rise of 14.5 percent was granted for Motor Club of America’s liability insurance, which covers drivers if they are sued, and is offset by declines in collision and theft coverage. Regulators rejected a 16 percent increase sought by Chubb, a 16.9 percent increase sought by Hanover Insurance and a 74.4 percent rise sought by Merchants Insurance who says it will leave the State. Merchants covers about 8000 cars. Of 20 rate increase requests filed this year, 10 companies have won smaller increases than they wanted, eight were rejected and State Farm Indemnity won the full 5.4 percent increase it sought. |
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