Nationwide had abandoned the state’s auto insurance market in 1981, joining an exodus of other automakers who complained the state had overregulated the market and made it too difficult to do business.
“We’re very pleased to be a part of the New Jersey marketplace again,” said Amy Shore, senior vice president of field operations at Nationwide. “We’re excited about the opportunity, and it’s really been created by the improving regulatory environment there in New Jersey.”
The reformed, competitive market has continued to grow more robust for more than a decade with new entrants and returnees after years of overregulation lowered the number of auto insurers and left drivers with minimal options for coverage.
The improved environment is evidenced by Nationwide, based in Ohio, being the latest of several companies to embrace the marketplace since reform legislation was enacted in 2003.
New Jersey Manufacturers, which was an insurance industry linchpin during the crisis, also has experienced significant success in the market and is now selling its banking arm, which was established in 1999, to refocus its resources on insurance, according to Pat Breslin, director of legislative affairs at NJM.
Before the Automobile Insurance Competition and Choice Act was signed into law by then-Gov. James McGreevey in 2003, the state was forced into an auto insurance availability crisis after dozens of carriers stopped writing auto policies, blaming the way the laws were written.
Insurance companies were forced to return excess profits to policyholders if profits exceeded 6 percent and the Department of Banking and Insurance did not respond quickly to requests for rate changes, making it difficult for carriers to stay competitive.
Insurers also were required to take all drivers regardless of their driving records and were barred from giving customers coverage options with different price quotes.
Insurers that had left the state or were in the process of leaving stopped writing new policies and dropped their drivers.