1. The Legislature finds and declares: a. There continues to be a need to improve and expand the availability of automobile insurance in certain urban geographic areas of the State. To better serve consumers' needs and stimulate competition in these areas, it is necessary to create business opportunities aimed at increasing and promoting economic activity by establishing automobile insurance urban enterprise zones (UEZs), which will provide incentives for insurers to increase their writings in these urban centers through, among other things, the appointment of urban enterprise zone agents. To achieve that goal, the Legislature further finds:
(1)That the creation of business incentives aimed at increasing and promoting economic activity in specially designated Urban Enterprise Zones has be
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1. The Legislature finds and declares: a. There continues to be a need to improve and expand the availability of automobile insurance in certain urban geographic areas of the State. To better serve consumers' needs and stimulate competition in these areas, it is necessary to create business opportunities aimed at increasing and promoting economic activity by establishing automobile insurance urban enterprise zones (UEZs), which will provide incentives for insurers to increase their writings in these urban centers through, among other things, the appointment of urban enterprise zone agents. To achieve that goal, the Legislature further finds: (1) That the creation of business incentives aimed at increasing and promoting economic activity in specially designated Urban Enterprise Zones has been effectively utilized by the State in the past; (2) That consumers located in a limited number of the State's urban centers would benefit from an increase in the number of locations at which they could secure automobile insurance; (3) That to better serve the needs of automobile insurance consumers and stimulate competition and economic activity, access to automobile insurance needs to be expanded in certain defined urban areas of the State; and (4) That the development of increased access to automobile insurance needs to be encouraged by establishing incentives for insurers to increase their writings in these urban centers through, among other things, the appointment of urban enterprise zone agents and the use of unused capacity in the assigned risk plan to provide additional accessible coverage. b. Certain aspects of the current automobile insurance system are unfair and need to be reformed. To this end, it is in the public interest to: (1) eliminate the current system of flex-rating, which guarantees insurers an increase in their rates each year regardless of need; (2) eliminate the current surcharge system based on automobile insurance eligibility points that unfairly penalizes good drivers because of recent minor traffic infractions, and provide for a system of rating tiers to provide greater flexibility in evaluating and rating risks based on factors that more accurately reflect the driver's characteristics; and (3) revise current provisions of the law that permit insurers to arbitrarily and unfairly nonrenew insureds without reason. c. It is also in the public's interest to increase efforts to fight fraud that occurs in the automobile insurance system, including: (1) toughening sanctions on insurance companies that fail to implement fraud prevention programs, and on licensed professionals and drivers who make fraudulent claims; and (2) improving efforts to educate law enforcement and the public on how to identify fraud. L.1997,c.151,s.1.