P&CNJmedium
Which statement best describes the relationship between the Auto Insurance Cost Reduction Act (AICRA, 1998) and NJ private passenger auto rate regulation?
AAICRA repealed prior approval and adopted pure open competition for auto rates
BAICRA transferred auto rate-setting authority to the U.S. Department of Transportation, removing DOBI from all oversight of private passenger auto premiums and filings
CAICRA eliminated all excess profits review and freed NJ private passenger auto insurers from filing rates under the prior-approval framework
AICRA layered cost-containment measures and excess profits review onto the prior-approval framework under N.J.S.A. 17:29A-46.1 and 17:29A-5.6
Why this is the answer
AICRA (1998) did not repeal prior approval. It overlaid substantive reforms — PIP reorganization, verbal threshold options, fraud controls, and excess profits review under N.J.S.A. 17:29A-5.6 — onto the prior-approval rate framework codified at N.J.S.A. 17:29A-46.1. Federal agencies do not set NJ auto rates, and AICRA did not exempt auto from review.
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