New Jersey Banking and Insurance Commissioner Holly Bakke recently commended Liberty Mutual’s decision to return nearly $15 million to more than 200,000 policyholders.
Liberty Mutual’s decision brings the total amount returned to New Jersey drivers to more than $160 million. This recent trend in lowering rates to reward good drivers is reportedly proof that the revitalized market is making life better for New Jersey policyholders.
“We set out with a plan to reward good drivers with choices through a competitive auto insurance marketplace and after one year, we have exceeded expectations,” Gov. James McGreevey said. “This is just the beginning. The environment that we created through our auto insurance reforms has paved the way for future returns to more consumers.”
Liberty Mutual, the fourth largest auto insurer in New Jersey, is the latest carrier to announce a return based on special dividends and rate reductions.
“New Jersey is seeing great results,” Bakke said. “The competitive marketplace created by the reforms is benefiting drivers, feeding a growing economy, generating more employment opportunities for agents and allowing companies to expand. We anticipate this momentum to continue, further increasing consumer options and downward pressure on rates.”
Liberty Mutual Group is comprised of two companies that write auto insurance in New Jersey: Liberty Mutual Fire Insurance Company (LMFIC) and Liberty Insurance Corporation (LIC). The company plans to issue a special dividend totaling $9.3 million that will affect 180,000 long-term LMFIC policyholders who carry comprehensive and/or collision coverage. Liberty Mutual has submitted a filing with the Department to reduce their rates for 41,000 LIC policies totaling $5.6 million.
“Recent regulatory reforms to the auto insurance market have made New Jersey a far better state to do business, and we are pleased to share our results with our longtime customers who have helped contribute to our financial strength,” Louis F. Knecht, Jr., general manager of Liberty Mutual’s Mid-Atlantic region, commented. “We appreciate the diligence with which the Governor and insurance commissioner sought to improve the business climate for insurers, and the benefits are now being reaped by our customers.”
Earlier this month, Gov. McGreevey and Commissioner Bakke joined AllstateNJ officials who also announced plans to return $15 million to more than 200,000 of its policyholders.
The Governor’s auto insurance reforms have also reportedly produced the following results for New Jersey drivers over this past year:
* Mercury Insurance has entered the marketplace, the first new auto insurer in seven years; * State Farm decided to suspend its practice of dropping coverage for 4,000 New Jersey drivers per month; * More than one million policyholders have received more than $160 million back in voluntary rate reductions and special dividends; 37,000 previously uninsured drivers are now contributing more than $54 million through the Governor’s “Last Chance” program.