Insurance giant American International Group became the second insurance company in two weeks to file a request with New Jersey’s Insurance Department requesting permission to withdraw from the state’s automobile insurance market over the next 12 months.
Last week the state’s largest auto insurer State Farm Indemnity, which covers around 800,000 Garden State drivers filed a similar request. AIG is the state’s 6th largest auto carrier with around 200,000 policies in force.
It sited the same factors as State Farm in its request – namely that after a 15 percent rollback on premiums in 1998, requests for increases to cover rising costs had been insufficient to do so, and the company was losing money in the NJ market. Its request for a 10 percent increase is still pending with the Insurance Department.
The Associated Press quoted John Tienne, a spokesman for the Insurance Council of New Jersey as stating that AIG’s and State farm’s withdrawal requests showed that “The attempts over the last two decades to create a regulatory environment that defies the laws of economics” haven’t worked.