The New Jersey Appellate Court’s March 4, 2002 decision to uphold the pre-certification medical guidelines of the Auto Insurance Cost Reduction Act of 1998 (AICRA) is a positive step in promoting true auto reform, according to the National Association of Independent Insurers (NAII).
AICRA established programs and protocols to eliminate unnecessary medical treatment and testing, which contributed significantly to New Jersey’s high auto insurance premiums. One of these programs was allowing insurers, subject to the New Jersey Department of Insurance and Banking approval, to include in their policies pre-certification provisions. NAII and other insurance groups came to the defense of the New Jersey Department of Insurance and Banking for its approval of pre-certification policy language authorized under the Act, after the trial attorneys, medical providers unions and certain health care providers filed a court challenge to the law.
“We are pleased that the Court once again recognized the importance of the medical cost savings features of the 1998 AICRA act. This is the second time in four years this act has been challenged in court and in both instances the Department has been ruled to be acting in accordance with the law,” Don Cleasby, assistant vice president and assistant general counsel for the NAII, said.
The pre-certification policy language allowed auto insurers, upon approval by the Department, to require injured insureds to get permission from the insurer before undergoing certain medical treatment procedures or tests. The purpose of the pre-certification process was to reduce fraud, abuse, over utilization and unnecessary medical expenses as mandated by AICRA.
“While the Appellate Court ruling represents a major victory for New Jersey insurers and consumers, the NAII feels that much more needs to be done to stabilize the state’s volatile insurance market. Over the past three years, excessive insurance regulation in New Jersey has strangled competition resulting in more than 20 auto insurance companies leaving the state,” Cleasby said.
“The NAII and several of its member companies are actively working with the Coalition for Auto Insurance Competition (CAIC), a group of concerned businesses, insurance agents, companies and trade organizations to help restore competition and choice back to the New Jersey insurance market,” Cleasby said.