Andrew Gideon wrote:

Is this related to the fact that we've so much trouble getting/keeping
companies to do insurance business here? Or is this unrelated?

No, and things have improved in that regard since Florio was voted out. There were
two main reasons for the problems there.

One - because it was argued that premiums paid by NJ drivers somehow supported lower
premiums elsewhere in the country, only New Jersey companies could write auto
insurance here. That led to a number of national companies spinning off subsidiaries
(eg. Aetna wrote policies as Aetna of New Jersey). It also made it easier for various
fat cats to play protection games with the companies, but corruption is hard to
prove. It also turned out that, to some extent, premiums charged elsewhere in the
U.S. were supporting lower premiums in NJ simply by expanding the risk base. This
restriction was eliminated (or at least relaxed) in the Whitman administration, and I
now have insurance with a Delaware branch of AIG.

Two - because it was argued that unfairly high premiums were being charged to allow
companies to make more money in other investments, the State required that the
majority of the premiums be kept as liquid assets to pay claims. As it turns out, the
profit on investments (when there is profit) subsidizes premiums and keeps them lower
than they otherwise would be. Forcing a company to pay claims completely out of
premiums increased the premiums. When Florio put caps on rates, some companies just
gave up. I do not know what has changed in those regulations, but they couldn't have
kept it like that and allow out-of-state companies into the market, so I believe it's
been changed.

One thing Florio did that helped keep insurance companies from leaving was his "bad
driver" measures. Basically, if you make a claim on your auto insurance, this will
result in surcharges by the State, most of which are returned to your insurance
company. Own a 5 year old car, hit some ice and wrap it around a tree, and that
accident will result in surcharges over the next three years that will approximately
equal the settlement you get from your collision insurance. Another measure involves
traffic tickets. Pick up a few tickets, and that will result in surcharges that go
into a pool to underwrite insurance for people who would otherwise find it hard to
get a policy.

George Patterson
If a man gets into a fight 3,000 miles away from home, he *had* to have
been looking for it.