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Regulator says department blocks excessive auto and homeowners rate hikes, uses actuarial review
Summary
Commissioner Justin Zimmerman told senators the department has rejected over $1 billion in requested rate increases in recent years and uses a robust actuarial review process to protect consumers while balancing insurer solvency.
Senator Paul Sarlo and several committee members asked the Department of Banking and Insurance on May 1 how the agency monitors rising auto insurance costs and whether it can prevent insurers from raising rates in anticipation of higher vehicle and repair costs.
Commissioner Justin Zimmerman said the department treats rate review as a consumer-protection function and requires carriers to justify requested increases with actuarial support. “The department, as I mentioned, really views this to ensure that we are not that consumers are not paying more than is necessary in order to pay claims,” Zimmerman said. He added that the department has blocked “over a billion dollars” in proposed auto and homeowners rate increases over the last several years.
Zimmerman outlined factors carriers cite when requesting increases—inflationary trends, reinsurance costs, supply-chain pressures, higher new and used car prices, repair costs, and increases in severe crashes—and said regulators must balance consumer protection with the solvency of insurers.
Senators asked whether the department has done everything it can to keep rates down. Zimmerman reiterated the department’s rate-review process and said the agency often challenges insurer requests and reduces requested increases. He also told the committee that national trends influence state markets and that New Jersey is not insulated from those pressures.
The exchange between senators and Zimmerman underscores ongoing legislative interest in auto rates and insurer conduct; lawmakers pressed for continued oversight and department transparency on rate review outcomes.
