Key Takeaways
- The New Jersey Department of Banking and Insurance (DOBI) regulates all P&C insurance activities under New Jersey insurance law
- The Commissioner of Banking and Insurance is appointed by the Governor with Senate confirmation
- DOBI handles licensing, rate review, market conduct examinations, and consumer complaints for P&C insurance
- New Jersey uses a prior approval system for most P&C insurance rates
- DOBI enforces the New Jersey Insurance Trade Practices Act and Unfair Claims Settlement Practices Act
Department of Banking and Insurance (DOBI)
Important: This study guide covers New Jersey state-specific Property & Casualty insurance content only. You should complete the national Property & Casualty exam preparation first, as it covers the foundational insurance concepts tested on your exam.
The New Jersey Department of Banking and Insurance (DOBI) is the state agency responsible for regulating the Property & Casualty insurance industry in New Jersey.
The Commissioner of Banking and Insurance
The Commissioner is:
- Appointed by the Governor with Senate confirmation
- Serves at the pleasure of the Governor
- Responsible for enforcing New Jersey insurance statutes
- Authorized to adopt regulations, review rates, investigate violations, and discipline licensees
Commissioner Powers for P&C Insurance
| Power | Description |
|---|---|
| Licensing | Issue, suspend, and revoke producer licenses |
| Rate Review | Approve or disapprove P&C insurance rates |
| Market Conduct | Examine insurer business practices |
| Enforcement | Investigate and prosecute violations |
| Consumer Protection | Handle complaints and protect policyholders |
| Rulemaking | Adopt regulations interpreting insurance laws |
Rate Regulation
New Jersey uses a prior approval system for most P&C rates:
Key Provisions
- Prior Approval: Most P&C rates must be approved by DOBI before use
- Rate Filing: Insurers must file rates with actuarial justification
- Rate Standards: Rates must not be excessive, inadequate, or unfairly discriminatory
- Deemer Provision: If DOBI doesn't act within specified time, rates may be deemed approved
Rate Filing Requirements
| Line of Insurance | Approval Requirement |
|---|---|
| Personal Auto | Prior approval |
| Homeowners | Prior approval |
| Workers' Compensation | Prior approval |
| Commercial Lines | Prior approval (with some exceptions) |
Exam Tip: Remember that New Jersey's Commissioner is appointed, not elected. This is frequently tested.
DOBI Organization
DOBI operates through several divisions for P&C insurance:
- Office of Consumer Protection Services - Handles consumer complaints
- Licensing Services - Processes producer licenses
- Life and Health, Property and Casualty - Reviews rate filings
- Enforcement and Fraud Prevention - Investigates violations
- Office of the Ombudsman - Assists consumers with insurance issues
How is the New Jersey Commissioner of Banking and Insurance selected?
What rate regulation system does New Jersey use for most P&C insurance?