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Cooper Hospital University Medical Center v. Prudential Insurance Co.6/27/2005
cident while a covered vehicle is used or operated here. The coverages that New Jersey policies are required to provide are: (1) liability insurance in the minimum amounts of $15,000 per person and $30,000 per accident for bodily injury and $5,000 per accident in property damage as set forth in N.J.S.A. 39:6A-3 and 39:6B-1; (2) uninsured motorist coverage in the same minimum amounts, as required by N.J.S.A. 17:28-1.1(a); and (3) minimum "standard policy" PIP benefits, as required by N.J.S.A. 39:6A-4.
Prior to its amendment in 1998, the deemer statute applied to out-of-state insurance companies that were authorized to engage in the auto insurance business in New Jersey, and included an "affiliate" clause that extended the statute's application to insurance companies that were "controlling or controlled by, or under common control by, or with, an insurer authorized to transact or, transacting insurance business" in New Jersey. N.J.S.A. 17:28-1.4, L. 1988, c. 119, § 1. In other words, the pre-amendment deemer statute applied both to insurance companies authorized to transact auto insurance business in New Jersey and to insurance companies not so authorized, but who controlled or were controlled by an insurance company that was conducting general insurance business in New Jersey. In such cases, the qualifying insurance company was required to provide PIP, liability, and UM coverage to nonNew Jersey residents covered by the policy as well as to New Jersey residents. Thus, " nder the original statute, non-New Jersey residents could collect New Jersey PIP benefits [and other mandated New Jersey coverage] from any insurer that was included within the deemer statute." Gov't Employees Ins. Co. v. Allstate Ins. Co., 358 N.J. Super. 555, 566 (App. Div. 2003) (GEICO); see also Adams v. Keystone Ins. Co., 264 N.J. Super. 367, 371 (App. Div. 1993) (Delaware resident injured in New Jersey entitled to recover PIP benefits, where insurer transacted business in New Jersey). Indeed, Prudential has no dispute with this interpretation of the pre-amendment statute.
The 1998 amendment effected a change in the "affiliate" clause by creating an entirely new section requiring only PIP benefits coverage and then only for New Jersey residents if "the controlling or affiliated insurer is not transacting automobile or motor vehicle insurance business in New Jersey." N.J.S.A. 17:28-1.4, L. 1997, c. 436, § 1. In contrast, the original text followed the new section and was left virtually intact save for the addition of the words "automobile or motor vehicle," which modify and, therefore, limit the type of affiliated insurance businesses with the broader obligation to provide New Jersey insurance benefit coverages to both in-state and out-of-state residents in their out-of-state policies. Thus, by adding the amendment to the original text, the Legislature created two classifications:
The amendment, included within the underlined first sentence . . . requires the controlling or affiliated insurer to be authorized to transact any insurance business in this State, not necessarily motor vehicle or automobile business. The original portion of the statute, the second sentence . . . requires that the controlling or affiliated insurer be authorized to transact not any insurance business, but motor vehicle or automobile insurance business in this State. [GEICO, supra, 358 N.J. Super. at 564-65.]
The statutory distinction is thus drawn between controlling or affiliated insurers who are authorized to transact any "insurance business in this State" and those that are authorized to transact "automobile or motor vehicle insurance business in this State." "Only the latter insurers must provide in out-of-state policies li
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