WHAT THIS BILL REGULATES · 1 REQUIREMENT TYPE
How Is This Bill Enforced
Verbatim statutory text on the left; plain-language analysis and a per-section checklist on the right. Numbered markers cross-link to the matching checklist row.
(a) 1 An automobile insurerAutomobile insurerNot formally defined in the bill; used throughout to refer to an insurer issuing automobile insurance policies that uses an automated or predictive underwriting system.Section 1 using an automated or predictive underwriting systemAutomated or predictive underwriting system"automated or predictive underwriting system" means a computer-generated process that is used to evaluate the risk of a policyholder and determine an insurance rate. An automated or predictive underwriting system may include, but is not limited to, the use of robotic process automation, artificial intelligence, or other specialized technology in its underwriting process.Section 1(b) shall annually provide documentation and analysis to the Department of Banking and Insurance to demonstrate that there is no discriminatory outcome in the pricing on the basis of race, ethnicity, sexual orientation, or religion, that is determined by the use of the insurer's automated or predictive underwriting systemAutomated or predictive underwriting system"automated or predictive underwriting system" means a computer-generated process that is used to evaluate the risk of a policyholder and determine an insurance rate. An automated or predictive underwriting system may include, but is not limited to, the use of robotic process automation, artificial intelligence, or other specialized technology in its underwriting process.Section 1(b). Additionally, an insurer shall demonstrate to the commissioner that each pricing segment is balanced and not disproportionate to the overall policyholder population.
(b) As used in this act, "automated or predictive underwriting systemAutomated or predictive underwriting system"automated or predictive underwriting system" means a computer-generated process that is used to evaluate the risk of a policyholder and determine an insurance rate. An automated or predictive underwriting system may include, but is not limited to, the use of robotic process automation, artificial intelligence, or other specialized technology in its underwriting process.Section 1(b)" means a computer-generated process that is used to evaluate the risk of a policyholder and determine an insurance rate. An automated or predictive underwriting systemAutomated or predictive underwriting system"automated or predictive underwriting system" means a computer-generated process that is used to evaluate the risk of a policyholder and determine an insurance rate. An automated or predictive underwriting system may include, but is not limited to, the use of robotic process automation, artificial intelligence, or other specialized technology in its underwriting process.Section 1(b) may include, but is not limited to, the use of robotic process automation, artificial intelligence, or other specialized technology in its underwriting process.
Section 1 establishes the bill's core substantive obligation: automobile insurers using automated or predictive underwriting systems must annually submit documentation and analysis to the Department of Banking and Insurance demonstrating that their pricing produces no discriminatory outcomes on the basis of race, ethnicity, sexual orientation, or religion. Insurers must also demonstrate that each pricing segment is balanced and not disproportionate to the overall policyholder population. This is a proactive annual certification obligation — insurers cannot satisfy it by waiting for a regulatory request.
The section also defines the covered system broadly as any computer-generated process used to evaluate policyholder risk and determine insurance rates, explicitly encompassing robotic process automation, artificial intelligence, and other specialized technology.
The Commissioner of Banking and Insurance shall adopt rules and regulations pursuant to the "Administrative procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), to effectuate the purposes of this act.
Section 2 directs the Commissioner of Banking and Insurance to adopt rules and regulations under the Administrative Procedure Act to implement the bill. This is a standard delegation of rulemaking authority and creates no independent compliance obligation on insurers.
This act shall take effect on the first day of the sixth month next following enactment and shall apply to automobile insurance policies initiated or renewed on or after that date. The Commissioner of Banking and Insurance may take any anticipatory administrative action in advance as shall be necessary for the implementation of this act.
Section 3 sets the effective date at the first day of the sixth month following enactment and limits application to automobile insurance policies initiated or renewed on or after that date. The Commissioner may take anticipatory administrative action as necessary for implementation. This is an operative-date provision with no independent compliance obligation.