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New Jersey taps guaranty fund to fill budget gap.

Publication: Business Insurance
Publication Date: 15-JUL-02
Format: Online - approximately 1039 words
Delivery: Immediate Online Access

Article Excerpt
TRENTON, N.J.-New Jersey lawmakers' recent transfer of $40 million from the state's surplus lines guaranty fund to its cash-strapped general fund caught many in the insurance market by surprise.

Surplus lines representatives blasted the move, calling it an inappropriate use of the fund and warning that it represents an increasing willingness on the part of states to raid insurance-related funds to shore up budgets. The state also narrowed the types of claims eligible for coverage from the fund, which is of concern to buyers.

``I'm outraged by the action of the Legislature,'' said Richard Bouhan, executive director of the National Assn. of Professional Surplus Lines Offices Ltd. in Kansas City, Mo., which represents the surplus lines industry.

In what Mr. Bouhan called ``the weekend heist,'' New Jersey lawmakers last month over a four-day period introduced and passed significant amendments to a 1984 law that created the surplus lines guaranty fund, which is the only state-sponsored...

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