Gov. Christine Todd Whitman
last week signed legislation
authorizing the state's Economic
Development Authority to issue up to
$750 million of bonds to help
eliminate a deficit in the state's high-risk
auto insurance pool.
The bonds will be backed by
revenues generated by surcharges on bad
drivers in the state who have
accumulated six or more points on their
licenses.
Under the agreement the state
worked out with New Jersey
insurance companies, which had been
fighting attempts to make the
industry pay off the pool's $1.3 billion
deficit, insures in the state will pay
about $761 million of the cost of the
deficit.
Under the terms of the agreement,
the insurance industry also agreed to
drop a lawsuit against the state that
companies filed to force the state to
pay the entire deficit.
The companies argued that it was
the insurance policies of former
Gov. Jim Florio that created the
deficit, and so the industry should not
be forced to pay the price.
The bond sale is expected next
month.
