New Jersey's insurance industry has asked the state to consider issuing more than $4 billion of bonds to eliminate deficits generated by a notoriously underfunded auto insurance system.

In a proposal that received decidedly tepid reaction this week from Gov. Jim Florio, the American Insurance Association said the bonds could be repaid through a 5% surcharge on drivers' auto insurance premius. David Snyder, senior counsel to the nationwide industry trade group, said the surcharge would raise about $10 billion over 20 years to repay principal and interest on the bonds.

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