Ive been in the insurance business all my life, yet I am constantly learning. Early on during my career, I found out that insurance agents and brokers are probably the best teachers. These folks have traveled down the long road of insurance experiences, many times hitting some bumps along the way. Producers are an excellent source of information, and some have permitted me to share the following conversations:

Auto agent: Hey John, what the heck is up with this crazy New Jersey auto insurance marketplace?

JKD: What do you mean?

Auto agent: Well, just for example, 21st Century Insurance Company seems to be writing personal auto at nearly half of anyone elses premium.

JKD: Yes, Ive seen that. I am not quite sure where in the world 21st Century received their rate structure from. The policies that I reviewed appear far too low.

Auto agent: Heck, they just wrote a young lady with a $20,000 PIP payout, an accident, plus a live-in boyfriend with no license for around $500. I cant come close to that, and Im not sure Id want to!

JKD: Obviously, 21st Century did not do much underwritingor their pricing is off. 21st Century was recently acquired by AIG, so well see what AIG does with that carrier.

Auto agent: Hey, if you think that insurer doesnt do much underwriting, just look at GEICO. Theyll gladly take three cars and only one driver. The first thing I usually do is ask who drives the other cars.

JKD: Nowadays, there is less and less underwriting. Every insurer wants volume.

Auto agent: But some of those insurers will be the first to cry out underwriting fraud when the times get tough!

JKD: Thats for sure!

Auto agent: And when the marketplace turns sour, those same insurers will be referring case after case to the Office of Insurance Fraud Prosecutor (OIFP).

JKD: Well, if there is any underwriting fraud, then insurers have the right to contact the OIFP. But the real question is of intent. Intent is an important factor in determining actual fraud. That is, if an insurers underwriting and/or website and/or procedures are so sloppy as to allow underwriting woes to occur, then intent becomes diluted. Plus, that question also has to be posed to the OIFP. Stupidity isnt always fraud!

Another agent: Allstate, NJM, and GEICO did not make their UEZ quotas for urban personal auto. Whats up with that?

JKD: Allstates short around 18,000 risks and GEICOs short at least 6,000. State Farm and Liberty Mutual and a few other carriers also fell short.

Agent: But if this marketplace is soft right now, whats going to happen to our urban auto when it goes hard?

JKD: Ah, theres the rub!

Agent: But the New Jersey Department of Banking and Insurance desires to sunset the UEZ program, and then substitute a TREE.

JKD: The proposed TREE program will subsidize car insurers that actually write urban cars. It is a neat concept, but it also has flaws.

Agent: Flaws, like if no one wants to write any urban auto? Flaws, like no quota requirements? Flaws, like who sets the subsidy, and will it be too low?

JKD: I see youve been insuring urban cars for a long time!

Lobbyist: Hey John, hows the governor?

JKD: Governor Jon Corzine is doing much better. He is no longer walking with crutches, but needs a cane and a place to sit. Many cabinet meetings are occurring at Drumthwacket. Its obvious that he is still weak and recovering from his many injuries. And he appears much thinner.

Lobbyist: Our governor is the poster child for seat belts. Your insurers should use that.

JKD: Our governor constantly reminds everyone that he is a very, very lucky man. Lucky to be alive. He blames himself for his injuries and encourages everyone to buckle up.