TRENTON, N.J., January 31 – Governor Jon Corzine signed into law, effective immediately, legislation that allows the states school districts to enter joint insurance fund programs with municipalities for life and health insurance. The new law replaces the existing law that banned such joint purchases.

The Joint Legislative Committee on Government Consolidation and Shared Services recommended the legislation during hearings held last fall on cost-saving measures for the government.

The committee explained that by removing the current prohibition, the decision would be left up to municipalities and school districts to jointly insure for health and life insurance when it makes sense from the perspective of local decision makers.

The committee statement noted that, in 1992, the Legislature authorized municipalities and school districts to participate in joint insurance funds for property damage and liability insurance, and workers compensation, but it excluded joint life and health insurance funds. The committee recommended the ban be lifted given the tremendous cost of health insurance to local governmental entities.

The new law sets the maximum risk to be retained for group term life insurance by a board of education on a self-insured basis at $5,000 per covered employee or dependent, or such greater amount as approved by the commissioners of Banking and Insurance, and Education.

The law also allows boards of education to join any joint insurance fund, not just one in which a constituent municipality of the school district participates.

The legislation was sponsored by Senator Robert Smith (D-Middlesex County), Chairman of the Committee on Government Consolidation and Shared Services.