TRENTON, N.J., November 28 – The New Jersey Insurance Council, representing companies writing 90 percent of the car insurance business in the state, is opposing legislation that would prevent businesses from having car insurance policies with lower uninsured or underinsured motorist coverage than offered in personal auto insurance policies.

Magdalena Padilla, president of the council, said the measure would increase commercial policy premiums as well as impose an unnecessary mandate on the private sector that is not helpful to a sound economy.

The measure, S1666, was released by the Senate Commerce Committee for future vote by the full Senate.

Padilla said businesses should be allowed to use their discretion as to who should be a named insured under their commercial policies. She added that to say that the bill presents merely an underwriting issue misses the point.

The proposal deals with the step-down provisions in motor vehicle policies for corporate or business entities that now give lower uninsured or underinsured motorist coverage for employees.

This practice has been upheld by the New Jersey Supreme Court in its ruling in Pinto v. New Jersey Manufacturers Insurance Company last year. The court found that such coverage for employees of a business that are not individually named on the policy is valid and enforceable.

The sponsor of the bill, Senator Nicholas Scutari (D-Union County), noted that the courts ruling allows an employees coverage under an employers business motor vehicle insurance policy to be limited to the lower limits of uninsured or underinsured motorist coverage, even in situations in which the employee is injured in a covered vehicle in a work related accident.

Scutari said his legislation would reverse the Pinto decision by prohibiting step-down provisions in policies.

Further, he said, the bill provides that a policy that names a corporate or business entity as a named insured shall be deemed to provide the maximum uninsured or underinsured motorist coverage available under the policy to any individual employed by the company, regardless of whether the individual is an additional named insured or a named insured, or is covered under any other policy with uninsured or underinsured motorist coverage.