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|Source:||A.M. Best Company, Inc.|
Had it become law, A.B. 1471 would have required taxicab companies doing business in the state to buy their primary liability coverage from insurers that are of the members of the
Christie rejected the bill after he determined it may violate federal anti-discrimination laws by being unfairly prejudicial against risk retention groups.
RRGs are specially created captive insurance companies with multiple owners that operate under federal law. Under the 1986 federal statute that allowed for the creation of RRGs, those companies cannot be members of state guaranty associations, meaning that had A.B. 1471 been signed into law, RRGs would have been effectively ruled out as a coverage source for
In a statement accompanying his veto, Christie commended lawmakers for their efforts "modernize" the state's taxicab laws. As examples of some of its positive aspects, Christie highlighted provisions in A.B. 1471 that would have created a more competitive process in the award of cab licenses by municipalities He also pointed to increased consumer protection measures such as increased mandatory insurance coverage requirements and a requirement that taxicab operators undergo a state criminal history background check.
$35,000 mandatory insurance coverage. Christie said that after reviewing the federal Liability Risk Retention Act and additional case law, he determined that it "may be discriminatory under federal law, and thus unenforceable."
Christie recommended the bill be amended to include a sentence that would allow RRGs registered in
Christie's veto was hailed as a positive move by
"We are very pleased with the outcome of this, which is to say we believe it is the correct one," Myers said. "In our letter, we laid out what we thought the law was, and the governor's veto statement tracks very closely with what we said in our letter."
That law was modeled after the tax structure and capital and surplus requirements in place in