New Jersey Surplus Lines Insurance Guaranty Fund
The New Jersey Surplus Lines Insurance Guaranty Fund (“Fund”) was established in 1984 pursuant to the
New Jersey Surplus Lines Insurance Guaranty Fund Act, N.J.S.A. 17:22-6.70 et seq. (“Fund Act”). The Fund
provides a safety net for policyholders and claimants of insolvent surplus lines companies by providing
statutory benefits to insureds and claimants of such insolvent companies. The Fund Act requires all
eligible, nonadmitted insurers to be members of the Fund.
By statute, surplus lines insurers are required to make an initial one time payment of $25,000 into the
Fund. In addition, the Fund Act authorizes a surcharge on surplus policy premiums. The surcharge has been
inactive since 1993 but is subject to possible reenactment.
In 2002, the Fund Act was amended to limit the application of the Fund to specific types of “covered
claims”. On or after June 25, 2002, the Fund’s coverage was reduced and only provides coverage for eligible
surplus lines insurers issuing medical malpractice liability insurance or property insurance covering owner
occupied dwellings of less than four dwelling units.