Matter of Market Transition Facility

In Matter of Market Transition Facility, 252 N.J. Super. 260, 263-266, 599 A.2d 906 (App.Div.1991), certif. denied, 127 N.J. 565, 606 A.2d 376 (1992), it became increasingly clear that the rate structure under FAIRA, intended to keep the cost of automobile insurance reasonably affordable, was, at the same time, creating a "reasonable rate of return" problem for the insurers. Moreover the MTF was not operating, and could not operate, at its required break-even point. The Court ruled that the Commissioner had no authority to set MTF rates at a loss-producing level. Id. at 275-276, 599 A.2d 906. The Court also held that the Commissioner was obliged to take appropriate action since he "is faced not only with the possibility of creating tremendous MTF losses by permitting operations at insufficient rates, but also the possibility of creating additional losses for private insurers on voluntary business written at MTF rates for depopulated risks." Id. at 277, 599 A.2d 906.