46:3B-7.1 - Findings, declarations relative to new home warranties - New Jersey Statutes

46:3B-7.1.  Findings, declarations relative to new home warranties
1.The Legislature finds and declares that:

a.New Jersey provides unique protection through "The New Home Warranty and Builders' Registration Act," P.L.1977, c.467 (C.46:3B-1), which establishes a program requiring that newly constructed homes conform with certain construction and quality standards and provides buyers of new homes with insurance-backed warranty protection in the event such standards are not met;

b.In addition to authorizing warranty coverage through private insurance programs, the act requires that a new home warranty security fund be maintained by the State Treasurer and administered by the commissioner on behalf of the buyers of new homes;

c.Moneys payable to the fund are solely for the purpose of paying proven claims, providing reasonable reserves, including appropriate forms of reinsurance, and covering the costs of program administration.  Accordingly, program premiums, fees and other charges must be adequate to these purposes;

d.Since the premiums, fees and other charges assessed by the fund are solely for the protection of the buyers of new homes enrolled in the program and since such charges bear directly on the affordability of those homes, the fees should be set in an actuarially sound manner, including prudent reinsurance, with provision for the distribution of any accumulated surplus to the buyers of new homes enrolled in the fund; and

e.The purposes of the "The New Home Warranty and Builders' Registration Act" shall be furthered through the creation of a Board of Trustees to provide independent oversight over the fund on behalf of those whose homes are covered by it.

L.2001,c.147,s.1.