According to a spokesperson for the company's Garden State operation in Parsippany, N.J., State Farm Indemnity Company, notices to the affected policyholders should be out by the end of this month to notify the December non-renewals.

The plan is to non-renew 4,000 drivers each month over two years on a random basis, he said.

Richard Stokes, the New Jersey representative for the Alliance of American Insurers, said the department appeared to be working hard at "grappling" with the issue of how to equitably require companies to take in the affected policyholders.

A departmental paper given to insurers said the order will require companies by a certain date to have a person in place who is responsible for compliance with the Market Assistance Plan.

Within five days of getting an application from a State Farm insured, companies would be required to send out an application form and buyers' guide, and within 10 days they would have to "make at least one other attempt to make meaningful contact with the prospect via mail, e-mail fax or phone."

According to the proposal, "upon achieving their equitable share," companies could apply for a directive excluding them from the MAP.

The proposal also mentioned New Jersey's existing Urban Enterprise Zone program--a quota system designed to counter redlining, or avoidance of inner city business. Under UEZ, insurers doing business in the state must have the same market share in cities as suburban and rural areas.

State Farm applications from persons in the 27 cities in the UEZs will be distributed "as directed by the Department of Banking and Insurance."

New Jersey's arrangement in June for State Farm to drop a large number of policyholders came after the insurer had applied to leave the state entirely citing heavy losses.

A letter going out with non-renewals from Commissioner Holly C. Bakke, who heads the DOBI, urges policyholders to "shop for other insurance coverage as soon as possible." An 800-number is given for insureds to call if they have trouble finding coverage.

A Coverage Verification Form with the insurance history of the State Farm Policyholder will go out to with the company's non-renewal notice.