Her department is looking to strike a balance between consumer protections and attracting companies to the state.

Ms. Bakke's boss, Gov. James E. McGreevey, on Tuesday in his State of the State message, outlined a plan to revamp New Jersey's auto insurance system, with an emphasis on consumer protection, while attempting to address a serious problem on the business side.

Ms. Bakke, said his speech was well received by the carrier community because the companies feel the "governor understands the problem and that it has to be solved."

The difficulty, she said, is that there are not enough companies in the state to underwrite, and until the deficit of carriers is corrected, the state's policyholders will continue to have difficulty getting the insurance they need.

"The key message to the world is that this is a governor who recognizes the problem and the need to confront it," she said.

Currently, there is a "very strong industry bill" receiving bipartisan support in the state legislature to address this problem, but it lacks consumer protections, Ms. Bakke said.

The governor, she said, has made it clear he will work with companies on this reform legislation, but there needs to be consumer protection within the bill.

One thing that must remain, said Ms. Bakke, is that the department continues its role determining appropriate and adequate auto premium rates for companies and the insureds. Notification by carriers to consumers when a rate adjustment is being sought, and making sure consumers play an active role in their choice of coverage are also some of the hallmarks of the administration's proposal, she noted.

Agents, she said, would play a critical role in increasing that discussion. They will present the policy review to consumers.

Among some of "the tools" included among department proposals to protect auto insurance purchasers is a requirement that insurers offer three coverage scenarios so consumers can compare options; a requirement that independent agents post an Auto Insurance Bill of Rights; and creation of a state Auto Insurance Report Card rating of insurers.

The administration is working with an industry group representing a cross section of interests, including agents, to develop manageable solutions for these proposals, Ms. Bakke explained.

While the reform work proceeds, the department will continue to enforce current laws, Ms. Bakke said. Recently, the department did an undercover investigation, which uncovered carrier non-compliance with the Basic Policy program. The program sets a low cost auto policy for consumers that investigators found was not being honored by some agents and carriers.

"We will use all the regulatory tools available to the department through this transition period to protect policyholders," Ms. Bakke promised.

Looking to the future, Ms. Bakke said she hoped by next year existing companies in the state would introduce more capital and, in turn, devote more agents to the market, especially in urban areas. She would also like to see rating agencies develop a favorable view of New Jersey that would encourage more insurance capital in the state and attract more carriers.

With those two things in place, it would help us achieve our most important goal--that auto insurance in New Jersey is affordable and acceptable for all policyholders," Ms. Bakke said.