The problem with the New Jersey market, Mr. Stokes observed, is that, for the past three decades, it has not projected the climate of stability and certainty that is necessary to entice insurers to commit capital and other resources to the state.

The state must enact a prompt, objective and fair rate review system, Mr. Stokes argued; under current conditions, it can take up to two years for insurers to obtain rate approvals.

"This is not the proper signal to send when the objective is to expand auto insurance availability by encouraging new companies to enter the state," he said.

More than 26 auto insurers have left the state in the last ten years, six in just the last 11 months. And five of the six largest auto insurance companies in the United States no longer write business in New Jersey, according to the Insurance Council of New Jersey, which also took part in the hearing.

The group estimates that more than 740,000 vehicles will need new auto insurance coverage this year but that consumers will experience increasing difficulty finding new coverage.

Additionally, State Farm Indemnity, the state's largest auto insurer, will non-renew some 50,000 vehicles this year while the state's number of registered private passenger vehicles is expected to grow by 120,000. The group also forecasts that some 570,000 vehicles will not renew their current coverage and seek new coverage this year.

"State lawmakers and regulators must act on the Governor's plans to modernize the state's auto insurance laws to stem the tide of withdrawing carriers. Action is needed now; availability problems will only grow worse without action," said John K. Tiene, president at the Insurance Council of New Jersey in Ewing, N.J.

According to David Snyder, general counsel at the Washington, D.C.,-based American Insurance Association, New Jersey has relatively few companies writing private passenger auto insurance compared to neighboring states and those with similar demographics--such as Pennsylvania, Connecticut and Illinois.

"New Jersey lacks competition in personal auto insurance. Consumers need choices in the marketplace, and competition in the auto insurance market will ensure the lowest feasible rate levels for New Jersey motorists," said Mr. Snyder, who also testified at the hearing.