The 96-page bill that has opposition from trial lawyers, includes provisions to phase out the "take-all-comers" rule that currently requires insurers to insure all applicants.

It would also revise the application of the 6 percent excess profits limit so that the look-back period is increased to average out seven years, rather than the present three years.

The bill also provides that an expedited procedure to secure approval of rate increases would apply to requests up to seven percent rather than the current three percent.

The measure now goes to the full Assembly for final vote. If approved, Democratic Gov. Jim McGreevey has indicated he would sign it.

Industry representatives who have pushed long and hard for the bill, which drew opposition from the Association of Trial Lawyers in New Jersey, said they were happy to see the bill move.

However they expressed concern about the committee's release of A 3531. That bill, which would need Senate as well as Assembly approval, would ease language restrictions on lawsuits for noneconomic injury, which currently require injuries to have a serious and significant impact. "This would negate that requirement," said Richard Stokes, who represents the Alliance of American Insurers, based in Downers Grove, Ill.

Among the other organizations pushing for the omnibus A2625 legislation has been the umbrella group, Coalition for Auto Insurance Competition, Newark, N.J.

John Friedman, the group's chairman, recently called it a first step toward reform and "a foundation upon which a competitive market can be built."

In the past 10 years, more than 20 auto insurers have left New Jersey by the Coalition's count.

The Insurance Council of New Jersey, after the vote, said it was pleased that committee members, Assembly leadership and the governor have worked together to forge a comprehensive bi-partisan solution to address New Jersey's automobile insurance availability crisis.

"New Jersey is one step closer to meaningful auto insurance reform that will begin to untangle decades of complicated and burdensome regulations, give consumers more choice, and encourage competition," declared John K. Tiene, president of the Insurance Council of New Jersey. "Enactment of this law is the foundation upon which a competitive market can be built."

He said he was not very concerned by the release of the A 3531 verbal threshold bill because, in his view, legislators will not support a measure that would result in lawsuit recoveries "that would increase rates 20 to 30 percent."

The Association of Trial Lawyers of America-New Jersey, however, predicted that the auto insurance reform bill would make it harder and more expensive to gain coverage.

Richard H. Wildstein, chairman of ATLA-NJ automobile insurance reparations committee, said in a statement that the measure would result in "higher premiums for everyone."

He said the state's no-fault insurance system is so complex and expensive to manage that newcomers would not be able to effectively compete with established firms.

Mr. Wildstein also predicted that the bill would allow insurance carriers to reject tens of thousands of drivers in city areas who have good driving records or force them to pay premiums double or triple the current rate.

The Council noted that five of the nation's top six auto insurance companies are not writing auto insurance policies in New Jersey. According to the Council, when insolvencies are factored in, the state has lost more than 26 auto insurance companies in the last ten years.

Mr. Tiene told the committee the bill was a "constructive framework for building a reasoned, rational and meaningful regulatory system, and moves New Jersey toward a competitive market."

State Farm Indemnity, the state's largest auto insurer, has been approved to withdraw and since September, 2002 has been non-renewing 4,000 insured vehicles a month, which will continue for 24 months or 96,000 insured vehicles.

According to the New Jersey Department of Banking & Insurance, 19 auto insurance companies writing 28 percent of all auto insurance policies in the state have finances that are so shaky they are being monitored by state regulators.

Other provisions in the auto insurance bill would create a crime of insurance fraud and allow authorities to impound vehicles being driven without insurance. It would also provide for a $365 policy for low income drivers.