"New Jersey's department of insurance and its [state] legislature decided to micro-manage its business for years," said Mr. Joseph in a telephone interview with National Underwriter. "I think what we can see now is maybe the beginning of less micro-managing of the business to encourage companies to come into that state.

"We think both the commissioner and the governor of New Jersey realized they have a serious problem and needed to find a way to make New Jersey a place where companies want to do business as opposed to a place where companies can't wait to leave," he suggested. "We think they have reached a turning point."

"We hope this is the beginning of a more competitive climate in New Jersey," said Mr. Joseph.

"New Jersey is a state with a lot of automobiles, and that is our business," he continued. "When we started here in California, we had the same thing. A lot of companies shied away from California. And some of them shy away right now. We've been through that."

He said his company has had a history of going into states where others fear to tread: taking up homeowners coverage when State Farm left California; and going into Florida to sell auto policies in 1998, when others were leaving. The company was formed in California in 1961 and began underwriting in that market in 1962. It writes over $2 billion in premium annually.

Mercury General, he said, does not have a problem being in states where there is micro-management of carriers, just as long as they understand what is going on in the state.

"We are specialists in automobile," he said. "Our approach is to learn the statute and the regulations very carefully and to find ways to live within them. We have a reputation among independent agents that when we come to a state, we come to stay."

"We never entered a state where we could not overcome or understand what the statutes were," he added. "We look at New Jersey as a challenge, a big challenge. We are a company that is not uncomfortable with challenge."

Mr. Joseph said that the company's application is nearly complete and hoped it would begin doing business in New Jersey some time in August.

He said the company's practice is to carefully screen the agents it decides to work with and have them go through a training period of at least three weeks before beginning to sell insurance.

In the company's second-quarter financial release yesterday, the company said it plans to appoint 50 independent agents to initially sell policies in New Jersey.

Eventually, Mr. Joseph said, the company will sell other policies in the state because the agents and customers demand it. He said it is a matter of necessity, almost, especially in homeowners because most customers like to have all their property-casualty policies with one agent and agents like to have it all with one company.

Of the eight states Mercury General writes in, it does not write homeowners insurance in Texas, because "the situation is not clear there," he said.

"Every time we go into a new state it's a challenge. It's interesting, it's a challenge, and we look forward to it," said Mr. Joseph about New Jersey. "We watch the results carefully and look forward to the time when we make a profit. You almost never make a profit in the first year in a new state. But we look forward to getting the agent's license and getting the business flowing. It's always exciting going into a new state."