Geico did not return a telephone call requesting comment and Progressive said it had no comment at this time. According to the Newark, N.J. Star-Ledger, both are having conversations with officials.

Ms. Cozzolino said that the interest by carriers not operating in the state has been sparked by a campaign New Jersey mounted to make them aware of New Jersey insurance law that was revised last year and the fact that it permits using credit records to rate customers.

"The commissioner [Holly Bakke] is diligently reaching out to carriers to let them know reform is working, and folks are sitting up and taking notice of that," she said, adding, "After 30 years of a dysfunctional marketplace, reform is working to make New Jersey a more competitive marketplace."

The effects of the reforms, Ms. Cozzolino said, are reflected in the fact that State Farm's profit picture is improving and New Jersey Manufacturers, the state's largest carrier, has reduced rates. Also, more than 1,000 new independent agents have been added to the auto insurance sales ranks. The state's drivers have seen $133 million returned to them in the form of special rebates and rate reductions.

"Everyone is amazed and pleased at how fast these reforms have taken hold," she said.

"Reports that the department is meeting with national companies are not a surprise," said Magdalena Padilla, president of the Insurance Council of New Jersey. "This is something we have heard from other companies."

She said the reforms the state instituted and the increased interest of carriers in doing business in the state has created "a confluence of good news."

While talks continue, Ms. Cozzolino said that an announcement is expected shortly that a small carrier will make an application for entry into New Jersey. As for the nationals, she said there should be some decision "one way or the other in the next few months."