I use to be an insurance agent in NJ and PA. There's no state fee or anything they're paying that would change your rate.

The insurance company themselves raised the rates in the state and then told you it's a 'state rate hike'. They did this to try to make it sound like somehow the state itself is to blame, instead of the company itself, which is an absolute lie.

They're trying to make you think the change is across all companies in the state. It is not. It is very much intentionally deceptive, and I would find another company. If they'll lie about that, who knows what they'll lie about when it comes time to pay your claim.