IIABNY Scores Legislative Victory

The Independent Insurance Agents & Brokers of New York Inc. is hailing recent legislation it helped develop as a major victory for producers, homeowners and insurers alike, especially those living and working in the state’s coastal areas.

Both the New York State Assembly and Senate have agreed to the bill (A. 11693, S. 8624), and its passage is expected by the end of this legislative session, slated for June 23.

NYPIUA made permanent--Permanence of the New York Property Insurance Underwriting Association is the most notable aspect of this legislation. NYPIUA is the state’s residual market mechanism. For years, IIABNY has fought to obtain permanency for NYPIUA, only to see it used as a political bargaining chip, while given one-year extensions. IIABNY saw a real opportunity to win permanency this year due in part to the appointment of the new Chairman of the Assembly Insurance Committee, Joseph Morelle (D-Monroe County). IIABNY began discussions early on in the legislative session with Morelle and Senate Insurance Committee Chairman Sen. James Seward (R-Oneonta), working diligently with both houses to secure NYPIUA permanency this year.

NYPIUA authorized to write broad form coverage--To address the coverage deficiencies of a current bare bones NYPIUA policy, this bill would allow NYPIUA to offer broad form coverage to policyholders throughout the state. The more comprehensive coverage will help producers to provide better coverage to their customers. When used in conjunction with an HO4—the wrap around policy typically offered by most insurers—a producer could provide coverage that does not have the coverage gaps that currently exist with the basic NYPIUA dwelling form. NYPIUA’s authorization would include offering broad form coverage for a period of five years under a study program. After five years, the Superintendent of the New York State Insurance Department would report to the legislature on the success of the program and make recommendations on continuing the program.

NYPIUA incentive program--NYPIUA would establish an incentive program to encourage more companies to write homeowners insurance and wrap around policies in the coastal areas.

C-MAP program--The bill codifies C-MAP, established by the insurance department in the mid 1990’s. It also establishes a C-MAP Agents Advisory Council consisting of nine coastal insurance producer members. The Advisory Council will provide recommendations on the C-MAP program to NYPIUA.

Homeowners’ panel made permanent--The temporary panel on homeowners insurance, also created in the mid 1990’s, will be made permanent and would study and report on homeowners insurance issues on a yearly basis. The panel would include insurance producer members.

Flex rating restored--IIABNY’s years of advocacy for the return to flexible rating for automobile insurance has paid off. The bill includes a new flexible rating system for automobile insurance. Insurers would be able to make overall rate changes of up to five percent without filing for permission from the NYSID. Passage of this legislation will allow companies to make no more than two rate increases within the percentage limitation in a 12-month period and no rate increase could be implemented until the onset of a new policy period and upon at least a 30 to 60 day notice to the policyholder.

The bill also includes three-year extensions of several laws pertaining to automobile insurance that typically sunset each year. These laws, which include nonrenewal, surcharge, and agency terminations provisions, would now expire in 2011.

“IIABNY is pleased to have worked with the insurance chairs in both houses—Senator Jim Seward and Assemblyman Joe Morelle—as well as insurance carriers to develop this legislation,” said IIABNY Chair Neal Sullvan. “We appreciate the efforts of the legislators and their staffs. We’re confident that this will have a positive impact on the insurance industry and consumers.”