Market Availability & Affordability

Catastrophe Funds

The catastrophic hurricanes during the 2005 season have had a severe negative impact on the property insurance market in the Gulf States region, with the potential impact here in New York yet to be seen. It has also focused attention on the cumulative property exposures of insurance companies along the coastline and coverage issues for consumers. The Independent Insurance Agents & Brokers of New York is extremely concerned about consumer impacts but also with the ability of insurance companies to manage these catastrophes. IIABNY continues to hear from its members about underwriting restrictions, particularly in coastal areas.

There have been discussions in New York and countrywide about legislative initiatives to develop catastrophe funds to reduce industry exposure in various catastrophe situations, not just limited to hurricanes. IIABNY will be an aggressive participant in discussions about development of this type of mechanism in New York.

Homeowners Insurance Windstorm Deductibles

It is now common practice for insurance companies to include separate windstorm deductibles on homeowners’ policies in coastal areas. These deductibles can be “flat” (specific dollar amounts) or percentage deductibles (a percentage of the building value). The trigger point for these deductibles varies among companies and can be based on wind speed, category of storm, and other factors.

IIABNY continues to be concerned about the lack of market standardization of the triggers for these deductibles. We also realize that if too many demands are put on companies writing homeowners insurance it could lead to reduced underwriting capacity. We feel strongly that action must be taken to standardize the triggers for these deductibles to avert the consequences that will occur the next time a major storm hits Long Island.

Action Needed

Standardization of windstorm deductibles and triggers are critical to consumer protection in the event of a catastrophic storm affecting New York’s coastal region. We prefer this standardization be accomplished through the voluntary efforts of insurers in New York State, but would support regulatory enforcement if necessary.

New York Property Insurance Underwriting Association (NYPIUA)

NYPIUA has become an important part of New York’s insurance market, filling the void when coverage is not available in the voluntary market. During recent legislative sessions NYPIUA authorization has expired for various lengths of time. This situation creates serious problems for consumers and their agents. Without a functioning residual market for these policies, serious coverage gaps and uncertainty develop for property owners who need new or renewal coverage. NYPIUA could also be used to address other market deficiencies if it were a permanent mechanism.

Action Needed

Our members believe that the New York Property Insurance Underwriting Association (NYPIUA) should be made permanent. NYPIUA provides property insurance for those consumers who cannot obtain it in the voluntary

Legislative Position Paper 2006 Session

Broker & Agent Disclosure

Auto Insurance Reform

Health Insurance Reform

Market Availability & Affordability

Workers Compensation Reform

Law Labor 240 / 241 Reform