NEW YORK LEGISLATURE ADJOURNS
WASHINGTON, DC, July 6, 2010 - New York’s legislature has completed its regular 2010 session, according to the American Insurance Association (AIA). A number of issues affecting the property-casualty insurance industry were in play this year, right up until the conclusion of the session.
“Overall, AIA is pleased with most of the legislative outcomes affecting our industry in New York this year,” said Gary Henning, AIA assistant vice president, Northeast Region. “We were successful in preventing a number of bad bills from advancing to the governor's desk, including bills dealing with the restriction of carriers' ability to underwrite homeowners' insurance, bills that would make New York's civil justice system even worse, and adverse workers’ compensation legislation.”
On the positive side, the state Senate passed a commercial lines modernization bill, S.7220-A, which would exempt policies for "large commercial insured(s)" from rate and form filing requirements. The Assembly companion legislation (A.10636-A) advanced to the Assembly Rules Committee, the last committee before that House's calendar. AIA will continue to press for this legislation when the Assembly reconvenes either later this summer or this fall.
“The commercial lines modernization bill was a top priority for AIA and its member companies,” said Henning. "If enacted, this legislation would allow insurers to respond more quickly to the needs of NY businesses, thus allowing them to be more competitive and employ more NY workers. We are pleased with the Senate’s decision to approve the bill and are looking forward to working with the Assembly to build upon this progress.”
Another priority issue for AIA has been an industry-wide effort to reform New York’s no-fault auto system. No-fault claim costs in New York have increased by 58 percent since 2004, and no-fault fraud and abuse in the state is costing insurers and drivers more than $200 million per year. Legislators dedicated collective attention to this issue this session, but ultimately were unable to produce cost-saving legislation.
“We are encouraged by the legislature’s attention to this important issue, but disappointed that comprehensive legislation reforming the no-fault system in New York was not enacted. AIA will continue to work with the legislators on reforms that will take costs out of the system and save policyholders money,” said Henning.
Unfortunately, the legislature passed a bill (S.1700-B/A.1953-B) that would raise the accident surcharge threshold from $1000 to $2000. AIA opposed this legislation but was able to secure amendments that prevented the bill from overturning the whole merit rating system currently in place through Insurance Department regulations. This legislation still has to be delivered to the governor for his consideration.
“We were disappointed that the legislature decided to approve this unnecessary bill, despite objections from the auto insurance industry,” said Henning. “While we were pleased that legislators included amendments to the bill keeping the merit rating system intact, the accident reporting threshold was appropriate at the current level, and changing it was unwarranted.”
“The 2010 legislative session in New York was, in many ways, successful for the property-casualty insurance industry not because of what bills passed, but because of what bills didn’t pass,” said Henning. “Going forward, AIA will continue to work with the governor's office, the legislature and the executive agencies on a pro-active legislative agenda that will make the property-casualty insurance marketplace a better one for both policyholders and insurers,” Henning concluded.