New York Agents Group Praises Coastal Reform Plan
A key trade group for insurance agents in New York is lauding a proposal by regulators to reform the coastal homeowners insurance market in the state.
The Independent Insurance Agents & Brokers of New York (IIABNY) called the proposed reforms – which have drawn fire from insurers – an “important first step” toward solving availability and affordability problems in the state’s coastal areas.
IIABNY said that admitted insurers in the state have restricted the amounts of homeowners insurance they will write in the coastal areas of the state – particularly eastern Long Island - which has forced homeowners to obtain coverage from unregulated companies or from the New York Property Insurance Underwriting Association (NYPIUA), the state’s market of last resort.
Citing data from the Excess Line Association of New York, IIABNY said that the non-licensed insurers wrote 16,000 homeowners policies in 2009 – up from 4,400 in 2005 and 3,300 in 2000.
One out of every five dwellings insured by NYPIUA is on Long Island, IIABNY said and more than a quarter are in Suffolk County.
“These proposals from the New York Insurance Department are an important first step to restoring a healthy homeowners insurance market for the state’s coastal areas,” said Thomas J. Crowley of Maran Corporate Risk Associates in Southampton and IIABNY’s secretary-treasurer. “We appreciate the department’s efforts on this issue and look forward to working with them and our insurance company partners to ensure a vibrant and competitive market for homeowners near the ocean.”
The New York Insurance Department has proposed creating a special fund that would be used to offset some increases for coastal homeowners policies as one possible solution. The state has also said it would consider reducing the number of policies that an insurance company can non-renew in a given year – cutting that number from 4 percent of in-force policies to 2 percent.
The state’s Temporary Panel on Homeowners’ Insurance Coverages is evaluating those and other measures.
Insurers, however, maintain that there is little need for reform in the coastal market and also contend that any changes by state regulators may have unintended consequences that could end up reducing availability of coverage in the state.