N.Y. MTA’s Captive to Lead Coverage in Fatal Train-SUV Crash

New York Metropolitan Transportation Authority’s (MTA) captive insurer and wholly owned insurance subsidiary First Mutual Transportation Assurance Company (FMTAC) will lead coverage for liability for third party claims and property losses stemming from the fatal MTA Metro-North Railroad train-SUV crash this month, an MTA spokesperson confirmed.

Five train passengers and the driver of the SUV were killed in the Feb. 3 evening rush-hour collision in Valhalla, about 20 miles north of New York City. The crash was the deadliest accident in the Metro-North system’s 32-year history.

For general liability for third-party claims, the MTA has a $50 million per-occurrence all-agency liability coverage layer through FMTAC, which is in excess of the Metro-North’s self-insured retention of $10 million per occurrence. The MTA said it has additional $350 million liability coverage above that layer through the commercial markets.

On the property side, FMTAC provides an all-agency property insurance program that covers the Metro-North. This program has a $25 million deductible per occurrence for first-party damage, subject to an annual $75 million aggregate.

FMTAC was incorporated under the New York state law as a pure captive insurance company in 1997. It provides insurance coverages for the MTA and its family of agencies. FMTAC’s administration is managed by Marsh Captive Solutions Group.

According to financial documents from FMTAC’s 2014 annual board meeting held last May, FMTAC’s total assets were $1.333 billion at the end of 2013. Premium written for the full-year 2013 was $145.8 million, a 5 percent decrease from 2012.

Losses and LAE incurred expenses were $106.3 million for the full-year 2013, a 42 percent jump when compared to 2012. According to FMTAC, the increase is mostly attributable to an increase in insurance loss reserves relating to an excess loss claim from the Dec. 1, 2013, Metro-North Railroad train derailment.

The combined claim loss and operating expense ratio for 2013 was 158.4, compared to 104.2 in 2012. The increase was mostly due to an excess loss claim reserve relating to the Dec. 1, 2013, Metro-North Railroad train derailment, which produced a higher claim loss ratio, according to FMTAC.