N.Y. Assemblyman Proposes State-Run Flood Insurance

A New York State assemblyman is proposing a bill to create a state-run flood insurance program designed to serve New York homeowners in flood-prone communities.

Assemblyman Phillip Goldfeder (D-Queens) announced the plan on March 1 to introduce new state legislation creating the New York Flood Insurance Association (NYFIA) — a joint underwriting association.

The proposed state-run system, Goldfeder said, would provide homeowners living in flood-prone communities an alternative to rising federally-backed flood insurance premiums by offering “economical, fair and non-discriminatory” policies.

Goldfeder, a member of the Assembly’s Committee on Insurance, said the plan is modeled on the New York Property Insurance Underwriters Association (NYPIUA), a joint underwriting association created in 1968 under the laws of the state of New York to meet the basic insurance needs of the public.

More recently, Goldfeder said, other states have taken similar steps to protect families following hurricanes.

“In 1993, the Florida state legislature created the Florida Hurricane Catastrophe Fund to lower premiums by providing partial reimbursements to insurers for catastrophic hurricane losses after Hurricane Andrew,” said Goldfeder. “In 2002, Florida created the Citizens Property Insurance Corporation as a joint underwriting association to expand insurance policy options for homeowners finding it difficult to insure their properties.”

Under the proposal, the New York Flood Insurance Association’s membership would be comprised of state-approved insurers and would be governed by the Superintendent of the New York Department of Financial Services and a board of 13 directors.

Association members would have to follow a plan of operation requiring them to provide “economical, fair and non-discriminatory” flood coverage to policyholders.

Any homeowner or renter who has made a reasonable effort to find coverage on the private market would be eligible to apply to the association, Goldfeder said, for coverage of up to $1.5 million for property and contents.