April 22, 1999
Governor joins call to deregulate
Two proposals would help New York's P&C insurers compete for
Governor Pataki has proposed abolishing current regulations on the commercial insurance industry, giving new momentum to the call for insurance deregulation.
The Governor's plan, which was announced April 15, would eliminate the requirement that the state Insurance Department approve many commercial policies.
The Governor said his plan would remove a "regulatory straitjacket" from New York insurers.
The Governor's proposal, which has not yet been introduced as a bill, joins a similar proposal introduced last year by Assemblyman Alexander "Pete" Grannis (D-Manhattan). That bill has been introduced this year by Assemblyman Grannis and Senator James Seward (R-Oneonta).
At present, employers that buy insurance on commercial property, such as buildings or fleets of vehicles, typically need policies that are structured to their specific needs.
New York insurers can create such policies, but regulations require the state Insurance Department to approve all such policies. This process can take many months.
In part to avoid such delays, em-ployers often buy tailored policies from offshore insurers that operate in less regulated environments and can write such policies without delay.
Both the Governor's bill and the Seward-Grannis bill would "re-regulate" the commercial industry by imposing new requirements on commercial property and casualty (P&C) insurers.
These proposed new regulations focus not on approving policies or premiums but on monitoring the financial viability of insurers as well as insurers' business practices.
The Governor's proposal would not affect life insurance or personal auto, homeowners, malpractice, or workers' compensation insurance.