The Business Council supports this legislation that would abolish the New York Board of Fire Underwriters (NYBFU or the Board), along with its assessment power.
The NYBFU served a variety of functions during its nearly 150 year history. Once an integral part of the insurance industry, it played a central role in the early development of modern electrical codes. The Board operated a Fire Patrol, which served the purpose of safeguarding property in the wake of a fire. In addition, the NYBFU performed electrical inspections statewide.
NYBFU was originally incorporated by statute in 1867 because most, if not all, corporations of the day were formed by statute. Under the enabling legislation, the Board is empowered to assess insurance policies in New York City to support the operation of the Fire Patrol. The Fire Patrol has not operated for nearly five years; and, as such, it would now be appropriate to repeal the assessment language that provided for its financial support.
The operations of the NYBFU in recent years were not cost effective and did not provide the insurance industry with economic benefits that justified continued operation. Following a careful and thoughtful assessment of the operations, the membership elected to discontinue the operation of the Fire Patrol in 2006. Similarly, in 2008, the Board elected to wind-down the operations of the Electrical Inspection Bureau. This decision was reached following a rigorous quantitative analysis completed by a leading consulting company. All NYBFU operations have been discontinued at this time.
By enacting this bill, the insurance industry would save more than $10M in assessments. In the absence of this assessment, those monies could continue to be devoted to more productive purposes, including gainfully employing residents of the state of New York. By some estimates, the insurance industry pays more than $1B in taxes to the state of New York, ranging from corporate income tax, payroll tax, assessments, and other fees.
Given that the original purpose of the Board is no longer relevant, it is appropriate to provide for its dissolution. The Business Council supports the enactment of S. 6954-C (Breslin) / A. 9405-B (Morelle).