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Previous Entries by Subject
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Morelle Elected Assembly Majority Leader, Vacates Insurance Committee Chair
(Jan. 9, 2013) — The New York State Assembly has elected Assemblyman Joseph D. Morelle (D-Irondequoit) as the new Majority Leader in that chamber. He succeeds former Assemblyman Ronald Canestrari (D-Cohoes), who retired at the end of the last session.
Morelle has served as chair of the Assembly Insurance Committee since 2007. His elevation to the position of Majority Leader leaves the Insurance Committee chairmanship vacant. There is no word on when Assembly Speaker Sheldon Silver will appoint a new chair. IIABNY will report further developments as they occur.
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Congress Increases NFIP Borrowing Authority
(Jan. 4, 2013) — Earlier today the U.S. House of Representatives voted in favor of increasing the borrowing authority of the National Flood Insurance Program (NFIP) by $9.7 billion, ensuring that payments on claims resulting from Superstorm Sandy will not be delayed. The Senate voted by “unanimous consent” on the same measure and President Obama is expected to sign it shortly. Had the Congress not taken action, it was estimated by FEMA that funds available to pay claims would have run out sometime next week. To date, nearly 140,000 claims totaling $1.7 billion have been paid out to storm survivors.
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What You Need to Know about Fiscal Cliff Deal
(Jan. 3, 2013) — A vote on a bill to provide federal disaster relief to victims and survivors of Superstorm Sandy won’t take place until Jan. 15. However, Congress is expected to move ahead Friday with legislation to increase by $9 billion the borrowing authority of the National Flood Insurance Program, which was expected to run out of money next week to pay Sandy-related claims. Action on both issues was presumably delayed because of last-minute efforts to resolve the so-called “fiscal cliff” impasse. The Senate passed the law by a vote of 89 to 8 early in the morning on New Year’s Day. The House passed the measure by a vote of 257 to 167 that night. If you are interested in how your Members of Congress voted, you can look at the vote total in the Senate here and in the House here. Following the votes, details of the “The American Taxpayer Relief Act of 2012” have emerged. IIABA’s Government Affairs staff provides a few key provisions below of the deal that will impact independent insurance agencies:
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Provides permanent tax relief at current income tax rates for taxpayers earning below $400,000 (single) and $450,000 (joint). For income earned over these thresholds, rates will increase to 39.6 percent. Note this does not include the 0.9 percent Medicare surtax enacted by the Patient Protection and Affordable Care Act, so these rates will in reality be increased to 40.5 percent.
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Provides permanent capital gains and dividends tax relief for taxpayers earning below the $400,000/$450,000 income thresholds. For taxpayers earning over these amounts, rates on capital gains and dividends will increase to 20 percent. Note that this does not include the 3.8 percent investment income tax from the PPACA, so these rates are in reality 23.8 percent.
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The estate tax rate will be permanently set at 40 percent (up from the current 35 percent), with a $5 million (single) and $10 million (joint) exemption. Those thresholds will be indexed for inflation.
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The payroll tax holiday will be allowed to expire.
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Permanentlyreinstates the Personal Exemption Phase-Out and Pease limitation, which limits the ability of some taxpayers to utilize personal income exemptions and itemized deductions. The PEP would reduce the personal exemption ($3,800 in 2012) of filers and their dependents by 2 percent for every $2,500 that their AGI exceeds the applicable threshold -- $300,000 (married filers) and $250,000 (single filers), indexed to inflation. The Pease limitation limits the value of itemized deductions by creating a 3 percent surcharge of the amount a filer’s AGI exceeds the applicable threshold (identical to PEP income thresholds) up to 80 percent of a filer’s itemized deductions.
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Permanently repeals the CLASS Act and creates a presidentially appointed commission to study ways to address long-term care needs.
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Cuts new funding for Co-Ops under the PPACA.
Sequester Cuts
The new law delays the automatic sequester cuts that were scheduled to take effect Jan. 1 for two months. According to Congressional Budget Office, the deal also adds $4 trillion dollars to the deficit (over 10 years) and does not address the debt ceiling (which must be raised again by March, according to current estimates). These facts mean that another huge fiscal debate will take place in late February and early March.
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Cancellation Moratorium in NYC, Long Island Extended to Jan. 16
(Dec. 27, 2012) — IIABNY has learned that the New York State Department of Financial Services will extend the moratorium on cancelling, terminating or nonrenewing certain insurance policies until at least January 16, 2013. Under the order, insurance companies are prohibited from cancelling, nonrenewing or otherwise terminating most personal and commercial insurance policies before that date. The prohibition applies to policies covering risks located or headquartered in the five boroughs of New York City and the two counties of Long Island.
This is the third time that the department has extended the moratorium it imposed in the days after Superstorm Sandy caused extensive loss of life and property damage on October 29. The original moratorium became effective on October 26 for 30 days and applied to New York City, Long Island, and Westchester, Rockland and Orange counties. The department ordered a 21-day extension effective November 25 for risks in all of these areas, and ordered another 21-day extension effective December 16 for all areas other than Westchester, Rockland and Orange counties.
IIABNY has been told that this will be the final extension of the moratorium for most areas, but that it is possible that a further extension may be made for risks on Staten Island.
Visit the Storm Resources page on the IIABNY Web site and the Storm Sandy Information page on the department's Web site for more information on the storm recovery efforts.
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IIABNY Stops Erroneous Ad
(Dec. 18, 2012) — Last week, both carrier representatives as well as members in the downstate area informed us of an advertisement from the law firm of Jacoby & Meyers targeting Sandy victims. The ad uses language which IIABNY believes is false and misleading regarding the role of insurance agents. The text is as follows:
“If your business lost business due to the storm your insurance policy should cover it. If it doesn’t, your agent made an error. We’ll work to correct it.”
To say we were appalled was an understatement. IIABNY immediately engaged our attorney, Jim Keidel and his team at Keidel, Weldon & Cunningham to contact the law firm of Jacoby & Meyers and express our extreme concern over the offensive and inaccurate content. After speaking with the New York Managing Partner for Jacoby & Meyers, they did agree to pull the ad, albeit temporarily and will hold further discussions this week regarding its long-term use.
Jim Keidel will have a final discussion with the law firm on Friday and based on that discussion, IIABNY will decide what further actions need to be taken, if any.
Gov. Rejects SUM Bill
Gov. Andrew Cuomo has vetoed A.10784, a bill that would have required Supplemental Uninsured/Underinsured Motorists coverage on all automobile policies unless the policyholder rejected the coverage. In his veto message, the governor said the state Department of Financial Services will be exploring ways to increase consumer education on the benefits of SUM coverage so consumers can make a more informed decision about whether or not to purchase the coverage.
During the last few weeks, there was an attempt by the state Assembly, Senate and the Executive Branch to reach an agreement on chapter amendments that would include technical corrections to the bill so that a veto could be avoided, but ultimately no agreement was reached.
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SUM Bill Delivered to Governor
(Dec. 12, 2012) — S.7787/A.10784, a bill that requires all auto policies to have supplementary uninsured/underinsured motorists (SUM) coverage unless the policyholder rejects the coverage, has been delivered to the Governor. Under the bill, SUM coverage would be in the same amount as the BI limits on the policy, unless the insured rejects coverage or selects lower limits.
The SUM bill was introduced and passed at the request of the Trial Lawyers Association shortly before the end of session in June. There have been ongoing discussions on the bill in the months following its passage, which IIABNY has participated in.
During these discussions, the insurance industry has raised numerous concerns with the bill, including the requirement for insureds to opt-out of coverage and the applicability to renewal policies. Based on these discussions, the Governor’s office is considering a chapter amendment that would address these concerns. The amendments being considered would require a coverage selection choice, as opposed to an automatic inclusion of coverage. The Governor has until December 17 to act on the bill.
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Gov. Cuomo Announces Steps To Speed Up Handling of Sandy Claims, Implements 'Scorecard'
(Nov. 29, 2012) — New York Gov. Andrew M. Cuomo today announced new measures designed to speed up the settlement of insurance claims resulting from Superstorm Sandy. He also launched a web site that will feature a scorecard to measure insurers' performances in handling Sandy claims. IIABNY was informed of meetings this week between the governor's staff and the insurance carriers leading up to today's announcement.
In a news release, the governor said, "In the wake of Hurricane Sandy, it is vital that New Yorkers receive their claim settlements as soon as possible, so that they can rebuild their homes, businesses and lives. There simply is no substitute for speed when it comes to insurance payouts after a storm. We must do everything possible to make sure we hold insurance companies accountable to their customers."
The steps the governor announced today include:
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A new insurance regulation that will require insurers to send claim adjusters to inspect storm damage within six days of the loss report
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An executive order allowing the Department of Financial Services to issue temporary New York public adjuster licenses on an expedited basis to qualified out-of-state public adjusters
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A new Web site, www.NYinsure.ny.gov, on which the DFS will regularly publish "report cards assessing insurance companies' performance in responding to the disaster and paying claims." The site will grade 24 insurance companies on criteria that includes number and dollar amount of claims; average time for an adjuster to inspect; number of claims closed with and without payment; total number of complaints; and number of complaints as a percentage of the number of claims. Major carriers including Allstate, State Farm, GEICO, MetLife, Travelers, Chubb, Adirondack Insurance Exchange and New York Central Mutual will be graded, as will the New York Property Insurance Underwriting Association.
Visit the Storm Resources page on the IIABNY Web site for the latest information regarding Sandy.
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Cancellation Moratorium to be Extended Additional 21 Days
(Nov. 20, 2012) — The state Department of Financial Services is extending the 30-day policy cancellation moratorium it imposed shortly after Superstorm Sandy made landfall three weeks ago. The moratorium was due to expire Nov. 25, and IIABNY has been informed by the DFS the “paperwork” to extend the moratorium 21 days will be completed by Nov. 26. The moratorium applies to homeowners, personal umbrella and automobile, fire and dwelling policies, as well as commercial policies and those issued under the New York Automobile Insurance Plan and New York Property Insurance Underwriting Association, in 10 storm-ravaged counties. They are: New York, Bronx, Kings, Richmond, Queens, Nassau, Suffolk, Westchester, Rockland and Orange counties.
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DFS Extends Producer License Renewal Period
(Nov. 7, 2012) — Due to the impact of Sandy, the New York State Department of Financial Services announced today that the renewal period for all producer licenses (resident and non) scheduled to expire on or after Oct. 28 will be temporarily extended. These extensions will be effective until further notice by the Department. Late fee requirements will also be waived. Producers will be considered currently licensed even if it is beyond the expiration of their license until further notice by the Department. IIABNY is working to obtain further clarification of the extension from the department and will notify our members as additional details become available.
The decision comes after representatives of IIABNY’s legislative team — Michael Barrett, Jill Muratori and Peter Carr — held a series of discussions with DFS senior officials last week and continuing this week to advocate for this change as well as for the moratorium on policy cancellations that was announced on November 5. IIABNY is continuing its discussions with DFS officials to clarify language in Gov. Andrew Cuomo’s order last week that suspends the invoking of hurricane deductible.
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DFS Expands Types of Policies Covered by Cancellation Moratorium
(Nov. 6, 2012) — Today, the New York State Department of Financial Service says the moratorium order it announced Nov. 5 now includes commercial policies and policies issued under the New York Automobile Insurance Plan and New York Property Insurance Underwriting Association. The order originally only applied to homeowners, personal umbrella and automobile, as well as fire and dwelling policies as defined by Section 3425 of the New York State Insurance Law. Any policy covered by the DFS moratorium must be in the affected counties. For commercial policies, the headquarters or principal base of operations of the policyholder must be located in one of the affected counties.
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State Suspends Cancellations on Certain Insurance Policies in Areas Hit Hard by Sandy
(Nov. 5, 2012) —The New York State Department of Financial Services today announced a 30-day moratorium on cancellations for certain personal line policies in 10 storm-ravaged counties: New York, Bronx, Kings, Richmond, Queens, Nassau, Suffolk, Westchester, Rockland and Orange. The moratorium applies to homeowners, personal umbrella and automobile, as well as fire and dwelling policies as defined by Section 3425 of the New York State Insurance Law. It may also be expanded to apply to some commercial policies. The order is expected shortly.
The decision comes after representatives of IIABNY’s legislative team — Michael Barrett, Jill Muratori and Peter Carr — held a series of discussions with DFS senior officials last week. IIABNY was notified of the DFS decision over the weekend and was pleased to see today's announcement.
“The department deserves praise for acting quickly to provide some relief for New Yorkers still recovering from the devastating effects of this epic storm,” said Richard A. Poppa, IIABNY President and CEO. “While so many are still in the dark, struggling to stay warm, and dealing with electrical outages, a lack of phone service and long lines at the fuel pump, one of the last things they should be worrying about at this moment is whether their insurance policy is getting cancelled.”
IIABNY is continuing its discussions with DFS officials this week to clarify language in Gov. Andrew Cuomo’s order last week that suspends the invoking of hurricane deductibles and also extending license renewal deadlines for agents and brokers affected by the storm.
Visit IIABNY's Storm Resources webpage for the most up-to-date information including company claims contacts, listings of agents offering help and workspace, and programs to assist you in your relief efforts.
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N.Y. Gov. Cuomo: Homeowers Will Not Pay Hurricane Deductibles for Sandy Claims
(Nov. 1, 2012) — Insurers will not be able to apply hurricane deductibles to homeowners insurance claims resulting from Hurricane/Tropical Storm Sandy, New York Gov. Andrew M. Cuomo announced yesterday. In a news release, the governor said, "Homeowners should not have to pay hurricane deductibles for damage caused by the storm and insurers should understand th Department of Financial Services will be monitoring how claims are handled."
The storm made landfall in southern New Jersey at around 8:00 p.m. Monday night as a post-tropical storm. Earlier in the day, wind gusts from the 1,000 mile-wide storm reached 80 m.p.h. at JFK International Airport in New York City and 90 m.p.h. in Islip. However, New York Superintendent of Financial Services Benjamin M. Lawsky said that, because Sandy did not have sustained hurricane-force winds when it made land in New York, "We have informed the insurance industry that hurricane deductibles are not triggered ..." He added that the DFS would work with insurers to help them respond as quickly as possible to homeowners needing to file claims.
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IIABNY Meets With NYS Insurance Fund Leadership
(Sept. 28, 2012) — Representatives of IIABNY met today with the new leadership of the New York State Insurance Fund. IIABNY Chair of the Board Tom Crowley, Director Jack Smith, and President and CEO Dick Poppa attended the meeting at the State Fund's New York City office.
Among the topics IIABNY discussed with the State Fund's top leaders were the perspective of the insurance producer and the client on doing business with the Fund. They also discussed issues that arise out of the requirement in New York State law that employers wishing to cancel a State Fund policy provide at least 30 days' advance notice.
The participants from IIABNY described the meeting as cordial and positive. IIABNY intends to continue working with the State Fund on behalf of its members and their clients.
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DFS Rejects Workers’ Comp Loss Cost Increase
(Jul. 17, 2012) — Loss costs for Workers’ Compensation will stay at 2011 levels for the next year, following Monday’s announcement by the New York Department of Financial Services. The DFS rejected the New York Compensation Rating Board’s filing for an average increase of 11.5 percent. The increase would have affected policies with anniversary rating dates on and after October 1.
Several groups opposed the increase at a June 25 public hearing in Manhattan. These included the New York State Workers’ Compensation Board, the New York Workers’ Compensation Alliance, the Business Council of New York State, and the New York Farm Bureau. In his opinion, Financial Services Superintendent Benjamin Lawsky wrote, “When a loss cost filing of this sort presents a moving target, and when combined with the unrebutted evidence that any rate increase would be detrimental to other sectors of the State's economy, it is reasonable to adopt a wait-and-see approach.” He also refused to permit the NYCIRB to re-file revised loss costs.
Read the superintendent’s opinion here.
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Congress Extends Flood Insurance Program for Five Years
(Jun. 29, 2012) — Congress today approved a measure that would extend the National Flood Insurance Program for five years and make several reforms to modernize the program. Under current law, the program's authorization to operate will expire at midnight June 30, but President Barack H. Obama is expected to sign the bill into law before then.
The Independent Insurance Agents & Brokers of America worked closely with lawmakers in both the House and Senate to craft a reform package. Flood insurance reform was one of the highest priorities on the Big "I"'s agenda during the National Legislative Conference last April.
The bill extends the program to September 30, 2017. Among the changes it makes to the program are:
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Phase-out of subsidies for certain properties, such as secondary and vacation residences
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An increase in the cap on annual premium increases from 10 percent to 20 percent
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Makes multifamily properties eligible for coverage
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New minimum deductibles
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A requirement that the NFIP create a plan for paying off the program's debt from Hurricane Katrina
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A requirement for the creation of a council to deal with flood map modernization problems
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A requirement for the Government Accountability Office to study the prospect of adding time element coverages to the program
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A requirement for the Federal Insurance Office to study and report on natural disaster insurance issues and possible legislative solutions.
FLOOD INSURANCE ADJUSTER CERTIFICATION TRAINING OFFERED FOR NY ADJUSTERS
Training is Required to Seek or Maintain Certification for Adjusting Property Losses under National Flood Insurance Program Policies
Training will be offered for property/casualty insurance adjusters who want to seek or maintain certification so they can conduct adjuster services for claims filed under National Flood Insurance Program (NFIP) policies.
Tuesday, July 17 - 8:30 a.m. to 4:30 p.m.
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Supreme Court Upholds Health Care Reform Law; IIABNY To Continue Working For Agent, Broker Role in NY Health Insurance Exchange
(Jun. 28, 2012) — The Supreme Court of the United States today, by a vote of 5 to 4, ruled that the federal Patient Protection and Affordable Care Act (a/k/a health care reform) does not violate the U.S. Constitution. The court’s decision clears the way for the Obama Administration to implement the law.
A major part of the PPACA is the creation of health insurance exchanges. Under the law, every state must set up and operate a health insurance exchange by 2014. The exchanges will be competitive insurance marketplaces offering varieties of plans that meet certain benefits and cost standards. Small businesses and individuals whose employers do not offer health insurance will be able to purchase coverage from the exchanges; the law requires members of Congress to do so. Since the law’s enactment in March 2010, IIABNY has worked closely with the New York Insurance Department and its successor, the Department of Financial Services, to ensure that agents and brokers have a significant role in the governance and operation of New York’s exchange.
New York Gov. Andrew M. Cuomo announced on April 12 that he was creating an exchange by executive order. Today’s court decision makes it very likely that work on implementing New York’s exchange will continue. IIABNY will continue to work with regulators to preserve a role for agents and brokers in the exchange. We will inform you of further developments in The Situation Room and in IIABNY Insider.
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Congress Sets Stage for Long-term Extension by Giving NFIP Another 60 Days to Operate
(May 31, 2012) — IIABA is commending Congress for passing a 60-day extension of the National Flood Insurance Program. The U.S. House of Representatives yesterday passed the 60-day extension after the Senate approved the legislation last week by unanimous consent. Absent Congressional action, the NFIP was set to expire at midnight tonight.
The 60-day extension legislation also contains one policy provision that would remove the subsidies granted to second homes and vacation homes by the NFIP. This provision was included in order to ensure the measure gained unanimous consent in the Senate and is also a part of the long-term extension and reform bills in the House and Senate, both of which the IIABA strongly supports.
"The Big ‘I’ commends the House and Senate for passage of this 60-day extension in order to prevent an expiration of the NFIP," says Charles E. Symington Jr., Big "I" senior vice president for government affairs. "We urge President Obama to sign this legislation into law before the scheduled expiration."
In addition to the passage of this short-term extension, an agreement has been reached in the Senate for the floor consideration of S. 1940, the "Flood Insurance Reform and Modernization Act." This legislation, which would extend the program for five years and make needed reforms, was reported by the Senate Banking Committee unanimously late last year but has not yet been considered by the full Senate. The House overwhelmingly approved similar legislation last summer.
"Congressional passage of a short-term extension was made possible by a deal reached in the Senate to finally consider S. 1940, legislation that provides a long-term extension and reform of the NFIP," says Symington. "We urge Senate leadership to follow-through on this agreement and schedule time for consideration of this important legislation as soon as the Senate returns from its Memorial Day recess."
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N.Y. Gov. Cuomo Issues Order Creating Health Insurance Exchange
(April 12, 2012) — New York Gov. Andrew M. Cuomo today issued an executive order creating a health insurance exchange. The move followed the governor's announcement last month that he would create the exchange even though the State Legislature did not include it in the 2012-13 state budget.
The federal Patient Protection and Affordable Care Act (a/k/a health care reform or "Obamacare") requires each state to set up a health insurance exchange by 2013. The exchange will be a self-contained marketplace where individuals and small businesses that lack health insurance can buy it from a number of competitive providers. It must be ready to enroll insureds by Jan. 1, 2014. The law permits the federal government to set up and run an exchange if a state does not do so itself. Legislation to create New York's exchange passed the Assembly last June but stalled in the Senate. Identical language was included in the governor's budget proposal last winter but was dropped during negotiations. Shortly after, the governor announced that he would create the exchange by executive order, and the Senate leadership said they would not challenge his authority to do so.
Since the enactment of the Affordable Care Act, IIABNY has been working with legislators, the Insurance Department (now the Department of Financial Services), and the governor's staff to ensure that New York's exchange will have roles for agents and brokers. IIABNY played a key role in getting provisions guaranteeing that role into the bills that the Legislature considered. While today's executive order does not address the roles of various participants in the sale and purchase of insurance through the exchange, it does specifically create regional advisory councils made up of a variety of stakeholders. It mentions agents and brokers as potential members of these councils. This provision, which was also in the legislation, was one that IIABNY negotiated.
The governor's three-page executive order leaves out many of the exchange's operational details. IIABNY will continue to work with his staff, the Legislature, and the Departments of Health and Financial Services to ensure that agents and brokers will be full participants in the exchange.
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Regulation 194 is Upheld by NYS Appellate Court Justices
(March 8, 2012) — A five-judge panel declined to overturn a lower court decision, letting stand Regulation 194, a controversial regulation requiring New York insurance producers to disclose to their clients how their carriers and others compensate them. The decision in the New York State Supreme Court Appellate Division, Third Department was announced this morning.
IIABNY Chair of the Board Chris Brassard, CIC, expressed IIABNY's disappointment in a written statement released this afternoon by IIABNY. Go to today's issue of the Capitol Report to read Brassard's full statement.
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Reminder: Annual Wage Notices Due To Employees by Wednesday
(Jan. 27, 2012) — All New York insurance agencies and brokerages should remember that they must provide wage rate notices to their employees by next Wednesday. A New York State law enacted in 2010 requires all private employers to provide the notices. Gov. David Paterson signed the Wage Theft Prevention Act into law on Dec. 10, 2010, effective April 9, 2011. Among other provisions, the law requires employers to provide their employees with wage rate notices at the time of hire, annually between Jan. 1 and Feb. 1, and whenever there are changes to the information the notices provide.
The New York State Department of Labor has posted a variety of materials on its Web site to help employers comply with the law. These materials include a fact sheet, a frequently asked questions document, information about the wage rate notices, and many sample forms. Links to these materials are now available on the
Agency Employment Issues page in the Guidance and Research section of the IIABNY Web site.
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IIABNY Discusses Market Practices With NYS Bankers Association
(Jan. 26, 2012) — IIABNY staff and a legislative representative addressed member concerns about the marketing practices of some bank-owned agencies in a conference call today with leaders of the New York State Banking Association. Michael Smith, the NYSBA's president and CEO, and Roberta Kotkin, the group's general counsel and Chief Operating Officer, led the banking group. Attending on behalf of IIABNY were:
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Dick Poppa, President and Chief Executive Officer
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Kathy Weinheimer, Senior Vice-President of Industry Relations and Education
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Tim Dodge, Director of Research and Media Relations
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Jill Muratori, Legislative Representative
The IIABNY representatives discussed the complaints some members have made about instances where agencies owned by financial institutions have allegedly offered favorable credit terms and other inducements to obtain customers' insurance business. If true, these allegations would be evidence that the agencies and lending institutions have violated state laws against rebating. IIABNY told the bankers association representatives that its interest is in creating an environment where the players in the system routinely follow the rebating laws.
The bankers association, which regularly provides training to its members on topics such as legal compliance, broached the idea of member education on sales inducement laws, and IIABNY offered to work with them on that. The two groups agreed to maintain a dialogue on the issue.
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IIABNY Leaders Discuss Property Insurance Market With NYPIUA
(Jan. 19, 2012) — A contingent from IIABNY visited the New York City offices of the New York Property Insurance Underwriting Association (
NYPIUA) this afternoon to discuss how NYPIUA and New York’s insurance brokers can work together more effectively. Representing NYPIUA were:
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Dane Austin, CPCU, AU, Are, President
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Dennis Dee, Vice-President and Comptroller
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Robin Pollack, CPCU, Vice-President of Underwriting and Customer Service
Attending on behalf of IIABNY were:
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Tom Crowley of Maran Corporate Risk Associates (Southampton), Chair-Elect of the Board
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Todd Rockefeller of DeRosa, Rockefeller, Sohigian & Werdal (Harrison), Director
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Jim Sutton of James F. Sutton Agency (East Islip), Director
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Dick Poppa, President and Chief Executive Officer
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Kathy Weinheimer, Senior Vice-President of Industry Relations and Education
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Michael Barrett, Legislative Representative
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Jill Muratori, Legislative Representative
The conversation centered around the state of the New York property insurance market; the implementation of the market reforms enacted by the State Legislature and Gov. David Paterson in 2008; and the Coastal Market Assistance Program (C-MAP). The NYPIUA representatives encouraged brokers to access them more often, noting that the association can offer building coverage limits up to $1,500,000 if the building has a central station alarm and storm shutters (for risks in hurricane-exposed areas.) The two groups agreed to continue working together to educate brokers about NYPIUA’s coverage and service capabilities and to keep NYPIUA informed of any issues.
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Court Should Rescind Producer Comp Disclosure Rule, Argues IIABNY
(Jan. 10, 2012) — IIABNY’s appeal seeking to overturn the regulation mandating producer compensation disclosure is now in the hands of a panel of five State Supreme Court justices. The justices heard IIABNY’s attorney argue today in New York Supreme Court Appellate Division, Third Department that Regulation 194 exceeds regulators’ authority and is not based on facts and the law.
Speaking before Acting Presiding Justice Thomas E. Mercure and four other justices of the court, James C. Keidel of Keidel, Weldon & Cunningham, LLP argued:
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New York law does not give the state Financial Services Department authority to require compensation disclosure.
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The department did not comply with a state law that requires government agencies to provide estimates of what the regulations they propose will cost.
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There is no evidence proving a need for the regulation.
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It will not solve the alleged problem.
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The rule’s scope is too broad.
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It will impact least the few bad actors that are its targets.
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It could actually make unethical conduct more likely.
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The terms the department used in the regulation are so vague that producers cannot reasonably tell what is prohibited.
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The regulation changes the duties and obligations that exist under the law for New York insurance agents and brokers.
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The vague language allows for arbitrary or discriminatory enforcement.
IIABNY (which in 2004 called on insurance agents and brokers to voluntarily disclose to their clients the existence and nature of all their compensation) and the Council of Insurance Brokers of Greater New York have opposed required disclosures as a burden for producers and of little benefit to consumers. The associations filed an appeal Sept. 1 in an effort to overturn a trial court decision in November 2010 upholding Regulation 194. Last year, IIABNY’s attorneys argued in State Supreme Court that the New York State Insurance Department (now the Department of Financial Services) lacked the authority to impose the regulation’s disclosure rules and also that the regulation changes the legal duties and obligations for New York insurance agents and brokers.
IIABNY and CIBGNY hope for a decision on their appeal before the court’s summer recess.
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View a video message on today’s proceeding from attorney James Keidel, his partner, attorney Chris Weldon, and IIABNY Chair of the Board Chris Brassard, CIC.
Please note that IIABNY has developed a comprehensive library of compliance resources for members to use while the legal challenge proceeds.
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