New York lawmakers have sent to the governor a commercial-deregulation bill that allows insurers to go to market with some policies before regulatory approval, while Florida Gov. Rick Scott has signed into law a commercial-dereg bill in that state.

The New York legislation allows insurers to set rates for large commercial businesses within what is known as the state's Free Trade Zone without adhering to rate-and form-filing requirements, say trade groups.

“Off-the-rack insurance products frequently do not fit the unique needs of large businesses,” says Kristina Baldwin, vice president of state government relations for the Property Casualty Insurers Association of America (PCI), in a statement.

A new class is created in the Free Trade Zone allowing commercial policies that generate between $25,000 and $100,000 in premium to be eligible for an exemption from the state insurance department as long as the policies meet other criteria identified in the proposed law, adds the American Insurance Association (AIA).

Gary Henning, vice president of the Northeast region for AIA, says in a statement that the legislation is a “positive step forward and will help foster a more efficient regulatory system for commercial lines.”

Ellen Melchionni, president of the New York Insurance Association, says that while the legislation allows for greater commercial rate freedom for certain policies, “further flexibility within commercial lines still needs to be put into place for the state to experience a thriving insurance marketplace.”

In Florida, Scott signed HB 99 into law, which expands the types of commercial insurance exempt from the rate-filing and approval process.

The National Association of Mutual Insurance Companies (NAMIC) in a statement says the governor's signing of the “rate modernization” bill, HB 99, is an “important component of a healthy insurance market.” NAMIC adds Scott's “support of free-market principles is evidenced” by the signing of the legislation.

HB 99 expands on legislation signed into law last year by then-Gov. Charlie Crist that exempted certain excess and specialty commercial lines from rate regulation.

This year's bill includes commercial property, excess property and general liability. It also includes commercial-auto lines for fleets under 20 vehicles. Larger fleets were included in the bill last year.

Rates still cannot be excessive, inadequate or unfairly discriminatory.

Should the industry successfully demonstrate that commercial-deregulation works, it hopes the same can be extended to personal lines, industry members have said.

Special Reports /

N.Y., Fla. Act On Commercial Dereg Bills

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