New York Insurance Superintendent Howard Mills has written insurers urging them not to act hastily and cancel the insurance of homeowners in flood-hit areas, while reminding carriers he has the power to halt policy terminations.

"In particular, I would hope adjusters and underwriters exercise care and responsible judgment in making determinations regarding claims, cancellations and non-renewals of policies," he wrote.

"The cooperation of all insurers in this matter will assist the superintendent in his assessment of the situation, and in determining whether or not it will be necessary to exercise the emergency [legal] authority" to impose a moratorium on cancellations, he advised.

Mr. Mills' request came in a Circular Letter issued Friday to insurance licensees in the flood-affected areas, asking them to consider a policyholder's situation when interacting with the region's individuals and businesses.

The superintendent said that under Insurance Law Section 3425(p) he has the power to declare a moratorium precluding policy cancellations and non-renewals in areas of the state that have received a disaster or catastrophe state of emergency declaration from the governor.

He said he has not as yet chosen to invoke this power in the 13 counties where Gov. George Pataki has declared a disaster emergency--Broome, Chenango, Cortland, Delaware, Herkimer, Montgomery, Oneida, Orange, Otsego, Schoharie, Sullivan, Tioga and Ulster.

Heavy rains two weeks ago caused flooding along the Susquehanna River by New York's southern tier as well as by the Delaware River on the state's Western edge.

The flooding led U.S. Sen. Hillary Rodham Clinton, D-NY, to issue a call to Allstate not to drop insurance for New York homeowners, which she referred to mistakenly as flood insurance.

Allstate, battered by Hurricane Katrina losses, said earlier in the year it was not writing new homeowners coverage for counties in the state with coastal exposure, including New York City, Long Island and Westchester County.

Mr. Mills said he was "very proud" of the role his agency played in New York State's response to the flooding in Central New York and the Hudson Valley.

"We have some of our best professionals staffing the eight Disaster Assistance Service Centers, while others continue to answer the dozens of calls that come each day into our toll-free Disaster Hotline," he noted.

On Saturday, the department's mobile command vehicle was sent to the Broome County Disaster Assistance Service Center in Binghamton, N.Y. to provide additional support. Insurance Department personnel are available at that locale seven days a week, between 8 a.m. and 8 p.m., and at the seven other centers that have been established, it was announced.

Special Reports /

Mills To Insurers: Go Slow On Disaster Cancellations

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