The Independent Insurance Agents and Brokers of New York expressed optimism that the State Assembly will take action on legislation to ease the coastal homeowners insurance situation on Long Island.

The agents association offered that assessment today after a meeting last week on Long Island between some of its agent representatives and a group of Assembly members, including Insurance Committee Chairman Joseph D. Morelle, D-Rochester.

Kathy Weinheimer, IIABNY's senior vice president of industry relations and education, said Mr. Morelle also discussed the possibility of a change to allow multiple lines of insurance to make rate changes within certain percentage levels without regulatory permission- flex rating.

Ms. Weinheimer said that the members of the Assembly, mostly consisting of representatives from Long Island, were active and engaging when discussing coastal issues. "They asked a lot of questions, which led me to believe that they're really starting to think about it more than they may have in the past," she said.

The association discussed some of its longstanding legislative objectives with the Assembly members, including permanent status for the New York Property Insurance Underwriting Association (NYPIUA), which is the state-sponsored FAIR Plan insurer of last resort that offers homeowners insurance when they cannot find coverage in the standard market.

Currently, the program is reauthorized periodically, and in the past, coverage has lapsed when legislators have not renewed the program before its expiration date.

Ms. Weinheimer said that the Assembly members were open to this idea, and she noted, "The Assembly actually did pass a NYPIUA permanency bill last year. It was in the Senate where it fell apart."

She said that this year, such legislation may pass even though it has stalled previously. She cited the positive working relationship between Mr. Morelle, who was appointed as chairman of the Insurance Committee last year, and his counterpart in the State Senate, James Seward, R-Chenango. "I do believe that we have a much better chance this year of having [a NYPIUA bill] go through," Ms. Weinheimer said.

The discussion also touched on offering incentives for insurance companies to write wraparound policies for NYPIUA, Ms. Weinheimer said. NYPIUA offers basic coverages such as wind and fire, but excludes other coverages that homeowners require.

Ms. Weinheimer noted that while companies are able to write wraparound policies that would make NYPIUA a more complete policy, most companies choose to write "the equivalent of a tenant homeowners policy - an HO-4. We would like to see a true HO-3 type wrap policy."

She added, "I think part of the reason they're not doing that [currently] is they're perhaps concerned about the additional exposure they might have on contents coverage and the things that are included in the wrap. You don't get as many covered perils on an HO-4 as you do on an HO-3 ... but we think with proper incentives, we can offer a better product in the marketplace."

In what was called a "big change" from the Assembly's historical philosophy, Ms. Weinheimer said that Mr. Morelle initiated a conversation with the agents about establishing a flex rating system for multiple lines of insurance.

IIABNY, Ms. Weinheimer noted, has been advocating a return to flex rating for auto insurance in the state after that authority sunset several years ago, but Mr. Morelle's discussion included all lines of insurance except for workers' compensation and medical malpractice.

Ms. Weinheimer said that the plan discussed would involve somebody, most likely the Insurance Department, regularly determining the competitiveness of different lines of insurance.

Those lines that are deemed competitive would be allowed to adjust rates without prior approval within a flex band. Lines that are deemed not competitive would continue to operate under the prior approval system.

Calls to Mr. Morelle's office were not returned.

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