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

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

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

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

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

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Ellen Melchionni, president of the New York InsuranceAssociation, says that while the legislation allows for greatercommercial rate freedom for certain policies, “further flexibilitywithin commercial lines still needs to be put into place for thestate to experience a thriving insurance marketplace.”

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In Florida, Scott signed HB 99 into law, which expands the typesof commercial insurance exempt from the rate-filing and approvalprocess.

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

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

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

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Rates still cannot be excessive, inadequate or unfairlydiscriminatory.

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Should the industry successfully demonstrate thatcommercial-deregulation works, it hopes the same can be extended topersonal lines, industry members have said. 

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