In an effort to resolve outstanding non-flood-related insuranceclaims from Superstorm Sandy, New York's governor has established amediation program and established new rules to speed theinsurance-claims process.

Gov. Andrew M. Cuomo said yesterday that the Department ofFinancial Services created a voluntary mediation process forhomeowners who are disputing their insurance claims or aredissatisfied with the denial of a claim. Cuomo called it a speedyand low-cost resolution for contested homeowners claims and “a winfor everybody.”

Superintendent of Financial Services Benjamin M. Lawsky saidthat, under the emergency regulation, insurers will offer and payfor voluntary mediation.

The American Arbitration Association will administer theprocess, which Cuomo noted successfully resolved over 70 percent ofpast claims disputes after major hurricanes in the UnitedStates.

Today, the governor announced new rules that reduces the amountof time an insurer can delay a decision on a claim and requirescarriers to report the number of delays and why.

“These new regulations will push insurers to move those claimsas quickly as possible so people can repair their homes and getback to their lives,” Cuomo said.

The rule cuts the extension period for insurers to make adecision from 90 days to 30 days and requires insurers to estimatethe date of their decision. It does not limit the number ofextensions available to insurers.

Insurers must report to the department all extensions past theinitial 15-business-day decision window along with the amount ofthe reported loss, the reason for the extension and the number ofextensions utilized.

Cuomo also said today that Fannie Mae and Freddie Mac agreedwith the state's request for new rules reducing restrictions on howbanks and mortgage servicers can release insurance money tohomeowners with a mortgage.

Hold-ups had emerged since insurance-settlement checks issuedjointly to homeowners and lenders require the bank's endorsementbefore funds are released. Fannie Mae and Freddie Mac rules limitedthe amount of insurance money the banks can release pendingmonitoring and completion of repairs.

The new rules give banks greater discretion to disperse theinsurance money.

Insurers have settled the vast majority of claims in New York,notes Ellen Melchionni, president of the New InsuranceAssociation.

Citing figures released by the governor's office, she says 94percent of the 287,000 residential-property claims have been fullyresolved and points to a satisfaction rate of 99 percent based onthe number of complaints filed with the state compared to claimsfiled.

“Despite the numerous challenges we face outside of our control,companies have responded quickly to policyholders and in a positivemanner,” she said.

Addressing the extension-period cut, she said insurers need tofully review legitimate claims to ensure fair and quickpayment.

“Every claim is unique and different,” she said. “Some can besettled very quickly while complex claims may take longer toreview.”