ISO Agrees On Rates For N.Y.C And D.C.
Daniel Hays
NU Online News Service, Feb. 14, 1:55 p.m. EST?The Insurance Services Office, which came under fire for its assessment of terrorism risk in major cities, said today it had modified its scheme to reach agreement with New York State and Washington, D.C insurance regulators for benchmark rates.
ISO's initial proposal divided U.S. cities into three tiers of risk with New York, Washington, D.C., San Francisco, and Chicago in the top tier. The outlying areas of these cities were tagged with the same loss cost figures as city centers.
Dave Dasgupta, a spokesperson for Jersey City, N.J.-based ISO, said the discussions with regulators, which concluded yesterday, led to an agreement that makes distinctions between different localities in those cities.
New York City, he said, will be divided with outer boroughs, and non-commercial residential properties and areas above Manhattan's 59th Street paying a lower rate.
Manhattan below 59th Street would have the rate set at 3 cents per $100 or $300 per $1 million of coverage. For the rest of the city, the amount would be 1.8 cents per $100 or $180 per $1 million of coverage. In the rest of the state, it would be .001 cents per $100 or $10 per $1 million.
In Washington, D.C., the $300 per $1 million rate would apply only to downtown non-residential commercial property and the rest of the district would be $180 per million. Further away from Washington, a rate of .005 per $100 or $50 per $1 million would apply.
Mr. Dasgupta noted that on top of the ISO loss cost figure insurers would add their own expense structure to come up with a premium rate.
Last month, ISO's initial proposal for rates was criticized at a hearing by New York Insurance Superintendent Gregory V. Serio as "deeply troubling" and Washington D.C. Commissioner Larry Mirel said the ISO risk calculations were "off the wall."
Additional complaints came from New York Assemblyman Alexander "Pete" Grannis, who noted that the Bronx, without a single "trophy building" was assessed as the same risk as Manhattan.
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