Why N.Y. Cant Act
New York's legislature a group that plunges deeper into national disrepute each year recently displayed why it deserves its sad reputation, spending two months ineptly grappling over a simple provision of insurance law.
The political football in this case was legislation to renew the operations of the New York Fair Plan the insurance pool for people who have difficulty getting coverage for homes or businesses. It was allowed to expire April 30. When they finally managed to pass legislation resuscitating it, the best Albany could do was approve a 12-month extension.
This is not the first time that the program known as "Nippyuh" (the New York Property Insurance Underwriting Association) has been allowed to expire. Over the years it has been allowed to die at least three other times to the consternation of the 58,000 policyholders relying on it for home and commercial property coverage.
The disruption whenever the law sunsets can be substantial deals to sell homes in areas that rely on NYPIUA for protection go by the wayside, while businesses might be forced to close if they are unable to find other coverage.
So why doesn't the legislature make it permanent as every other state with a Fair Plan has done, with the exception of Alabama? Chalk it up to another chapter in the institutionalized blood feud between state Republicans and Democrats.
Albany insiders say Republicans who control the Senate happily take NYPIUA hostage in an effort to extort concessions from Democrats in control at the Assembly. Most of the homes and businesses using NYPIUA are in Democratic territory, so the GOP figures Dem anxiety over their constituents will make them yield on a few points.
Republicans, for the record, deny this. A functionary with the Senate Insurance Committee, who asked to remain nameless, maintained that no horse trading was involved, adding: "We believe it's important to revisit NYPIUA periodically."
Democrats, for their part, take their own insurance-issue prisoners. They have refused to put through a comprehensive anti-fraud package that Republicans and the insurance industry lobby for every year, and they have balked at flex-rating for insurers while pushing for a public ombudsman on insurance issues.
Next June 30, NYPIUA is slated to expire once more, and doubtless the wrangling will start up all over again. This time the date for the law to sunset is after the legislature's spring adjournment. That change is somehow supposed to avoid the gamesmanship.
Veteran observers and insurance lobbyists say the problem with New York's legislature is that its members and leadership have almost no turnover and those in office stick to their entrenched positions. It is said that it's easy to stop something from moving through Albany, but very hard to get anything passed. "Hostage taking is common around here," noted one legislator.
The state legislature at this point appears so out of control that Republican Gov. George Pataki can't deal with it. They adjourned their session without giving him a budget and were busy running for re-election.
The governor on July 7 announced that he was cutting the rate for assigned risk drivers by 2 percent and took the occasion to push for the anti-fraud package passed by Senate Republicans. "The Assembly has before it legislation that has passed the Senate which can help fight fraud even further, and they should act on it immediately," said the governor.
Yeah, any day now.
Daniel Hays
Senior Editor
Reproduced from National Underwriter Edition, July 16, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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