NU Online News Service, 3:18 p.m. EDT–New York's Assembly Insurance Committee has released a report calling for legislation giving permanent status to the state's FAIR Plan property insurance pool, which again faces the prospect of termination.
The agency titled the New York Property Insurance Underwriting Association (NYPIUA), the state's home and business insurer of last resort, has repeatedly gone out of business over the years as Republicans and Democrats in the legislature squabble over insurance policy.
Last year, before enabling legislation resuscitated it, NYPIUA ceased operations for 53 days. Its operations are now due to sunset on June 30.
According to the committee, more than 57,000 New York home and business owners secure basic property insurance from NYPIUA after they are unable to obtain private insurance due to the location, age or condition of the property.
Among the 15 groups the committee listed as supporting permanent status for NYPIUA are six insurance organizations: the Property Casualty Insurers Association of America (PCI), American Insurance Association, Independent Insurance Agents Association, Professional Insurance Agents Association, Council of Insurance Brokers of Greater New York and New York Insurance Association.
Legislation to make NYPIUA permanent has been consistently supported by the Democrat-controlled Assembly, but the Republican-controlled Senate has opposed giving it that status.
The majority of the NYPIUA book of business, 52 percent according to the committee, is from the New York City area where the majority of the voting enrollment is Democratic.
Sen. Pete Grannis, D-Manhattan, the chairman of the Assembly Insurance Committee, in announcing the report titled "The Case for a Permanent Property Insurance Safety Net in New York", said the NYPIUA has proven its value and should be made permanent.
The report noted that in the past the Senate had linked permanent extension of NYPIUA to a measure to providing insurers with flex rating==allowing price changes in a certain range without prior regulatory approval–which the Assembly objects to.
Mr. Grannis noted that the latest deadline for NYPIUA would expire a week after the current legislative session. "Innocent parties should not be put in jeopardy by callous Senate action on a bill on the eve of adjournment tied to an unrelated issue such as rate hike relief sought by auto insurers."
According to the report, the agency during closings in 2003 and 2004 sent out 12,000 non renewal notices, which burdened agents with the work of seeking replacement coverage and forced property owners to "confront the prospect of exorbitant costs of force-placed or excess lines coverage, or going without any coverage at all."
In February, the Assembly passed A 750 to make NYPIUA permanent. The measure is now in Senate insurance committee.
A request for comment from the office of Sen. James L. Seward, R-Oneonta, who heads the Senate Insurance Committee, drew no immediate response.
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