IIABNY Seeks To Address NYSIF Competition Issues

A New York agent's association is looking to have legislation reintroduced that would address what the association says are oversight and competitive issues surrounding the New York State Insurance Fund.

NYSIF is a state-run entity that provides workers' compensation coverage to New York businesses and does not pay commissions to producers who place business with the fund.

Michael Barrett, legislative representative for the Independent Insurance Agents and Brokers of New York, said producers are concerned with the lack of oversight of NYSIF practices, noting that the fund is not overseen the way normal private carriers are in the state.

NYSIF enjoys nominal regulation by the Labor Department that does not include the direct oversight Mr. Barrett said is necessary.

IIABNY is seeking to provide the New York State Insurance Department with the authority to regulate NYSIF.

Because of the current oversight structure, Mr. Barrett said NYSIF, as a quasi-public entity, has a competitive advantage over private carriers in some respects. For example, he said NYSIF has its own rating structure that gives it flexibility private carriers do not have.

Additionally, IIABNY is seeking to do away with NYSIF's 30-day cancellation notice policy. Mr. Barrett said if producers want to move business from NYSIF to a private carrier, the producers have to give the fund a 30-day advanced notice. He said there have been complaints among agents that NYSIF uses this time to go around the producer and attempt to retain the business through its rating flexibility.

Mr. Barrett said IIABNY worked with state legislators during the last legislative session to get a bill introduced that would address these issues with NYSIF. The bill (S.7673 in the Senate and A.10844 in the Assembly) was sponsored by Senator Kenneth Lavalle, R-Port Jefferson, and Assemblyman Robin Schimminger, D-Kenmore.

Mr. Barrett said the association knew the bill would not pass last session, but the association wanted to get the bill in to develop active debate about NYSIF activities. He said it is the association's intention to get the bill re-introduced, but he acknowledged the association is seeking a major change–moving regulatory authority from one agency to another. Mr. Barrett said a challenge will be addressing fiscal issues associated with this change during a time when there are deficit issues.

A spokesman for Assemblyman Schimminger said it is unknown at this time whether the bill will be re-introduced during the upcoming session.

A spokesperson for Senator Lavalle did not immediately return a call for comment.

An NYSIF spokesman declined to comment on the proposed legislation.

A spokesman for the NYSID said the department does not comment on association legislative agenda items.