NU Online News Service, Mar. 30, 3:39 p.m. EDT
Insurance trade organizations said they were successful in fending off proposals to further increase assessments on carriers as part of the proposed New York State budget that state leaders agreed on over the weekend.
In February, New York Governor David Paterson's Deficit Reduction Plan increased assessments by $180 million on all insurers, with additional amounts for health insurers.
In its search for additional revenue, the executive budget proposal had considered increasing assessments further and extending assessments to non-domestic insurers, according to Paul Magaril, regional manager and counsel for the Property Casualty Insurers Association of America.
Mr. Magaril said the $180 million assessment increases from February remain, but there will be no further "332 assessments," which are assessments used to fund the state Insurance Department's budget.
Additionally, non-domestic insurers will not see assessments.
Ellen Melchionni, president of the New York Insurance Association, said imposing assessments on non-domestics could have caused a domino effect, where other states would have applied assessments to New York-based companies. The "retaliatory tax implications," she said, would have been a double-hit on domestic companies that would have also had to pay increased New York assessments.
Aside from the decisions on the assessments, the state also elected not to increase penalties for violations of the state insurance law. The increases were in the governor's budget proposal, Mr. Magaril said in a statement.
The budget did include an increase in the Motor Vehicle Theft & Insurance Fraud fee, according to an NYIA "Albany Update". The fee is charged to each auto insurance policyholder, and was increased to $10 from $5.
Additionally, the Albany Update noted that the inspection fee for insurance companies inspecting a boiler jumped from $50 to $100.
The NYIA said the legislature is expected to pass budget-related bills by the Apr. 1 deadline.
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