NU Online News Service, Jan. 7, 3:08 p.m. EST
New York Gov. David A. Paterson's call for reviving the New York Insurance Exchange has met with generally positive reviews with some agent associations saying they would welcome participating in the process.
The governor in his annual State of the State address yesterday proposed reviving the Insurance Exchange to help "maintain New York's status as the financial capital of the world."
The exchange would mirror Lloyd's of London underwriting complex, unusual and emerging risks, according to New York Insurance Superintendent James Wrynn.
In a statement, the Professional Insurance Agents of New York, Inc. praised the governor's initiative saying it would "enhance New York state's status as the world's financial center and fuel the state economy…"
Kevin M. Ryan, PIANY president commented that, "The reintroduction of the NYIE will help stimulate a struggling New York state economy. An exchange would provide the opportunity to bring much-needed business activity back into the state."
Timothy D. Dodge, director of research and external communications for the Independent Insurance Agents & Brokers of New York, Inc., said the association would like to play a role in developing the insurance exchange, but there is not much information available currently to know how they might become involved.
He said the association will need to see how the working group is formed to determine what kind of role they can play.
Commenting on the chances for the exchange to be successfully revived, Mr. Dodge said that with the governor's backing the odds are good, noting that delivering the concept in the governor's State of the State address "gives it a whole lot more urgency and that makes it more likely that it is going to happen."
Ellen Melchionni, president of the New York Insurance Association, said, "We are encouraged and supportive and look forward to seeing what this looks like."
Ms. Melchionni said she hopes the superintendent will turn to the association and its members for help and expertise in dealing with unusual risks as the exchange is revived, but the devil remains in the details.
A number of items need to be ironed out to make the program a success including creating the type of tax advantages that have made Lloyd's a success, she said
"I'm not sure how much heavy lifting would be involved, but we will be supportive in anyway to get those [legislative needs] accomplished," she said.
Eric Dinallo, former New York State Insurance Superintendent, who was an advocate of the concept during his term, said he "thought it was a great idea" and remains a huge supporter of the concept.
He credits Mr. Wyrnn with continuing the idea of exchange and said the governor's promotion of the exchange during his address before the legislature brings the concept to a different level than when he mentioned it in a speech to Lloyd's in New York in 2008.
He noted the next step will be to galvanize the state's major brokers and investors, raise the cash, and obtain a rating in order to make it a viable market.
Mr. Dinallo said several issues, including the financial crisis and problems with American International Group, overshadowed reviving the exchange while he was superintendent, but he believes the improved economic environment makes today a prime opportunity for the exchange.
"One has to work on this now to prepare for an improving economy," Mr. Dinallo remarked.
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