NU Online News Service, June 23, 12:10 p.m. EST
New York lawmakers have sent to the governor a commercial deregulation bill that allows insurers to go to market with some policies before regulatory approval.
The legislation allows insurers to set rates for large commercial businesses within what is known as the state's Free Trade Zone without adhering to rate and form filing requirements, say trade groups.
"Off-the-rack insurance products frequently do not fit the unique needs of large businesses," says Kristina Baldwin, vice president of state government relations for the Property Casualty Insurers Association of America, in a statement.
Baldwin specifically commends insurance committee chairs Sen. James Seward, R-Oneonta, and Assemblyman Joseph Morelle, D-Irondequoit, fore working "tirelessly on this issue."
A new class is created in the Free Trade Zone allowing commercial policies that generate between $25,000 and $100,000 in premium to be eligible for an exemption from the state insurance department so long as they meet other criteria identified in the proposed law, adds the American Insurance Association.
Gary Henning, vice president of the Northeast region for AIA, says in a statement that the legislation is a "positive step forward and will help foster a more efficient regulatory system for commercial lines."
"Because of their size and experience, these organizations understand insurance coverage terms, conditions and pricing plans," adds Christopher A. Brassard, chair of the board of the Independent Insurance Agents & Brokers of New York. "They do not require the same protections that smaller firms and individuals need."
Ellen Melchionni, president of the New York Insurance Association, says that while the legislation allows for greater commercial rate freedom for certain policies, "further flexibility within commercial lines still needs to be put into place for the state to experience a thriving insurance marketplace."
"The majority of states around the country allow commercial insurance companies greater latitude with rate and form filings," she adds.
NYIA, PCI and AIA say they look forward to working with lawmakers in New York to continue "modernization" efforts.
Gov. Andrew M. Cuomo is expected to sign the bill, they say.
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