A key trade group for insurers in New York State applauded a proposal by Gov. Andrew Cuomo to merge the state’s insurance regulatory arm into a single agency overseeing insurance, banking and consumer protection.
The proposal for the so-called Department of Financial Regulation was included in Cuomo’s State of the State address earlier this week.
In the speech, Cuomo said a new urgency to police Wall Street is a major responsibility for the state, but that the current bureaucracy is ill-structured to confront it. “Our current organization is not effective because it is not organized the way Wall Street works any more,” Cuomo said. “These divisions of insurance and banking and consumer protection don’t exist in the marketplace and much of the activity is falling between the cracks of our regulatory entities.”
Combining those different agencies will improve their ability to protect consumers but also reduce administrative costs, Cuomo said.
That proposal was greeted with applause from the state’s key trade group for insurers — which is suing the state over what insurers say are inflated assessment charges that are funneled through the state insurance department in order to pay for unrelated programs.
“We applaud Governor Cuomo for his efforts to reduce state spending,” said Ellen Melchionni, president of the New York Insurance Association (NYIA). “Since the insurance and banking departments are funded by the respective industries these entities regulate, we look forward to a reduction in the assessments levied on New York businesses.”