New York insurers and insurance agents are applauding lawmakers for giving final approval to a bill that eases regulations on commercial insurance products and rates.
The bill exempts insurance policies written for large commercial businesses from most rate and form filing requirements. Insurers are still required to make informational form filings to regulators at the Department of Insurance.
Governor Andrew Cuomo was expected to sign the legislation, which will take effect 90 days after he does.
“It will enable insurance companies to serve large businesses and organizations better by freeing them from rate and policy approval requirements. The companies will now have the flexibility to offer insurance coverages customized to meet the needs of these complex organizations,” said Christopher A. Brassard, chair of the board of the Independent Insurance Agents & Brokers of New York, which supported the measure.
“Because of their size and experience, these organizations understand insurance coverage terms, conditions and pricing plans. They do not require the same protections that smaller firms and individuals need. While the insurance companies must still inform the New York Insurance Department about the policy forms they provide to these customers, they will have more freedom to design unique solutions to challenging loss exposure problems.”
The legislation (A.8464/S.5811) creates a new Class 3 of commercial lines policies within New York State’s Free Trade Zone. Policyholders whose policies generate between $25,000 and $100,000 in premium annually and who meet other criteria as identified would be eligible for an approval exemption from the insurance department policy and rate approval.
The legislation will allow insurers to move innovative products to market more quickly, according to the Property Casualty Insurers Association of America (PCI).
Kristina Baldwin, PCI assistant vice president for state government relations, said that “off-the-rack insurance products frequently do not fit the unique needs of large businesses” and that the new law will enable insurers to tailor coverage to quickly meet the specialized needs of these insureds.
Backers also said the measure will allow state regulators to focus resources where they are needed most, rather than reviewing policies for businesses that employ risk managers who are experienced in negotiating with insurance companies.
“This legislation is a positive step forward and will help foster a more efficient regulatory system for commercial lines in New York State,” said Gary Henning, Northeast vice president for the insurer group, the American Insurance Association.