The Professional Insurance Agents of New York State Inc. is asking lawmakers in Albany to reauthorize the New York Property Insurance Underwriting Association, which offers tens of thousands of New Yorkers access to home and commercial property owners insurance coverage.
The law authorizing NYPIUA expired last week. PIANY wants to see NYPIUA given permanent legal status.
“NYPIUA’s recurrent sunsets are the result of the legislators’ inability to agree and are symptomatic of a dysfunctional process. Lawmakers need to come together and pass meaningful legislation that will allow New York property owners access to this ‘market of last resort’ when insureds cannot find insurance coverage anywhere else,” said PIANY President T.J. Derella, CPIA. “When NYPIUA is allowed to ‘sunset,’ property owners are left in the lurch; closings cannot go forward; and some properties may lack insurance for a loss.”
PIANY supports two Assembly bills that would delete the “sunset” language from NYPUA’s enabling statute and thus make it permanent. The bills are A.4527-a and A.4447-a. A.4527-a was passed by the Assembly Feb. 23, 2004; and A.4447-a was passed by the Assembly April 26, 2004. The Senate passed S.7181, which would extend NYPIUA for only two months April 27, 2004; and the Assembly appears likely to pass A.11037, a one-year extender. However, without agreement by both houses on common language, NYPIUA will remain shut to new applicants.
PIANY cited figures provided by NYPIUA showing that, at the time of the recent “sunset,” it was receiving about 70 applications each day. At year-end, 2003 NYPIUA insured more than 57,000 policyholders, including more than 50,000 residences and more than 7,000 businesses. Demand for NYPIUA coverage grew at 12.8 percent for residential property and 14.8 percent for commercial property during 2003.
After each “sunset,” NYPIUA cannot accept new business. Having lost its authority to write new business as of April 30, it now must return applications and deposits with an explanatory letter to property owners telling them they have no coverage. Unless action is taken soon, NYPIUA will need to start sending nonrenewals to current policyholders, affecting policies with expiration dates of June 29 and later. The move is mandated by NYPIUA’s Plan of Operation, requiring at least 45 days’ notice of nonrenewal.
PIANY supports making NYPIUA a permanent legal entity, which would end the frequent cliffhangers affecting NYPIUA policyholders and agents. Plus, legal stability would allow NYPIUA to take on additional insurance-related roles, as authorized by statute, if needed.
“Short-term extenders are not the way to go,” said Derella. “It is time to free NYPIUA from its periodic burden of providing leverage in the legislative gridlock that afflicts Albany, and to find more constructive ways of reaching agreement on insurance issues that affect our businesses and our clients.”
Topics New York Legislation Property
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