N.Y. Agents Relieved as Lawmakers Delete ‘Draconian’ Fines

Insurance agents have succeeded in removing from the New York State budget a provision to hike fines against insurance professionals.

The Independent Insurance Agents & Brokers of New York, Inc., praised the Assembly and Senate for deleting a provision that could have meant 100 percent to 2,000 percent increases in insurance fines in some instances, fines the group termed “draconian penalties.”

The group maintains that the proposed penalty increases might have inadvertently punished insurance agencies for simple bookkeeping errors, such as not renewing an insurance license before its expiration date.

The proposal would have increased fines from $1,000 for the first violation and $2,500 for each subsequent violation to $10,000 and $25,000 for running an insurance business in New York without a license, even if it were a matter of simply forgetting to renew the license.

“The government is right to punish criminally negligent insurance wrongdoers and, at the same time, increase the state’s revenues,” said Mark J. Hagan, IIABNY chair and president of Elmira, New York’s Perry & Carroll, Inc.

“However, the financial weight of these penalties could have hurt many small, well-intentioned family run businesses, who might not have survived such a crushing blow. These fines would have been the equivalent of losing your house or car because of one late payment.”

The New York State Legislature passed the 2006-2007 budget in time for the new fiscal year, which began April 1. The governor now has to approve, veto or negotiate the budget within 10 days.

Gov. George Pataki has announced he will not seek re-election in 2006, making this budget his last as New York’s governor.

Source: IIABNY

Topics New York Legislation Agencies