New York insurance regulators proposed a series of tweaks to the state’s coastal homeowners insurance market this week, but it will probably be months before the state panel tasked with evaluating the proposals makes any decisions.
The Temporary Panel on Homeowners Insurance — which was created by the legislature in 2008 — met earlier this week to review several proposals by Superintendent James Wrynn, the panel’s chairman.
On the table at Wednesday’s meeting — described by aides as largely an organizational one — were three of the key proposals by Wrynn and the New York Insurance Department that regulators say would help alleviate the high premiums and weak availability of homeowners insurance in New York’s coastal areas, primarily on Long Island.
The first is a change in the rules over non-renewals. Insurers in the state currently are allowed to non-renew up to 4 percent of their policyholders statewide in a given year. Wrynn has proposed restricting that rule so that insurers can only renew 2 percent of their policyholders in any county without getting approval from the state.
Non-renewals have become a testy subject in the Long Island homeowners market. Insurers have non-renewed 145,000 policies in coastal New York since 2007 — about 14 percent of the population of homeowners.
The second is a standardization of hurricane deductibles. In the 1990s, New York allowed insurers to institute hurricane deductibles, which are between 1 percent and 5 percent of the value of a home. Insurers, said Deputy Superintendent Mike Moriarty, vary greatly in the amount and policy language guiding these deductibles and the state is looking to set some parameters for how and when those deductibles would be applied.
The third proposal is a catastrophe pool, which would likely be paid for with the hurricane load charges — typically between 1 percent and 5 percent — that are added to insurance policies in the state.
Those proposals may take time before becoming reality, however.
The Temporary Panel on Homeowners Coverage is supposed to have 23 members, although only 15 have been appointed — including two insurance agents and five insurer representatives. Given that a third of the panel’s seats are unfulfilled — and an election looms next month — the department said it would likely wait until after November to push forward on the reform proposals.
“I’m pleased we have started the process of preparing for and protecting the public from the consequences of a hurricane hitting New York’s coast,” said Superintendent Wrynn. “There is much work to be done, but with the panel in place, we can get that work started and begin to help provide a safe harbor for coastal homeowners.”
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