New York will hire more minority- and women-owned debt underwriters, lawyers and risk managers and ease regulatory barriers that are “openly discriminating” against foreign reinsurers, Democratic Gov. David Paterson told reporters Thursday.
Paterson, the state’s first black governor, who is also legally blind, joked when describing the complaints of insurers with whom he had recently met: “If I had closed my eyes, I would have thought I was talking to black people.”
Italian, Irish and British insurers want regulatory barriers lowered, he said.
“New York is regulating itself out of the global market, being overtaken by India and China,” Paterson said, adding that companies “feel we are blocking Asian and South Asian and Middle Eastern firms now competing with financial centers in New York and London.”
U.S. states regulate insurance. So New York, whose myriad of financial services includes insurance, is a top rule-maker.
“We’ve got to clear this up across the board,” Paterson said.
Insurance Superintendent Eric Dinallo told Reuters that this year, the state probably will ease rules requiring foreign reinsurers to post collateral when they face claims. This should bring in more foreign companies and drive down insurance rates.
EVEN MISSISSIPPI DOES BETTER
Many states outperform New York in hiring minority and women-owned firms, Paterson said, announcing an end to practices like rejecting companies because they had not yet done business with the state or letting a company owner qualify as a woman-owned business by using his wife’s name.
“Michigan, California, Texas, Florida, Maryland, Ohio, Illinois, Tennessee (and) Alabama … all of these other states seem to find minority enterprises that were qualified to participate,” Paterson said.
Even Mississippi hires more such firms, Paterson said, while making this observation about its Republican governor, Haley Barbour: “His ideology is not going to let you forget Medgar Evers.”
Evers, a black Mississippi civil rights leader, was slain in 1963.
Mississippi’s Gov. Barbour, a former head of the Republican National Committee and well-known for his conservative views, was re-elected last year. Barbour is one of the few politicians to win praise after Hurricane Katrina struck in 2005 for working to quickly reopen casinos in coastal cities to kick-start their economies.
FLEXING A NEW YARDSTICK
The new guidelines Paterson signed as part of an executive order also will spur state agencies to buy more goods and services from minority- and women-owned businesses, he said.
Paterson put some of the blame for New York’s faltering economy on its failure to fully tap local and out-of-state talent. Saying the country from its “inception” had failed to include everybody, he added: “We shoot ourselves in the foot.”
Noting New York traditionally hired only the most prominent banks for often lucrative underwriting positions, Paterson said many of them started out as small firms. He added that one top underwriter, Bear Stearns, had to be bailed out by the Federal Reserve. The investment bank was then bought by JPMorgan Chase & Co .
“What we are trying to do is be fair to all of the firms,” he said.
Asked how the performance of state agencies would be measured, Paterson said his officials would be keeping score and comparing New York’s performance to that of other states.
“There’s a new sheriff in town,” he said later, echoing one of his predecessor’s most famous statements. Former Gov. Eliot Spitzer resigned in March amid a prostitution scandal.
Paterson said Spitzer was “certainly moving on the right track” in boosting minority- and women-owned companies, noting that last December, Spitzer personally called the Dormitory Authority to push it to hire its first minority underwriter in 23 years.
A new task force will release recommendations in April 2009 that will be finalized the following year.
(Editing by Jan Paschal)
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