Indianapolis — New York state lawmakers are expected to adopt legislation that could enhance competition in the state’s auto insurance market and aid homeowners insurance consumers living along the coastline, according to the National Association of Mutual Insurance Companies (NAMIC). Legislation that would once again allow flex rating has reportedly been endorsed by the Assembly and Senate and is likely to be approved this week.
The bill, A-11693//S-8624, would allow New York auto insurers to adjust rates twice annually by a total of 5%. The bill also implements a number of measures to address issues in the state’s coastal property insurance market. It was sponsored by Sen. James Seward, chairman of the Senate Insurance Committee, and Assemblyman Joe Morelle, chairman of the Assembly Insurance Committee.
“Agreement on this legislation marks significant progress that will benefit New York consumers,” said Paul Tetrault, Northeast state affairs manager for NAMIC. “By allowing insurers to adjust their rates without prior regulatory approval in response to changing market conditions, this legislation can give insurers confidence to compete for business.”
A previous version of the legislation would have restored the 7% flex-rating law that had been in place for several years up until 2001. While the larger flex range would have been preferable, the measure is nonetheless a step forward, Tetrault explained. “We’re hopeful lawmakers will recognize the beneficial effects of this rate modernization and increase the flex percentage in the future,” he said.
The legislation also makes permanent the state’s FAIR Plan, the New York Property Insurance Underwriting Association, expanding its coverages, and establishing incentives for insurers to write coastal business through the state’s Coastal Marketing Assistance Plan.
“These steps should provide a sense of stability and could provide a measure of relief to coastal property owners,” Tetrault said. “Senator Seward and Assemblyman Morelle deserve a large measure of credit for guiding this bill through the legislative process.”
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