New York State Governor David Paterson has announced plans to revive the New York Insurance Exchange (NYIE).

Modeled after Lloyd’s of London, the original NYIE was founded in 1980 as a common market for insurers to place hard-to-place risks, but closed in 1987.

“By bringing together buyers and sellers of complex commercial insurance, the exchange will reaffirm our status as the hub of international trade and finance and it will also curtail the unregulated transactions that devastated the global economy,” Paterson said in his State of the State address. “New York was the epicenter of so much that went terribly wrong in 2008. It is our responsibility as New Yorkers to lead in the rebuilding and reform of these vital global markets.”

Kevin Ryan, president of Professional Insurance Agents New York (PIANY) praised the initiative, adding it would help keep insurance dollars stateside, as opposed to sending them to international reinsurance markets. “The reintroduction of the NYIE will help stimulate a struggling New York state economy,” Ryan said in a statement. “An exchange would provide the opportunity to bring much-needed business activity back into the state.”

Ryan also predicted the revived NYIE would fare better than its predecessor, close its doors after seven years, due to unforeseen losses in the product liability market. “The insurance marketplace is much different today than in the 1980s,” he said. “It’s much more sophisticated, making it likely that the NYIE will be a success.”

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