Directs the special advisory panel on homeowners' insurance/catastrophe coverage to study certain facets of profitability of insurance in coastal areas

Summary of specific provisions

Section 1: Amends Chapter 136 of the Laws of 2008 to expand the charge of the Panel to include: A) reviewing federal legislative activities, in addition to state legislative activities, related to catastrophe related insurance coverages, B)evaluating the effectiveness of the voluntary market assistance program with particular attention devoted to market dynamics in the coastal homeowners insurance market, C) evaluating the governmental capacity and effectiveness in responding to a catastrophic weather event, D) evaluating the profitability of insurers that write homeowners' insurance in this state and the profits or losses such insurers sustain by writing coverages along this State's coast line, and E) looking into the estimated cost of obtaining comparable homeowners' insurance if their previous coverage has been cancelled.

Section 2: Amends section 23 of Chapter 136 of the Laws of 2008 to encourage the Superintendent of Insurance to seek to new ways to identi- fy new insurance carriers that may want to write homeowners' insurance in the State's coastal areas to help replace those carriers that are slowing withdrawing from this market. Encouraging more private carriers to write coastal homeowners' insurance should help to increase the availability of coastal homeowners' insurance and give consumers more choice in this tightening market.

Justification

For more than a decade, some of New York's largest homeowner insurance carriers have been either gradually withdrawing or curtailing the issu- ance of new policies in the coastal homeowner's insurance market. While, due to national trends related to excess liability exposure in coastal areas, it is prudent for some of these larger carriers to reduce their liability exposure in coastal areas, it is important that New York

homeowners are able to access a variety of insurance products at afford- able prices to cover their diverse insurance needs.

This bill expands the scope of the Panel to ensure that the Insurance Department has sufficient information so that the Department can encour- age other insurers to expand writings in this area or to enter the coas- tal homeowners insurance market to replace, in an orderly manner, those who are withdrawing from the market. Under current law, insurers are required by law to notify the State Insurance Department of their plans to withdraw from the market and to file a withdrawal plan. Further, insurers are encouraged to take steps to ensure that their departure from this segment of the market is conducted in an orderly manner to minimize the disruption that is sure to be caused by so many homeowners scrambling to secure replacement coverage.

This bill expands the scope of the Panel so that the insurance industry (including insurance agents, brokers and carriers in both the admitted and non-admitted market), in cooperation with the Department, can create an environment that encourages more writings of homeowners insurance in the State's coastal areas.

Prior legislative history

New Bill.

Fiscal implication

None.

Effective date

Immediate.