Feb 28, 2013

PIANY testifies on post-Sandy claims handling; warns against excessive regulation

Professional Insurance Agents of New York State Inc. past President Martin Koles testified at a public hearing this week in Manhattan, providing the associations perspective on the lessons the industry learned and suggestions to prepare for future storms.

PIANY past President Marty Koles (center) with agents before the Assembly Committee.

PIANYs testimony was presented at the invitation of the Assembly Standing Committee on Insurance Chair Kevin Cahill, D-101. In his testimony, Koles recommended the committee request a "failure sequence report" from Consolidated Edison to determine if utility interruption claims should be paid; improve the claims intake process and embrace technology to adjust claims quicker and better; allow an expanded "civil authority" line of business interruption coverage in the absence of a physical loss to protect businesses in the event of future storms; increase consumer education about the availability of flood coverage; standardize hurricane deductible triggers; and streamline the claims payment process. 

Overall, Koles pointed out that, unlike FEMA claims, admitted homeowners and automobile carriers responded favorably and promptly and warned legislators that the industry should be allowed to conduct its work without excessive regulation so New Yorks property/casualty insurance market can stay competitive-a perspective echoed by Department of Financial Services Superintendent Benjamin Lawsky and supported by its post-Sandy claims "report cards."

PIANY past President Marty Koles (center) with agents before the Assembly Committee.

Koles testified that agents and brokers serve as advocates for their policyholders, and work to educate their clients through an evaluation of their assets and risks-making recommendations to ensure that they have the proper coverage, including flood. Yet, given the low rate of purchase by New Yorkers of federal flood insurance, Koles agrees that there is a need to further educate and encourage consumers to protect themselves from flooding. PIANY supports an educational flood insurance campaign designed to encourage homeowners and small businesses in flood-prone areas to purchase flood insurance.

From left to right, Assembly Insurance Committee members: Assemblyman Phil Goldfeder, D-23, Assemblyman William Barclay, R-124, Assemblyman Steven Cymbrowitz, D-45, Assembly Insurance Committee Chairman Kevin Cahill, D-101, Assemblyman Charles Lavine, D-13, Assemblyman Edward Braunstein, D-26.

Koles also commended the Assembly for passing legislation (A.2729, Weisenberg, D-20, introduced at the request of PIANY last year to address hurricane deductible trigger disparity and urged the committee to consider the measure soon. Since hurricane deductible triggers vary widely from carrier to carrier, neighboring homeowners who suffer equal damage from a hurricane will find they have disparate coverage-with some facing deductibles upwards of $20,000. "The wide disparity in hurricane deductible triggers poses a problem that PIANY has long warned policymakers about, and yet remains unaddressed," said Koles. "A severe hurricane affecting New Yorks coast areas will reveal inconsistencies that will cause a public outcry over lack of foresight by policymakers."