NAII Opposes NYPIUA Extension to Commercial Liability

The National Association of Independent Insurers has issued a bulletin calling the proposal to add commercial liability coverage to the property coverage currently available under the New York Property Insurance Underwriting Association (NYPIUA) “unfair, ineffective, and unrelated to the purpose of the residual market plan.”

In a written statement presented to the NYPIUA, the NAII pointed out that including liability coverage through NYPIUA is inappropriate, and a better way to address pricing problems is to fix the state labor laws. It explained that the “catalyst for the proposal lies with changes to provisions found in New York labor law, the so-called ‘scaffolding law’ that imposes strict liability on contractors.” It pointed out that it has increased lawsuits and medical costs, and, as a result, contractors’ premiums. “Insurers believe that these marketplace restrictions would be better addressed by attacking the legal issues instead of expanding the residual plan,” said the bulletin.

“Adding liability coverage to NYPIUA would be a radical departure from the plan’s purpose,” stated Gerald L. Zimmerman, NAII assistant general counsel. “The NYPIUA is supported by assessments on insurers writing property coverage in the state. To assess these insurers for a liability line of coverage would be unfair. Moreover, even if NYPIUA were to offer liability coverage, the rates would have to accurately reflect loss costs and would not be any lower than rates currently available in the private marketplace through admitted and non-admitted insurers.”

He indicated that a better solution would be “to revise or repeal the ‘strict-liability’ provisions of the law and allow the marketplace to work.

“NAII believes that a competitive insurance marketplace best serves consumers, regulators and companies. This ensures that consumers have a wide selection of companies and coverages to choose from, spurs product innovation, and keeps insurance prices at their lowest possible levels,” Zimmerman concluded.