Starting the Year off With a Win

I often discuss legislative and regulatory issues of importance to agents and our industry in this column. Usually, I write an update about a regulation or urge fellow agents to contact their representatives regarding an important bill that will affect us. I am interested in the legislative and policymaking process and my affiliation with PIA has been a great channel for me to stay informed and active about the goings-on in Albany. But, it’s a slow process that takes patience, and sometimes it seems feels like we’re in a similar predicament as Sisyphus – the mythological Greek condemned by Zeus to roll a boulder to the top of a mountain only to have it fall back down and have to ceaselessly begin all over again.

That’s why I’m particularly excited to report on a huge regulatory victory the Professional Insurance Agents of New York achieved this month after years of working to affect reform to the state’s automobile photo inspection requirements. This initiative has taken many years and multiple meetings with various stakeholders and the New York State Department of Financial Services and a level of diplomacy for which PIA has become known. The result is the adoption of a new regulation that will make it easier for agents and policyholders to comply with mandatory photo inspection rules.

The photo inspections are a pain. They are antiquated and the regulations governing them didn’t give agents or drivers nearly enough time in which to comply. Historically, PIA took them on in both the legislative and regulatory arenas – advocating to eliminate the photo inspection mandate altogether. But in recent years, the association took yet another tact, which led to this significant reform that will benefit both consumers and agents: Most notably by increasing the time drivers have to get the inspections done from five to 14 days!

There are additional improvements as well: The new regulation reduces the minimum time for an inspection waiver from four years to two years for an additional and/or replacement automobile if the policyholder has been continuously insured for automobile insurance; it allows an inspection waiver when an insured had the automobile continuously insured for physical damage coverage by a previous insurer that inspected the automobile within the last two years; and it allows for the use of new technology (digital photography, electronic storage of inspection reports and photographs, as well as use of email).

It also expands the renewal inspection notice requirement from 33 days to at least 45 days (but no more than 60 days) prior to the annual policy renewal date; it clarifies the types of vehicles required to be inspected; and it establishes definitions for a “new, unused automobile” and “durable medium, and new automobile dealer.”

I’m encouraged by this early victory in 2015, and energized to keep working with my association on its other initiatives in Albany. Among those are the certificates of insurance bill which was passed in the legislature two years in a row. Hopefully, Gov. Cuomo will sign it into law soon. Other PIA initiatives include reform to New York’s idiosyncratic laws that burden the business climate, such as our unique scaffold law and uneven continuing education requirements.

We are fortunate that we have great minds working with regulators and law- makers on our behalf. I encourage all agents and brokers to support their associations through volunteerism, action in grassroots efforts and especially by contributing to PAC. As I said, it’s a slow and often frustrating process, which requires patience and continuous support.

Such is the case with another initiative, supported by the Professional Wholesalers Association and the Excess Line Association of New York. This legislation (S.7551) would establish that a broker’s statutory duty of due care in selecting a nonadmitted insurer is “presumed to have been exercised” when an insurer is selected from the list of eligible insurers maintained by ELANY. It creates, essentially, a “safe harbor” for brokers selecting insurers from a voluntary eligibility list.

Like the rules I discussed above, the bill addresses a law that is unique to New York and is unnecessarily burdensome to brokers doing business in the excess lines arena. Currently, brokers in New York state must provide 21 pieces of data as part of a “diligent search requirement.

My friend, ELANY Executive Director Dan Maher, explained to me that the pro- posed statute would not require a broker to place business only with insurers on the list, and ELANY would be required to con- duct an annual analysis of each insurer on the list.

Senate Bill S.7551 was introduced in May last year, but it did not pass before the session adjourned. I’m told ELANY expects it to be taken up again in 2015. Personally, I hope lawmakers pass the bill. It would provide protection to brokers who use the ELANY list, but eliminate the requirement to report this information in an affidavit. And, permitting it to be maintained in a broker file will save time and reduce broker operating costs. It would be another win in Albany for ELANY and for brokers in 2015.