NYIA Hits “Hijacking”

January 16, 2015 marked five years since the New York Insurance Association, Inc. (NYIA) filed suit to stop the state’s illegal diversion of funds levied on New York insurance companies. The suit was filed in State Supreme Court, Albany County on January 13, 2010. By law, the assessment on insurers is sup- posed to pay expenses of the New York State Department of Financial Services. Instead, argues NYIA, 70 percent of the money collected is used for other state agency programs. “The diversion of funds has been going on for more than two decades, skyrocketing to an astronomical $300 million in 2009 and remaining at that level ever since,” Ellen Melchionni, president of NYIA said. “NYIA was forced to sue to seek an end to this egregious budgetary sleight of hand. Governor Cuomo and the Legislature can correct the problem moving forward by eliminating this back door tax on New York businesses. We urge state elected officials to stop this illegal practice starting with the 2015– 2016 budget.”

The illegal assessments total $1.8 bil- lion from 2008 to 2014 alone. “The state currently has a large surplus of funds and is in sound fiscal shape,” Melchionni said. “It is time for public policymakers to stop the gimmicks that fall on the backs of business. If New York is going to become business friendly these purposely buried assessments, paid in addition to regular business taxes, need to end. It only drives up the cost for residents to live in the great Empire State.”

The insurance industry is a vital component of the state’s economy, accounting for 3.3 percent of the gross state product, employing 191,930 New Yorkers and investing more than $18.4 billion in New York municipal bonds. “New York insurance companies can no longer be treated as a bottomless ATM,” Melchionni said. “This hidden tax in an era of supposed government transparency and accountability is completely unacceptable and will only discourage companies from doing business in New York.”