New York Agents Want Export List Expanded

Agents say that the search of the admitted market ends up being just a time-waster for them and their clients. They already know which risks their
insurers will accept and not accept.

Insurance agents and brokers from across New York are supporting efforts to make it easier to access nonstandard markets for coverage for some high risks.

The Excess Line Association of New York has proposed adding dozens of coverages – including coastal homeowners insurance on Long Island, vacant building coverage and some types of professional liability policies – to the so-called export list of coverages. This list identifies risks that agents can submit directly to excess lines brokers without having to first obtain three standard market carriers’ declinations.

Many agents and excess brokers view the three declinations rule as an unnecessary administrative procedure that slows the process on a risk that they say they know cannot be placed in the standard market.

Other risks the ELA has proposed adding to the list include liquor law liability, pollution clean-up, ski areas, nursing homes and some types of excess commercial liability. (See related story.)

The New York Insurance Department held a hearing earlier this month on the export list. Agents testified that the search of the admitted market is a time-waster for their clients, too, since agents already know which risks their insurers will not accept.

Neal Sullivan, president of Sullivan Financial Group in Mahopac and chairman of the Independent Insurance Agents and Brokers of New York, said that it’s easier and more profitable for him to place business with the insurers he represents rather than with the non-admitted market. “I know their products and business they want to write, I know their premium rates, I know how they handle claims, and in many cases, I have worked with their underwriters for some time. Going to a wholesale broker to access the excess lines market is expensive in terms of commission I must share and time I must spend.

“However, in the interest of serving the client and dissuading him from giving his business to a competing agent or broker who represents other insurers, I am willing to seek coverage from the non-admitted market.”

For Sharon Emek, of Manhattan-based CBS Coverage Group Inc., the current process requires agents to obtain declinations from at least three admitted insurers even when they know none of their admitted markets want them to even submit such risks to them. “How then are we to truthfully say that we had reason to believe that an insurer would consider insuring that client?” she asked.

Emek added that “the diligent search requirement in these situations ceases to be a protection for admitted insurers and consumers. Rather, it becomes a potential pitfall for the broker, and we don’t believe that the Legislature intended for it to be so.”

Wholesalers also said they believe an expanded export list would be beneficial. “We see the major advantage of expanding the export list to be the reduction in time, expense and effort of retail producers in documenting declinations for accounts that are clearly no within the risk appetite of licensed insurers,” said Gary D. Ricker Jr., president of the Professional Insurance Wholesalers Association of New York State and president of Pacific Pro Intermediaries.

Topics Carriers New York Agencies Excess Surplus