New York to Revive Lloyd’s-like Exchange

New York Insurance Superintendent Eric Dinallo said a revival of the defunct New York Insurance Exchange could happen as early as next year.

Dinallo said the next 18 months was a “realistic horizon” to revive what is seen as the U.S. equivalent of the Lloyd’s of London market.

The original New York exchange, which created a centralized marketplace for brokering and underwriting, was founded in 1980 but later that decade closed its doors after the industry was hit by severe losses. New York laws permitting the exchange still exist.

This time around Dinallo sees it as better positioned for success. “It is only going to work if there is client demand, but I believe that is falling into place.”

The exchange would allow underwriters to form syndicates to reinsure, and insure unusual or very large exposures.

Dinallo has already tapped the views of both U.S. and foreign insurers, major insurance brokerages and possible investors. Several private equity, hedge fund and large investment banks have expressed interest, seeing the exchange as a diversification tool.

Dinallo said regulatory oversight would seek to ensure that risks in the exchange were not dominated by one geographical region or type of risk.

The exchange would seek permission to sell coverage across the U.S. He said it could help insurers that are faced with the expense of state-by-state licensing and regulation.

Topics USA New York Excess Surplus Lloyd's