NY exchange lacks oomph

New York insurance superintendent James Wrynn wants the industry to take the lead in establishing the New York Insurance Exchange, the FT reports

“I don’t want to bring something prepackaged to the industry and say ‘look, we have this’ and then try to sell it,” he said.

“We have this concept, we are devoting a lot of resources to it at the department; there seems to be an alignment of stars on the political side at the local, state and even federal level: what can we do to help? But we want this to be industry-driven, we want it to make sense for the industry.”

Like Lloyd’s

The exchange would mimic Lloyd’sin that it would allow brokers to bring large insurance risks, or more unusual or volatile risks, to be split and placed among a broad group of underwriters.

It could act as a point of access for foreign insurers looking for an entry point into the US insurance market.

More than 50 organisations, including brokers, insurers, reinsurers, consultants, investment banks, private equity groups and public bodies, attended an initial industry gathering about three months ago to talk about the proposals.

No industry champion

The head of one specialist insurer said: “They want to work with insurers, but support from the industry is still uncertain. I’m not aware yet of an industry champion who will take the lead on this, which is what they need.”

Chartis, said: “We intend to participate in the sub-groups that the department is establishing to oversee the process.”

Seven working groups will deal with separate issues regulatory oversight, capitalisation, tax issues, operations and technology, markets, multi-state issues and government relations.

Timescale

They report back next month with ideas and recommendations by June. Wrynn would then try to create a proposed action plan by September.

“I am guardedly optimistic that we will be able to set something up that suits a need that the industry finds to be of advantage or assistance,” he says.

He told the FT it would take longer than two years before anything was established, but less than five.

“What I told them ... is I want to be as much if not more of a facilitator than a regulator. I want to help you to do your jobs. You’re the ones in the trenches, you know what you need and we want to be there to assist things as we can,” he says.