NY plans disaster claims pool

New York Insurance Superintendent James Wrynn wants to force insurers to contribute 2% to 5% of premiums in a pool to cover disasters to help prevent premiums rising after heavy claims years, Bloomberg reports.

NY has about $2.4 trillion in insured coastal property. The pool could be funded from the 2 percent to 5 percent of policyholder premiums that are already assessed for disasters, said Michael Moriarty, deputy superintendent of the state insurance department.

The pool “would, over time, accumulate resources that could be used to help cover the cost of a catastrophe and reduce the need for a large premium increase after the catastrophe.”

Ellen Melchionni, president of the New York Insurance Association, said mandating how companies allocate their capital will discourage them from expanding in the state. “Regulations are already restrictive. New York probably has some of the most burdensome regulations in the country.”