Five minutes with ELANY’s Daniel F. Maher
The Professional Insurance Wholesalers Association took
a few minutes to chat with the Excess Line Association of New York’s
Executive Director Daniel F. Maher, to discuss his thoughts on the
wholesalers market; the value of association membership; and more. Here’s
what he had to say.
What
are the biggest issues/trends that are affecting the E&S market today?
Broker, wholesale broker and insurer consolidations are
impacting competition and compensation in the marketplace. There has never
been more capital in the market; nor more capital available to insurers.
Technology is a tool of the industry that is changing at an ever-increasing
speed: It is a source of risk as well as a source for new products. Success
is still very much tied to efficiency, adaptability and an expertise for
complex and difficult risk.
ELANY
was created 30 years ago, how has the E&S market evolved since then?
ELANY was created just about the time when “Napkin”
binders went out of vogue. It’s just as well. Napkins didn’t hold up well
to the ELANY stamp. At the time ELANY was created, 80 percent of the
premium written was by alien insurers. Now the market is 75 percent U.S.
insurers; 20 percent Lloyds; and 5 percent other alien insurers.
Additionally, there is a commitment to financial strength
and solvency. The New York market has been free of E&S insolvencies for
17 years.
Technology is impacting every phase of the business.
Documentation turns around in moments not days, weeks or months like it did
in the 1980s. I see more underwriting discipline today. When you look at
ELANY’s statistical database, even with all of the capital in the
marketplace, E&S-type risks are staying in the E&S marketplace.
Where
do you see the marketplace heading in the future?
The future of the market is likely to be the same core
that makes the market what it is today. Emerging risk is the watchword for
all types of new products and methods by which the products are
distributed. There are new products for cyberrisk, drones, nanotechnology,
marijuana growers and distributers, autonomous vehicles as well as
on-demand, use-based pricing for some products. While the larger volumes of
today’s premiums are in more traditional segments of distressed or
difficult risk, such as the construction industry, the market is ready and
trying to evolve. Laws and regulations have not kept pace with product and
distribution developments.
How
do associations (i.e., ELANY and PIWA) benefit the E&S market?
PIWA, as a traditional trade association, offers its
members first and foremost networking opportunities for business
development. While members are competitors, they share many of the same
difficulties and can work toward solutions to the benefit of all members.
As a group, they can speak with one voice before regulators or legislators
to express the need for change or regulatory relief. More often than not
you will find the more successful brokers and industry leaders
participating in an industry trade association.
ELANY’s role is a little different: We share some of the
attributes noted above, but ELANY is more focused on breaking down a
complex set of rules and regulations; educating the marketplace; and
helping brokers comply with state law to avoid regulatory jeopardy.
What
is the value of an association membership?
Association memberships provide brokers the opportunity
to meet colleagues they might not otherwise meet. These could be future
markets, future employers, future employees and even future customers. As a
member, you may hear about some important industry issues that could
otherwise damage you for not knowing or benefit you by learning something
new. If there is an issue on the minds of many of your colleagues, it would
probably benefit you to learn about it.
Final
thoughts?
Associations
exist to benefit their members. If you have questions or issues for which
your association can provide guidance, meet the association halfway and
call us at (518) 434-3111, write us at piwa@piwa.org
or visit us online at www.piwa.org.
Daniel
F. Maher
Executive
Director
ELANY
New
York, N.Y.
N.Y. passes budget, legislative update
The
state fiscal year runs from April 1 to March 31. The governor’s proposal
for a 900 percent increase in insurance fines in certain instances did not
make the final budget. Additionally, the proposal that would have allowed
insurance adjusters with felony convictions also was not adopted. The
Legislature did pass provisions to prohibit mandatory arbitration
requirements for sexual harassment allegations as well as nondisclosure
provisions. (A.9507-C/S.7507-C subpart B of Part KK.)
Additionally,
a number of bills that would affect the insurance industry have been introduced
into various insurance committees or seen action in either of the state
houses, including the following:
Continuing
education for association membership. The state Senate passed
PIWA-supported legislation S.3960,
sponsored by Sen. James Seward, R-51, which would allow
continuing-education credit for agents and brokers who are active members
in professional associations. The Assembly bill (A.7012)
is sponsored by Assemblywoman Pamela Hunter, D-128.
Punitive
damages. Legislation advanced by the Excess Line Association of New York, which
would allow for insurance for punitive damages, has been amended by the
bill sponsors Sen. Seward (S.423-A)
and Assemblyman Anthony J. Brindisi, D-119 (A.4734-A).
New York’s highest court has ruled that punitive damages are not covered by
insurance. The bills have been amended to narrow the scope of the
insurability of punitive damages by removing personal-line coverages and
other changes. Currently, the bills remain in the respective Insurance
Committees.
Medical
malpractice insurance. Also advanced by ELANY, and supported by PIWA, is
legislation (S.422
sponsored by Sen. Seward and A.29
sponsored by Assemblyman Kevin A. Cahill, D-103) that would remove the
declination requirement by the residual market for medical malpractice
insurance. Currently, doctors and dentists have limited viable medical
malpractice options, as either scandal or onerous government regulation has
limited their choices. Also, risk retention groups, whose New York state
regulation is preempted under federal law, operate freely in New York.
However, well-capitalized, high-rated nonadmitted companies are not
available to New Yorkers under the present statutory regime.
Short-term
rentals of private dwellings. Sen. Rich Funke, R-55, has introduced
amendments to his legislation S.5978-A
that would regulate AirBnB-type rentals. One provision in the amended bill
would mandate minimum insurance by licensed insurance companies. Normally,
PIWA opposes these provisions, and we will speak with the senator to ask
him to eliminate this barrier to the voluntary market.
PIWA
members are encouraged to visit the state’s capitol for PIWA’s “Day on the
Hill,” Monday, May 14. We will seek to advance wholesalers’
interests in the state house. For more information, or to sign up to attend
the event, call (518) 434-3111 or email piwa@piwa.org.
Register today for the PIWA Spring
Reception
Join
PIWA for its 2018 Spring Reception. Don’t miss this opportunity to learn
about your industry and network with peers and company representatives.
It’s all happening Thursday, May 17, 2018, at The
Standard Biergarten, 848 Washington St., New York, NY 10014. Register for the event
today!
What’s next …
Plan
to attend PIWA’s “Day
on the Hill” event, Monday, May 14.
Don’t
forget to register for the PIWA Spring Reception,
Thursday, May 17.
See
the next issue of the PIWA eBulletin in July for more events and
information.
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