The New York Property & Casualty (P&C) Insurance Summit in Albany, hosted by Big I New York and NY First, featured a compelling chat with Adrienne Harris, Superintendent of the New York Department of Financial Services (DFS). In conversation with City & State Editor-in-Chief Ralph R. Ortega, Harris addressed the state’s approach to fostering a stable and competitive P&C insurance market while balancing consumer protections. Below are the key takeaways from the discussion:
Lessons from Other States’ Insurance Challenges
Harris highlighted the struggles in California and Florida, where regulatory constraints on rate setting led to insurers exiting the market, leaving homeowners without coverage. She cautioned that New York must remain vigilant to avoid similar outcomes, ensuring that rates align with actuarial science rather than political expediency. Other states, including Oklahoma, Nebraska, and Illinois, are also experiencing sharp premium increases due to climate-related risks, demonstrating that these challenges are nationwide.
Balancing Market Viability with Consumer Protection
Harris emphasized that DFS works to maintain a delicate balance—encouraging insurers to operate in New York while ensuring affordability for consumers. By leveraging actuarial science, DFS scrutinizes rate filings to ensure they are neither excessive nor artificially suppressed. She stressed that a robust marketplace requires solvent insurers capable of paying claims when needed.
Addressing Emerging Risks: Cybersecurity & Climate Change
The DFS has been at the forefront of cybersecurity regulations since 2017, setting a national model for other states. The department recently updated its cybersecurity regulations to account for evolving threats like ransomware and AI-driven attacks. Harris underscored the importance of insurance providers adapting to emerging risks, particularly in areas like cyber liability and climate-related exposures affecting property insurance.
Strengthening Regulatory Efficiency
Under Harris’ leadership, DFS has significantly improved its internal processes, reducing backlogs of regulatory filings and hiring over 550 new staff members. She emphasized the importance of timely regulatory decisions, ensuring that the insurance industry can function efficiently while protecting consumers.
Making New York More Insurance-Friendly
Harris addressed concerns about insurers leaving the New York market, noting that exits are often due to mergers, acquisitions, or company-specific decisions rather than the state’s regulatory environment. She reaffirmed DFS’s commitment to fostering a stable and competitive insurance landscape through fair rate-setting policies and open dialogue with industry stakeholders.
Combatting Fraud and Ensuring Fairness
Insurance fraud remains a key concern, driving up costs for consumers. Harris discussed DFS’s increased investment in fraud detection, including data analytics to enhance investigations. She also highlighted efforts to prevent discriminatory pricing practices in the life insurance sector, ensuring fairness for all policyholders.
Looking Ahead: Industry Trends and Expectations
Harris cautioned that climate change and geopolitical instability could continue affecting the reinsurance market, leading to higher costs for insurers and policyholders. She urged insurance companies to take a long-term approach to risk modeling and pricing rather than reacting year by year.
Final Thoughts
As DFS continues to modernize and adapt to new challenges, Harris emphasized collaboration between regulators, insurers, and consumers to sustain a healthy insurance market. With a focus on data-driven decision-making and proactive risk management, New York aims to remain a leader in financial regulation, setting an example for other states.
For insurance professionals operating in New York, staying informed about DFS’s evolving policies and engaging in open communication with regulators will be key to navigating the dynamic P&C landscape.