FOR IMMEDIATE RELEASE

ALBANY, N.Y., Sept. 16, 2016—The New York Insurance Association, Inc. (NYIA) presented its argument on appeal to the New York Appellate Division, Third Department regarding New York State’s illegal diversion of insurance assessments to fund noninsurance programs.

This assessment on insurers is called a 206 (formerly 332) assessment and by law is strictly for expenses of the insurance division of the New York State Department of Financial Services (DFS). The state has been deviating from this law and transferring assessment money to other state agencies to fund programs unrelated to the regulation of insurance.

“New York’s domestic insurance companies continue to be unfairly singled out as the sole source of funding for programs that may be worthy, but cannot legally be funded by this assessment,” Ellen Melchionni, president of NYIA said. “This is a back door tax on one industry to fund programs intended for the general public.”

When NYIA’s lawsuit was commenced in 2010, the state budget included nearly $455 million in assessments on insurers with $317 million in transfers to other state agencies. The illegal transfers remained at the $300 million mark until 2015, when they were reduced to $170 million and further reduced to $150 million in 2016.

“While we recognize and appreciate the Governor and Legislature’s actions in the last two state budgets to reduce these illegal transfers, the fact remains that insurers are still being illegally taxed to the tune of $150 million a year,” Melchionni said. “This budgetary sleight of hand can no longer be tolerated.”

The insurance industry is a vital component of New York’s economy, providing financial security to millions of New Yorkers, contributing $40 billion in economic output, employing nearly 200,000 residents and investing more than $18 billion in New York municipal bonds.

The New York Insurance Association, Inc. (NYIA®) is a state trade association that has represented the property and casualty insurance industry for more than 130 years.

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Contact:

Cassandra Anderson, NYIA

(518) 432-4227 or (518) 312-3315

Media Release (PDF)