Looking back at 2009, there’s little I can say we will remember fondly … at least we have our health. Carriers seem to be focusing more on writing risks at an appropriate premium, rather than banking on the stock market, but the market has turned up (at least for now)— healthy developments, indeed. I just hope the latter doesn’t deter this positive underwriting trend.

We also can be grateful we didn’t have a hurricane this year. As media and experts have pointed out, the dreaded 100-year hurricane can happen any day and more than once in a hundred years. Agents with insureds downstate should educate themselves on C-MAP, because we are going to need it. C-MAP, or the Coastal Market Assistance Program, was established by the New York State Insurance Department and is administered by the New York Property Insurance Underwriting Association to help homeowners in New York’s coastal areas obtain insurance for their homes. Insurance companies voluntarily participate in C-MAP by offering to insure property that they otherwise might not have accepted as a result of proximity to the coast.

To be eligible for C-MAP, a property must be located on the south shore of Long Island or Long Island’s “Forks,” or in Brooklyn, Queens or Staten Island, and it must be within one mile of the shore. If the property is located on the north shore of Long Island, in the Bronx or Westchester, and within 2,500 feet of the shore, it also may be eligible. Homeowners must have received a nonrenewal notice, cancellation notice, or a conditional renewal notice from their insurer. New purchasers of shore property can apply as well, if their property meets the geographic criteria.

While many companies will write coastal risks on Long Island, the market is for million-dollar+ homes. I really think the insurance companies should reconsider their position on C-MAP, step up and fill the need for coverage; especially for homes in the $500,000-$800,000 category. If companies would only participate in CMAP by offering wrap-around policies, the bulk of the property exposure remains with NYPIUA, and the wrap + NYPIUA approach has been improved to address coverage “gaps.” It’s a good idea to be prepared with an optimal amount of C-MAP participation for the worst-case scenario. Then, when the 100-year storm does arrive, everyone won’t be running around like chickens with heads cut off.

I’m pleased to note that in addition to being a high-priority issue for PIANY members this year, the issue of coastal homeowners’ insurance affordability and availability also is important to the NYSID. Superintendent of Insurance James Wrynn said as much during his comments at the PIANY-sponsored CEO Conference in Albany late this fall. In the local market, Wrynn said, he remains concerned about availability of coastal homeowners insurance on Long Island—a remark that prompted applause from agents in the room. The superintendent said the NYSID is “generally supportive” of uniform hurricane deductible triggers (an issue PIA has advocated for years). He expressed reservations about requiring insurers to set up segregated surplus reserve accounts on their own, an idea floated by his predecessor, former Superintendent Eric Dinallo. However, he said the NYSID is actively researching the possibility of a state or regional fund to handle catastrophe loss. “Creating a separate vehicle and a real pool or fund could allow reserves to build up without having to be distributed or taxed—it’s something we’re exploring pretty aggressively,” Wrynn told the conference participants.

I called for such a state fund in this very column a few years ago, when Mr. Dinallo proposed a national catastrophe fund for insurance companies. My primary concern was regarding the large national companies and how we could ensure the money from our state was distributed equally, rather than funding the losses in California or in other places across the country. The first principle of insurance I learned was spread of risk and that’s how companies operate, either through reinsurance or other means: I can remember only two or three major hurricanes as a life-long resident of Long Island; yet California seems to be on fire every year. Are we, the insureds of New York State, to believe money for a national catastrophe fund would stay here in our state? It’s yet another argument for state oversight. Wrynn is scheduled to speak again at PIANY’s Metropolitan Regional Awareness Program, Thursday, Jan. 28, at the Marriott Brooklyn. We look forward to hearing his thoughts on this and other issues on our 2010 agenda.

While I’ve been talking about coastal insurance, I really think a common, carrier- neutral trigger on windstorm or hurricane coverage would benefit us all. Right now, many companies have different triggers to put a policy into force. Attorneys will have a field day when that mega hurricane hits, if we haven’t established a common trigger. Of course, this would benefit policyholders, but equally important, it would avoid an E&O nightmare for agents ... Imagine telling one customer he does not qualify for coverage of damage that is identical to his next-door neighbor’s that was caused by the same storm!

PIANY plans to reissue its survey of coastal homeowners insurance, arming your association to provide real market data for policymakers as they tackle this issue. The PIANY conducted a survey in 2007, and it found that downstate agents were seeking alternative sources of coverage, as many of their regular homeowners insurance companies continued to reduce exposure in their areas. The survey found that use of the residual market to insure coastal homes was climbing, with 51 percent of agents saying they sometimes use the NYPIUA in 2007; compared to 47 percent in 2006; and 41 percent six months before that.

I encourage members to participate in PIANY’s 2010 coastal survey, so your association has examples to demonstrate the need for uniform triggers to regulators. And, I’m looking forward to participating on the NYSID’s Temporary Panel on Homeowners’ Insurance Coverage, convened by the Superintendent of Insurance for 2010 to examine and address homeowners’ insurance and catastrophe coverage in an advisory capacity. If you have input on this market let us know!