Long Islands coastal homeowners availability issue is old news for those of us who deal with it on a daily basis at our agencies. And I, personally, have lost my sexy baritone voice discussing it. As early as the beginning of 2006, I testified before the New York State Insurance Department at a public hearing on the issue. If you remember, that was immediately after Allstates announcement that it would withdraw from the Long Island market. A few weeks ago, I had the privilege of being called to testify on behalf of PIANY again in front of the New York State Senate Standing Committee on Insurance. I have to say I was pleased to see our new insurance superintendent take initiative with these proceedings. The arrogance that Allstate displayed almost two years ago was infuriating. I sensed no respect for the insurance buying public, for our former Superintendent Howard Mills, or even for the department, as Allstate held that it was within its lawful rights to non-renew policies and limit exposure in the region.

Allstate notwithstanding, this most recent meeting had more oomph. During the meeting, Superintendent Eric Dinallo floated the idea of a state regulation that would require insurance companies to set aside a percentage of their premiums in reserve for a new mandatory New York Catastrophe Reserve Fund. Its an honorable idea, and I applaud the move to deal with the high-severity, low-frequency type events that set us off on an ugly cycle of price spikes and then high profits after a catastrophe.

The superintendents plan would make sense in conjunction with a move by the feds to allow tax-deferred treatment for companies cat reserves. Putting aside the problem of how such a dream tax deferral could be realized, one thing Im concerned about is the potential of this plan to benefit large, national companies while possibly hurting their smaller competitors. The big nationals probably can afford to move part of their profits into a reserve account, in contrast to the burden it could have on smaller, regional companies that do business primarily in New York, and may not have the capital to cover such a reserve and remain financially solvent.

I hope the superintendent takes this concern into consideration. We dont want to end up with only a handful of mega-carriers in the United States. Choice and competition is what being a professional independent insurance agent is all about. Its important to remember the significance of regional carriers. They are stalwart supporters of their agents and I want to make sure we recognize their importance to the survival of the independent agency system. You dont have to search far into your memory for examples of how these wiry companies have come through for us. Think back to September 11, before there was a TRIA, when large, national carriers pulled out of the New York market and headed for less risky territory. The small regionals stuck it out and afforded us markets for our clients. Those little tug boats turn faster than the large ocean liners, and they helped us get the job done.

This is one reason Im a big believer in states rights. The big boys would like a federal insurance czar in Washington, D.C., so they can go to one place, with one lobbyist and not have to file and follow regulations in several states. They say it would help them be more efficient and ultimately serve the customer better, but I cant help thinking its a good excuse for the large companies to put pressure on the small companies, too.

In the aftermath of September 11, all the states immediately panicked and allowed companies to eliminate terrorism coverage from their policies. Except for one state, where former Superintendent of Insurance Greg Serio insisted that admitted companies keep it in force. It saved our economy. If there was a federal insurance czar, and the rules applied unilaterally, where would the Empire State and all of our commercial insureds be today?

Bringing us back to the here and now, we are faced with continued challenges that are cause for worry to independent insurance agents. Look at the company mergers and acquisitions our industry is experiencing. True, it may reflect a form of company Darwinism, but it makes me worry. I can list dozens of companies many of us would recognize that are now extinct. Where are we going?

By way of example, I recently spoke with my friends at the PIA of New Jersey, who told me about one of their companies, which had just been taken over by a large direct writer. This direct writer is now telling its agents if they dont give them a minimum of $750,000 they are dropping them. I wonder how this will work " isnt this a form of steering? Now that these companies are getting larger and hungrier, how will they satisfy their stockholders? Thank God for the regional carriers, who, if they survive, may be the champions to independent agents as they were after September 11.

N. Stephen Ruchman is president of Ruchman Associates Inc. in Rockville Centre, N.Y. and a past president of the Professional Insurance Agents of New York State Inc. As an active supporter of PIANY, Ruchman also served as first vice president and vice president of the association. He also chaired PIANYs Convention and Membership committees. He is a member of PIANYs Government Affairs, Nominations and Membership Programs Committees. Ruchman also is chair of the Long Island Advisory Council. He is a member of PIANYs Political Action Committee where he serves on their Executive Committee.