NEW YORK MUNICIPAL INSURANCE RECIPROCAL
Frequently Asked Questions
Q. What is a reciprocal insurance company?
A. A reciprocal insurance company is a licensed, regulated company owned by
policyholders who agree to insure one another. Reciprocals are very similar to
mutual insurers, which are also companies owned by their customers, but they carry
the idea that there is good in like entities sharing practices and benefiting from each
other’s experience. Reciprocals are also very different from stock insurers which
are insurance companies owned by shareholders seeking profits from their
investment.
Q. Is it true NYMIR chose to become an assessable insurance company?
A. Yes. As a not-for-profit insurer, one of the first decisions that the NYMIR Board of
Governors had to make was whether to become an assessable insurer or to subscribe
to the NY State Guaranty Fund (the state fund that comes into play only when an
insurer becomes insolvent). There are pros and cons to both approaches. If
NYMIR decided to join the NY State Guaranty Fund, they would have been
required to pay into the fund each year. In addition, claims settled in the fund are
limited to only one million dollars; whereas NYMIR’s structure would make
members whole at the time of a loss. Conversely, as an assessable company,
NYMIR is only required to pay for NYMIR’s losses (not any other insurer’s) and
only if NYMIR were to become insolvent.
NYMIR has been saving its subscribers millions of dollars for close to 30 years by
not contributing to the Guaranty Fund. More importantly, NYMIR has ensured
that the company remains financially healthy and stable, and enjoys a ratio of
premium to surplus that virtually guarantees that an assessment of its members
remains highly improbable.
Q. How does NYMIR protect itself against assessment?
A. NYMIR has achieved an outstanding record through its insistence upon the highest
underwriting standards, a conservative investment program and sound loss reserve
practices. NYMIR writes to the most conservative actuarial level coupled with a
superior reinsurance program. These practices are reviewed by leading actuaries,
auditors, and rating agencies. A.M. Best, the premier insurance rating agency, has
recognized NYMIR’s efforts by assigning NYMIR an A-(Excellent) rating. This
rating was recently renewed in March 2021.
Q. What are other ways NYMIR maintains its financial stability?
A. NYMIR’s policyholder surplus of close to $90 million consistently increases each
year. This fund is in addition to reserves and reinsurance provided by A++ carriers
that provide an insurance company with an additional source of funds, if it needs to
pay a higher than expected number of claims.
Q. What are some of the benefits NYMIR members enjoy?
A. Since NYMIR is a not for profit insurance company, we are able to share profits
with our insureds. Members have received a return of annual underwriting earnings
for three consistent years.
Q. Who is eligible for the NYMIR program?
A. New York State counties, towns, villages, cities and district corporations (as defined
in Section 2.00 of the New York State Local Finance Law) are eligible for the
NYMIR program. NYMIR’s unique structure makes them one of the longest
operating examples of shared services for New York state local governments.
For additional questions regarding NYMIR or to find out how to get a NYMIR quote,
please contact Karen Buckley at
12 Metro Park Road, Colonie, NY 12205
