New York Explores Forcing Property Insurers to Cover Taxi Insurance Shortfalls

New York is weighing options to address the insolvency of American Transit Insurance Co. (ATIC), the largest insurer for taxi and rideshare drivers in New York City. Among the measures under consideration is a one-time assessment on property and casualty insurers to cover ATIC’s claims shortfall, which exceeds its assets by $370 million. This step would involve input from stakeholders including the Department of Financial Services (DFS), drivers, and insurers.

At a November meeting with state officials and industry representatives, including Uber, Lyft, and the American Property Casualty Insurance Association, discussions also covered merging state security funds, reducing fraud, and ensuring the long-term health of the taxi insurance market. No definitive decisions were reached, but attendees were encouraged to submit proposals.

Meanwhile, efforts to stabilize ATIC continue, with talks of a sale and potential interest from firms like Marblegate Asset Management and Inshur. However, no credible bids have materialized. NYC’s Taxi and Limousine Commission (TLC) also held a public hearing on proposed changes to insurance regulations, aiming to ensure drivers are covered by solvent insurers.

The situation underscores the challenges in balancing market stability with consumer protection, as any costs passed to insurers might eventually impact policyholders.