Aug 17, 2012

PIANY protests Cuomo's veto of state agency mailing bill

After being barraged repeatedly with advertisements for direct writers in official Department of Motor Vehicle vehicles registration renewal notices, professional insurance agents took action through PIANY to stop the inappropriate practice and convinced the Legislature to pass a bill prohibiting the practice. The proposal successfully passed both houses of the state Legislature in two consecutive sessions, but today Gov. Cuomo, for the second time, vetoed the bill.

The governor pointed out technical flaws with the first iteration of the bill, rejecting it because it may have restricted the ability of state agencies to advertise their own programs. However, this year the proposal was redrafted and reintroduced specifically to allow state agencies to make contracts for including third-party advertisements in their mailings to the public, but those contracts would not be allowed to include advertisements relating to the agencys authority, mission or subject matter unless the ads are designed to promote the agencys programs, facilities or operations. The message sent by Cuomos veto is loud and clear: New Yorks official endorsement is for sale to the highest bidder, regardless of the appearance of impropriety.

This bill (S.6285-A/A.9034-B) is designed to prohibit state agencies from disseminating ads to the public for products or services that relate to the subject matter of the state agency (such as GEICO advertisements alongside vehicle registration renewals). Weve all seen them, and for small businesses in New York trying to compete with these large national direct writers the practice is infuriating.

This is one instance in which selling advertising to bring cash into state coffers clearly has gone too far. Through this practice, the DMV is tacitly endorsing that people buy compulsory automobile insurance from a particular source, and by refusing to prohibit it, Gov. Cuomo sends the message that this is a perfectly acceptable practice.

Regardless, the law needs to be changed to demonstrate the states commitment to eliminating the appearance of inappropriate endorsements. The Legislature, by passing this bill in two consecutive sessions, has twice sent a clear message that these types of practices are improper and should be illegal. The fact of the matter is that New York enjoys a healthy automobile insurance market and consumers have numerous companies from which to choose. That choice, however, should be free from the inappropriate influence of any state agency.

PIANY is a trade association representing professional, independent insurance agencies, brokerages and their employees throughout the state.

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