"Nearly all states have adopted risk-based capital as the minimum capital standard for property-casualty insurers," said Mr. Serio. "While I applaud the progress the State Senate has made in passing this important legislation, I urge the Assembly to take action and give the Department the necessary tools we need for earlier intervention into troubled situations."

He added that New York "is at a disadvantage by not having this standard and its accompanying regulatory remedies in order to assist in fulfilling our financial solvency oversight role."

"The economic challenges arising out of Sept. 11, the financial collapse of Enron, and allegations of compromises in the independence of public accountants auditing financial statements have caused all financial regulators to be more concerned and aware of all aspects of the financial condition of insurers," Mr. Serio noted.

The standards in the bill, he said, "provide a powerful tool to measure capital adequacy and will enable the department to more effectively employ statutory remedies. The use of risk-based capital standards allows for earlier detection of possible financial difficulty and gives the department greater flexibility to more rapidly assist in restoring financial health and minimizing exposure to the state's security funds."

Mr. Serio said risk-based capital standards are designed to establish minimum capital requirements based upon the risk applicable to the operations of property-casualty insurers.

The standards, he said, consider industry performance, individual insurer characteristics, and the allocation of reserves and premiums among insurers. Risk-based capital standards are intended to strengthen the safety net that statutory surplus currently provides for policyholder obligations, the department explained.

The department's bill, with proposed new risk-based capital standards for p-c insurers, is sponsored by State Sen. James Seward, R-Oneonta, the State Senate Insurance Committee chairman. The bill passed the Senate on March 5.