New York Gov. David A. Paterson wants to revive the state’s global insurance exchange, seeking to mirror the operation of Lloyd’s of London.

David&nbspPaterson

The governor proposed the recreation of the insurance exchange during his second State of the State address, where he announced several fiscal reform measures.

In what his office calls “a bold initiative” to maintain New York’s status as the financial capital of the world, Paterson is calling for the creation of a revived New York Insurance Exchange (NYIE). A similar initiative was launched in 1980, but folded within seven years.

Paterson’s office said the new NYIE would emulate the approach of Lloyd’s of London, bringing buyers and sellers of complex commercial insurance together, providing more transparency and security for those involved. The program would also stimulate the economy, according to the governor, by increasing the flow of capital and insurance premiums to New York.

“By bringing together buyers and sellers of complex commercial insurance, the exchange will reaffirm our status as the hub of international trade and finance and it will also curtail the unregulated transactions that devastated the global economy,” Paterson said in a statement. “New York was the epicenter of so much that went terribly wrong in 2008. It is our responsibility as New Yorkers to lead in the rebuilding and reform of these vital global markets.”

Like Lloyd’s, which brings together those with great exposure to risk and those with capital in what the firm calls a “face-to-face” market, the NYIE would target some of the world’s largest and complicated risks, officials said.  Lloyd’s notes some of these great risks as everything from oil rigs to celebrity body parts, from sporting events to global banks, according to their website.

The New York Times reports that the new initiative could generate between 2,000 and 3,00 jobs for market participants and regulators.

The Professional Insurance Agents of New York, a trade group, welcomed the return of the exchange.

“The reintroduction of the NYIE will help stimulate a struggling New York state economy,” said Kevin M. Ryan, president of PIANY, in a statement. “An exchange would provide the opportunity to bring much-needed business activity back into the state.”

The original NYIE was envisioned as the Americanized iteration of Lloyd’s. It provided a central market for brokering and underwriting risk. By 1984, the NYIE was ranked as the eighth-largest U.S. reinsurer. However, due to unfortunate timing, unforeseen losses in the product liability market caused the exchange to close its doors after seven years.

The PIA, which represents professional, independent insurance agencies, brokerages and their employees throughout the state, said reintroducing the exchange would help keep insurance dollars stateside, as opposed to sending them to international reinsurance markets.

“The insurance marketplace is much different today than in the 1980s,” said Ryan. “It’s much more sophisticated, making it likely that the NYIE will be a success.”