Tuesday, October 29, 2013

New York Issues Post-Disaster and Natural Catastrophe Regulatory Guidance

On October 28, 2013, the New York State Department of Financial Services issued Insurance Circular Letter No. 8 (2013).  This regulatory guidance apprises insurers of the the various post-disaster regulatory measures they should anticipate in the future.  Of course, the listing is only an example of regulatory measures that might be employed, with others available via statute and emergency powers of the Superintendent (e.g., suspending provisions of statutes or regulations).

The Circular Letter lists five categories of possible post-disaster regulatory action.  First is a moratorium on policy cancellation or non-renewal for non-payment of premium.  Essentially, the DFS is asking carriers post-disaster to work with insureds and not go by the strict terms of the insurance contract when an insured may have trouble making premium payments post-disaster.  After Sandy, the DFS prevented cancellation or non-renewal for any reason, which had the unintended effect of precluding carriers from ridding themselves of policies they no longer wished to write having nothing to do with the affects of the storm.  If limited to non-payment of premium issues because of a disaster, there is less likelihood that normal commercial behavior will be affected.

Second, the processing of claims should be done promptly and efficiently.  This goes without saying, but you may recall that the DFS required adjusters to act on claims within very short time periods and put up a "report card" on the DFS website to show those who were not complying.  The suggested actions in this section of the Circular Letter are obvious, but use the word promptly, which goes undefined.  Related to claims is the third item, which is expediting the process for adjuster licensing.  This allows for adjusters to come into New York and begin working when a large disaster like Sandy strikes. 

The forth area discussed is claim data reporting.  This goes back to re report card concept.  Essentially, the DFS is saying that the sun will shine on post-disaster claim activity for all to see.  The last area discussed is mediation.  Establishing a mediation program to resolve claims post-disaster is a concept that was used after Sandy and has been used after many disasters. 

By this Circular Letter, the DFS is telling insurers that these and other measures are likely to be seen again when disaster strikes.  Thus, insurance company compliance and readiness to address each of these features and similar programs should probably become part of a carrier's internal disaster plan.

Tuesday, October 22, 2013

It's Not Paranoia to Be Prepared to Keep Your Family Safe

Having a plan in the event of a catastrophe can mean the difference between life and death. As it seems that the world has been displaying more viscous behavior as of late, being prepared can help keep your family safe. Having the right equipment on hand can greatly increase the chances of survival as well as reduce some of the stress of the situation. What kind of items should you store in order to prepare for these random events? 1. Water - Water is the most important substance in any situation. Even floods will require you to have fresh water on hand. Contamination of public services can be easily accomplished during a flood and you need to have a method to keep yourself and your family hydrated. There are packets you can buy in bulk that can be stored in your home to be used for just these occasions. They can also double as a method to keep yourself hydrated while out for a bike ride or mountain hike. 2. Medical Supplies - There are many kits you can buy that can be stored in the home in order to be used in emergency situations. Some will go so far as to fill various multipurpose backpacks with medical supplies. Even a slight wound could be dangerous if not treated correctly as infections could easily turn into blood poisoning. 3. Food - Although many people may scoff at those who hoard food in the basement, it is these people who will have an increased chance of survival in the event of a dire emergency. Non-perishables such as canned goods have a very long shelf-life and can mean the difference between starvation and sustainability. It wouldn't hurt to add seeds to this collection of food as well for you never know how long a situation may last. 4. Warmth - Having a method to keep warm is a dire need especially during the winter months. Extra sets of warm clothing and blankets should be kept on hand in the event of a disaster happening during the coldest times of the year. It may not be a bad idea to include a solar heating device as well to your collection. Although they will require intense light to be utilized, they can still help keep yourself and your family warm throughout the day. 5. Communication - In the event of a power outage during an event, you need to have a method of communication. Most survival kits include small radios or even broadcast radios such as those in semi-trucks. Thanks to technology, you can get solar powered or hand-crank radios that don't require additional batteries should they go dead. It may not be a bad idea to have a solar charging unit for your cell phones as well. If the power is off for more than a day, your phones could become useless as there won't be a method to charge them. In an emergency, having the right tools on hand can keep yourself and your family alive. Depending on the situation, the above items could prove to be quite useful. The last thing you want is to be without an important item in case nature decides to rampage across your area. What kind of preparations have you made to protect your family in the event of a crisis situation? This is a guest post by Liz Nelson from WhiteFence.com. She is a freelance writer and blogger from Houston. Questions and comments can be sent to: liznelson17 @ gmail.com.

Friday, September 20, 2013

Surviving Floods: Anything Can Happen

If the 2013 floods of Colorado have shown us anything, it's that disaster can happen to you no matter where you are. Even areas that avoided the actual rain storms have been devastated as those flood waters ran the course of the Platte River for hundreds of miles. This is just a short time after the 2012 storm of Hurricane Sandy which devastated the Eastern seaboard and beyond. Don't assume that your area is safe from the circumstances that surround a freak storm.

It's always best to prepare yourself and your family for the worst case scenario. It doesn't make you a pessimist if you plan for the worst but hope for the best. It makes you responsible for yourself and your family. In today's world where storms are growing more deadly and frequent, you need to have a plan. What can help you survive a flood in your area?

1. Clean Water - As odd as it may sound, clean drinking water is a must for those who are experiencing a flood. Those waters that are consuming your town can be contaminated as sewage and other chemicals can be intermingled. As survival water pouches are fairly cheap, it wouldn't be a bad idea to have some on hand in an emergency.

2. Cooking Food - During a flood, it is quite possible that your area could experience a power outage as power substations could become submerged. Although a fireplace can easily cook food as well as a stove, not every home is equipped with one. If you are unable to vacate the area, using solar stoves or potpourri candles can help keep your food warm. In fact, a potpourri tea-light can heat up a nice hot cup of instant coffee in just a few minutes.

3. Non-perishables - Storing food is common practice for many households. Canned goods are the most common for they have a much longer shelf life and can survive floods, hurricanes, tornadoes and earthquakes without compromising the quality. A can of food can remain submerged in flood waters for years without damaging the contents within the can.

4. Communications - Smartphones are a way of life for many people across the globe. However, do you have means to charge the phone if the power is out? Solar battery packs can be bought for your survival kit that can help keep your communication devices powered. Depending on the type of storm you are experiencing, the relay station for phone service could be compromised as well. A solar charging or hand-crank powered radio is also a wise addition to your survival gear.

5. Evacuation Plan - Most importantly, your family should have an evacuation plan if the members are ever separated. You need to establish a "safe-house" that everyone in the family knows about. It may not be a bad idea to have a secondary location planned as well in case the first one is subjected to the disaster itself.

Being swept away by flood waters is different than rafting down the rapids of a raging river. Stones in the river are stationary unlike the debris during a flood that is floating which can cause severe bodily harm. Not subjecting yourself or your family to such instances will always be the best course of action. It's not paranoia if you would rather protect yourself or your family than become another flood statistic and evacuate the area prior to the flood reaching you.

Author Bio:
This article is contributed by Madoline Hatter. Madoline is a freelance writer and blog junkie from ChangeOfAddressForm.com. You can reach her at: m.hatter12 @ gmail. com.

Tuesday, August 20, 2013

Hurricane Sandy Rebuilding Task Force Report Released

The federal government's Hurricane Sandy Rebuilding Task Force released its report this week.  The Report is a comprehensive look at how federal, state, and local governments can come together and rebuild from disasters like Sandy.  The Report includes a Fact Sheet showing the progress today and the Report itself, which spans 200 pages.  The Executive Summary describes the goals of the Report, including establishing guidelines for the investment of the Federal funds made available for recovery and sets the region on the path to being built back smarter and stronger with several outcomes in mind:
  • Aligning this funding with local rebuilding visions.
  • Cutting red tape and getting assistance to families, businesses, and communities efficiently and effectively, with maximum accountability.
  • Coordinating the efforts of the Federal, State, and local governments and ensuring a regionwide approach to rebuilding.
  • Ensuring the region is rebuilt in a way that makes it more resilient – that is, better able to withstand future storms and other risks posed by a changing climate.
The Task Force recommentations include: 
  • Promoting Resilient Rebuilding, Based on Current and Future Risk, Through Innovative Ideas;
  • Ensuring a Regionally Coordinated, Resilient Approach to Infrastructure Investment;
  • Providing Families Safe, Affordable Housing Options and Protecting Homeowners;
  • Supporting Small Businesses and Revitalizing Local Economies;
  • Addressing Insurance Challenges, Understanding, and Accessibility; and
  • Building Local Governments’Capacity to Plan for Long-Term Rebuilding and Prepare for Future Disasters.
This Task Force Report is a giant step forward in coordinating federal, state, and local disaster mitigation and recovery plans.  Please make it part of your required reading. 

Wednesday, July 17, 2013

Natural Catastrophe Developments

There have been some interesting developments in the world of natural catastrophes and disasters worth discussing.  First, in Europe, a vehicle meant to address the reoccurring flooding risks has been created.  It is called Flood Re.  Flood Re is a scheme (currently based on a memorandum of understanding) devised between the Association of British Insurers and the government of the United Kingdom that allegedly will insure that flood insurance remain available and affordable.  Essentially, it is a not-for-profit flood fund run and financed by insurers, which will cap flood insurance prices. Premiums will be linked to tax bands ensuring support is targeted at those on lower incomes.

Flood Re will charge member firms a levy on homeowners' premiums.  It is designed to deal with at least 99.5% of flood years. Even in the worst half per cent of years, Flood Re will cover losses up to those expected in a 1 in 200 year-a year that would be six times worse than the flooding that occurred in 2007.  It is expected to launch mid-2015.  Apparently, there are many details yet to be worked out and there has been some criticism of the scheme.

On concern expressed is the interesting caveat added by the government that if Flood Re fails to work, especially if through insurance industry hesitation, every homeowners' insurer will be mandated to offer flood cover on terms set by the government.  Flood Re is different than the US Federal Flood Insurance Program, but only time will tell whether its results will be better.  The good news is that governments are thinking proactively on how to address natural disasters caused by flooding.
The second development is the announcement by the Metropolitan Transit Authority (New York, New Jersey, Connecticut) of the preparation of a catastrophe bond triggered by only storm surge.  This the first of its kind and the first Cat Bond issued by the MTA.  What makes it unique, as the linked article above indicates, is that it is insuring a new peril -- storm surge -- which has not been done before.  There have been many Cat Bonds for windstorm, hurricanes, tornadoes, even thunderstorms, but not a bond that triggers solely on the height of a storm surge from a named storm.  Many see this as an innovative and welcomed development. 
We would be interested in hearing comments from you about these new government efforts to address natural disasters and others you might be aware of.

Friday, May 31, 2013

2013 Hurricane Season Is Upon Us

June 1 begins the 2013 hurricane season and the prognosticators are predicting an "active" hurricane season.  Concurrently, a recent report prepared by CoreLogic shows that New York is near the top of the list for potential storm surge damage to property.  The report entitled "CoreLogic Storm Surge Report" sets out data for residential property throughout the US and matches property values to likely damage caused by storm surges brought on by hurricanes and other tropical storms.  Coastal residences across the US in storm surge danger total $1.1 trillion in potential exposure.  Most of these homes are covered by homeowners insurance and, hopefully, flood insurance.  An active hurricane season can mean a significant insured loss for the homeowners' insurance market and another disaster for the National Flood Insurance Program.

Key highlights of the 2013 CoreLogic analysis include:
  • There are more than 4.2 million residential properties exposed to storm-surge risk valued at roughly $1.1 trillion, with more than $658 billion of that risk concentrated in 10 major metro areas.
  • Florida tops the state rankings with nearly 1.5 million properties at risk and $386 billion in total potential exposure to damage.
  • Louisiana ranks second in total properties at risk with just over 411,000 homes in storm-surge zones. New York ranks second in total value of coastal properties exposed at nearly $135 billion.
  • At the local level, the New York metropolitan area, which encompasses northern New Jersey and Long Island as well, contains not only the highest number of homes at risk for potential storm-surge damage, but also the highest total value of residential property exposed, at more than $200 billion.
The report also goes into climate change and its affect on residential coastal properties.  The scary part is that the values discussed in this report only reflect residential properties.  Add on commercial property, governmental property, and the collateral damage caused by the type of disruption that occurred in the aftermath of Sandy, the numbers increase exponentially. 

There has been a lot of rebuilding and retrofitting going on in NY and NJ and CT after Sandy.  The NYC Transit Authority just started running the A train to Rockaway (and has installed a seawall to protect the tracks from storm surge arising in Jamaica Bay).  Let's hope the efforts to rebuilt with resiliency work and that we pass the 2013 hurricane season with a minimum of harm.

Tuesday, May 21, 2013

When Tornadoes Strike

All of us at TIPS and the TIPS Task Force on Disaster Preparedness and Response are saddened by Monday's events and send our best wishes and offers of help to those struggling to cope with the devastation of Monday's tornadoes.   Tornadoes, like hurricanes, earthquakes, and other acts of nature, can cause significant personal and commercial harm.  Those who live in tornado country have long since had preparedness and response plans for tornadoes.  But the devastation caused by Monday's tornadoes can sometimes scrap well-made plans. 

As the search and rescue goes on, the local communities will assess the preparedness and response that took place and make refinements to those plans.  While the tornado drills help and keep people - especially children - calm, nothing can prepare for the collapse of buildings and roofs on top of people.  And it is the first responders who need to be thanked for immediately rushing to the schools and other buildings to pull people out as quickly as possible.

Those living in what they call Tornado Alley typically have tornado shelters and local communities have tornado sirens that warn of approaching storms.  In discussing the storm yesterday, the Governor of Oklahoma remarked that after a tornado hits, people must continue to listen to the weather forecasts because follow-on funnels may pop up and surprise those left exposed by the earlier destruction.  Other preparedness tips include having:
  • Food for seven days and keep in mind you may not have the means to heat or otherwise prepare the food, so it must be where it can be literally eaten from the can or package
  • Medical supplies and include any medications that must be taken on a daily basis (maintenance medication)
  • Two thermal (Mylar) blankets for each person, one to wrap in and one for ground cover
  • Rain gear for each individual
  • Insect repellent and netting if applicable
  • Tools and materials to make emergency repairs to the home to include waterproof tarps, plastic, tape (duct), and/or plywood sheeting.
FEMA has a tornado preparedness page at http://www.ready.gov/tornadoes.  The Red Cross has a free Tornado App for download.

Be safe and be prepared, and don't be a hero.  A Tornado warning is nothing to laugh about.

Thursday, May 16, 2013

The Cost of Disasters

The cost of disasters worldwide and on a national level are rising.  A new UN report released on May 15 puts the cost of natural disasters at $2.5 trillion so far for this century.  The study was conducted by the UN International Strategy for Disaster Risk Reduction.  The study focuses on businesses and their failure to take adequate catastrophe-proofing precautions.  Interestingly, one of the comments relates to insurance and states that insurers only cover a segment of the risk.  In emerging markets, insurance coverage may be less than 10% of the risk compared to insurance coverage of 90% in the US for businesses.  Global companies need to consider the possibility of natural disasters when considering facilities in emerging markets and to look at more than the political and market risks, currency fluctuations, or litigation.

These are very interesting comments.  Clearly, insurance does not cover everything (even all-risk policies have exclusions).  Financial reporting is now forcing companies to consider climate change issues and may soon require consideration of the risk of natural disasters to assets in areas prone to natural disasters.  Something for all businesses to consider when locating plants, offices, distribution centers, and other facilities.

In New York, the cost of Superstorm Sandy is being mitigated by a home buyout plan.  but recent reports indicate that the buyout plan is going to be much smaller than originally proposed.  This means that a repeat of Sandy for those who stay and rebuild is possible.  This raises the cost of disasters on insurers and the government and precludes the lofty goal of reshaping the shoreline to avoid clean-up costs.  Buyouts and returning shoreline to nature in concept is an interesting and less costly option than rebuilding and suffering another disaster.  But in developed shoreline communities, it is difficult to convince landowners to accept a buyout and move to higher ground.  One expert commented that this is a new program and it has to start slowly and hopefully build momentum for future buyouts.

We welcome your comments.

Tuesday, April 9, 2013

Free Webinar for ABA Members: The Insurance Response to Disasters - April 15, 2013

The Tort Trial & Insurance Practice Section of the American Bar Assocation is sponsoring a free webinar on The Insurance Response to Disasters:  Considerations for Insurers and Businesses on April 15, 2013.  The webinar will cover the following: 
Superstorms, hurricanes, drought, floods, wildfires, tornados - the past year has seen a surge in catastrophic events in the United States. This in turn has led to unprecedented levels of insured losses, which for Superstorm Sandy alone were recently estimated at over $28 billion. These losses create tremendous operational and financial risk for impacted business, while subsequent response efforts can create a "double-dip" of risk in the form of large intangible losses in management time, effort, and loss of focus on core business activities.

Whether representing insured businesses with catastrophic losses or carriers responding to subsequent claims, understanding the complexities facing both sides - best practices for policyholders in responding to losses and how the insurance industry responds to these disasters - can be key to resolving these complex insurance claim issues.

This panel discussion features speakers from both the insurer and policyholder perspective who will discuss:
  • Best practices for insureds in responding to a catastrophe and mitigating losses
  • Preparation and submission of the insurance claim
  • The insurer's expectations for and response to the claim
  • Best practices for businesses in planning for the next disaster, including proactive review of coverages and optimizing financial recovery
Speaking are:
Pamela A. Palmer
Morris Polich & Purdy
Los Angeles, CA
Iain MacBean
Executive Director
PWP International LLC
Miami, FL

Jim Paskell
President and Founder
Litigation and Liability Management, LLC
Solon, OH

James Tortorella
Aon Global Risk Consulting
Chicago, IL

Tuesday, March 19, 2013

Is a National Catastrophe Fund Possible?

Among the ideas to address disasters and their aftermath is the creation of a national catastrophe fund.  Catastrophe funds have been around on a state basis for a reasonable period of time.  Florida has one.  Texas has one.  There are some others.  A regional or national catastrophe fund is a much bigger idea with much greater benefits and issues than the existing local catastrophe funds.

That brings us to HR 1101, a bill to create a national catastrophe fund using private insurance on a pre-funded basis to protect against national catastrophes.  As with everything, the devil is in the details and the details are not fully clear.  Certain insurer groups back the concept of a pre-funded catastrophe fund, but other insurer groups oppose the bill claiming that it would put an unnecessary burden on the taxpayers.  Considering that elements of the insurance industry are on both sides of this controversy, it will be interesting to see if a compromise can be reached. 

Addressing disasters with a pre-funded catastrophe fund with some federal backup is an idea that has been floating around for some time.  With a true disaster that overwhelms local resources, a multi-level approach to recovery and response is necessary.  Disasters are coming with much more frequency so those debating the various ways of addressing disasters need to find a common ground and come up with a comprehensive plan to address catastrophes before the next one strikes leaving us all unprepared.

Wednesday, February 27, 2013

Unintended Consequences Hampering Recoveries From Disasters

When disasters strike, many people line up to volunteer to assist with the recovery.  When natural disasters like hurricanes strike and destroy or damage homes and businesses, members of the design community mobilize to assist local governments in inspecting homes and buildings to determine whether they are safe, need repair, or should be demolished.  Such was the case after Superstorm Sandy.  Hundreds of architects and engineers mobilized to assist local building department officials in their communities in assessing the structural viability of the tens of thousands of homes that were damaged in Staten Island, Brooklyn, Queens, and elsewhere.

But something happened shortly after they mobilized.  They assessed what occurred in the aftermath of the terrorist attacks on the World Trade Center on September 11, 2001, and took a step back.  After September 11th, contractors, architects, engineers, and others all mobilized to assist in the recovery efforts at the WTC site.  They did this with no thought to the potential consequences of their participation in making decisions about how the demolition and clean-up of the site would go.  And they found out that for their heroic participation in helping with the recovery and clean-up efforts, they were thanked by being named as defendants in the thousands of personal injury lawsuits that were brought by clean-up workers and others alleging injuries arising out of the clean-up at the WTC site and related lower Manhattan buildings.

With that memory fresh on their minds, the architects and engineers who could have assisted the local communities in assessing the damage to homes and businesses went back home because they did not want to become defendants again based on their efforts to help with a post-disaster recovery.  The pain and expense of being sued was not worth it to them to get involved.  Architects and engineers are not covered under New York's Good Samaritan laws and with no protection and no agreement by any municipal authority to hold them harmless and indemnify and defend them from tort suits, they stood on the sidelines. Crain's New York has a great story on this.

This unintended consequence of mobilizing professional volunteers to assist in disaster recovery affected the ability to inspect and classify homes and commercial buildings as quickly as would have happened had the fear of lawsuits been absent.  Efforts have been made to include design professionals under a Good Samaritan-type law, but in New York, so far those efforts have been blocked.  According to the Crain's article, 24 states, including states on the Gulf Coast, have laws that protect building and design professionals from lawsuits when they come to the aid of disaster victims.

Recovering from a disaster like Superstorm Sandy requires has many hands as possible in the stricken communities.  Even today, months later, homes are not rebuild, insurance funds have not been paid to everyone, and families are still unsure when or whether they will ever be able to rebuild.  When those who can help are afraid to help because they might find themselves on the receiving end of tort claims, there is something wrong.  There is a bill in the New York Assembly to address this issue.  A04380 is a Good Samaritan law for building and design professionals.  The purpose of the bill, if passed, is:

"To provide professional engineers, architects, landscape architects and land surveyors immunity from liability for providing volunteer services funding during times of crisis and catastrophe. Such immunity would not be applied in cases of wanton, willful, or intentional misconduct, nor to services provided after 90 days of the emergency. This legislation shall not affect the liability of any government which requests a volunteer to perform these services."

You decide if this makes sense.  Many other states believe it does.  If you are sitting in Rockaway with your house still a wreck because you couldn't get it inspected properly and can't afford an engineer or architect to help you figure out if you can rebuild, you probably think it makes sense also.

Let us know what you think.

Friday, February 15, 2013

Claims Changes in the Wind?

The aftermath of Superstorm Sandy is still being felt throughout the New York, New Jersey, Connecticut coasts.  Claims payments, especially for flood insurance, are not coming as quickly as some would like.  Banks, with mortgages on damaged properties, are holding up checks causing inquiries by government officials to be made.  And regulatory and legislative changes are being considered throughout the region that, if enacted, will affect how claims are handled in the future.

Shortly after Superstorm Sandy, New York enacted an emergency regulation requiring claims arising from the storm to be handled on an expedited basis.  Inspections by insurance companies on claims had to be made within six days of notice of claim instead of the normal fifteen days -- a time frame large insurers said was impossible given the number of claims and the number of insurance adjusters.  A report card was and continues to be posted on the website of the New York Department of Financial Services on claim responses.

New York also issued a circular letter that allowed claims to be made and documented without first having to wait for an adjuster's inspection.  Some of the text of the circular letter stated as follows:

Accordingly, insurers must accept homeowners' documentation of losses rather than requiring an inspection first where an immediate cleanup is reasonably necessary to protect health and safety, or protect further damage to property.

For claims under homeowners' insurance, if dwelling debris must be removed before the adjuster is able to examine it, insurers should accept as proof of loss documentation such as photographs, videos, material samples and inventories prepared by policyholders as alternatives to formal inspection.

Now New Jersey is considering amending its insurance law to allow for a private right of action for bad faith claims practices against insurance companies.  Coupled with governmental pronouncements about the applicability of hurricane deductibles and the consideration of changes to the anti-concurrent causation clause in many homeowners' policies, there may be big changes for insurers and consumers coming in the wake of Superstorm Sandy.

These developments are important to watch because they will have an impact on the availability and affordability of insurance for communities in areas now clearly exposed to disasters caused by hurricanes and other cyclonic events.

Friday, January 18, 2013

New York State 2100 Commission Report - Building Resilience in New York

On November 15, 2012, New York Governor Andrew Cuomo convened the NYS 2100 Commission in response to the recent severe weather events such as Superstorm Sandy, Hurricane Irene, and Tropical Storm Lee. Tthe commission was asked to recommend actions to be taken to prepare New York to more effectively respond to, and bounce back from, future storms and other shocks.

On January 11, the Commission issued its first report, entitled Building Resilience in New York.  If you have any interest in a detailed plan to address disasters, you should download this report and read it.  It's long (over 200 pages), its detailed and documented, and it covers concrete recommendations for transportation, energy, land use, insurance, and infrastructure finance. Additionally, the report highlights nine major cross-cutting recommendations that are relevant to multiple sectors and systems:
  • Protect, upgrade, and strengthen existing systems
  • Rebuild smarter: ensure replacement with better options and alternatives
  • Encourage the use of green and natural infrastructure
  • Create shared equipment and resource reserves
  • Promote integrated planning and develop criteria for integrated decision-making for capital investments
  • Enhance institutional coordination
  • Improve data, mapping, visualization, communication systems
  • Create new incentive programs to encourage resilient behaviors and reduce vulnerabilities
  • Expand education, job training and workforce development opportunities
The insurance section recommends state-level risk management, consideration of options to pre-fund disaster recovery and transfer catastrophic risk to capital markets, promote investment in risk mitigation, improve consumer awareness and education, prevent underinsurance for flood risk and certain covered perils, expand business interruption coverage, provide catastrophe response services, and promote a Comprehensive Insurance Emergency Measures Act.

In the insurance area, the Commission found the following problems:
  • In the event of a disaster, consumers are unaware of what damage their insurance covers and there is confusion over deductibles and policy exclusions
  • Risks are managed separately and without a unified scope across the state's various agencies and authorities
The insurance recommendations are wide in scope and are detailed at pages 147-57 of the report.  Consideration of a pre-funded disaster recovery program through the capital markets and insurance is one of the more significant options being considered for New York (similar to cat funds in other regions like the Alabama State Insurance Fund and the MultiCat Mexico program).  The Commission is urging the Department of Financial Services to study the use of anti-concurrent causation clauses.

This is a report worth studying.  It is one of the few responses to disasters that provides this level of detail.