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.