Possible Lapse In NFIP—Here
We Are Again!
As we've reported earlier, the 115th Congress has been unable to pass
legislation to fund the NFIP for more than a few weeks or months at a time
since its most recent long-term expiration date: Sept. 30, 2017. Presently,
the NFIP is set to expire at midnight tomorrow—Friday, November 30th.
Members of the House are discussing a possible one-week extension of the
NFIP so that it would expire on Friday, December 7th, when about 20 percent
of all government agencies will also lose their funding. That would buy
Congress another week to develop a government funding bill that would
include the NFIP and fund the rest of the outstanding agencies/programs
through the end of FY 2019.
For your convenience, click
here to find the NFIP's 2017 memo on how to proceed
in the event of a lapse, which FEMA has advised us will still apply.
PIA strongly supports a bill that has been introduced by U.S. Sen. John
Kennedy (R-LA) that would reauthorize the National Flood Insurance Program
(NFIP) before it expires. The "clean" extension bill would extend the program
through the end of May, and it also has a retroactive provision for policies
renewed or made during a lapse. Government funding legislation, which must
be passed by Dec. 7, offers another potential avenue for an NFIP extension.
PIA has signed on to a
joint industry trades letter to Congressional leadership,
urging an extension and has issued a
nationwide grassroots alert encouraging PIA members to
contact their members of Congress and urge them to pass an NFIP extension.
FL CFO: Include Mitigation in Flood Bill
With only days left until the National Flood Insurance Program (NFIP) is
set to expire, Florida CFO Jimmy Patronis urged federal leaders to include
a flood mitigation requirement as they seek long-term solutions for the
Florida subsidized program.
"Our state has been the leader when it comes to flood mitigation and
fostering private market solutions," he said. "Adopting policies similar
to Florida's that pave the way for a healthy private flood insurance market
is essential, but more needs be done. Congress must include a robust flood
mitigation component to the NFIP and do so now. Delaying just to deal with
the same problems later will be a disaster for Florida."
Louisiana Least Affordable for Auto Insurance
Louisiana ranks
number one on a list of least affordable states for auto
insurance, according to a new study from the Insurance Research Council
(IRC). One factor behind the high cost of insurance in Louisiana is the
frequency of auto accidents and resulting insurance claims, the IRC said.
In 2017, Louisiana had the highest bodily injury (BI) liability claim frequency
in the country (1.75 claims per 100 insured vehicles, almost double the
countrywide rate of 0.90 claims per 100 insured vehicles).
Another factor cited by the IRC is frequent claims and litigation, "the
propensity of Louisiana claimants to hire attorneys and file lawsuits." Among
2017 BI claims, 54% of Louisiana claimants hired attorneys, compared with 48%
of claimants in other states. Moreover, Louisiana claimants were 60% more likely
to file lawsuits (16% compared with 10% countrywide), the IRC said.
In the last legislative session, a bill was passed to create the High Auto
Insurance Task Force, which PIA's Immediate Past President Lou Fey sits on this
task force as the PIA of Louisiana representative. This task force, chaired by
House Insurance Committee Chairman Kirk Talbot has met a few times since forming
with the goal of introducing legislation in the 2019 Legislative Session to
address this issue. We'll keep you updated as work evolves.
Private Equity Deals and Instability
Private equity deal makers are pushing buyout values to levels not seen
since 2007, as they ride a wave of cheap debt, according to a report in the
Financial Times. Although the deals may not be as large in the last buyout
bubble, today's deals are again fueled by supersized portions of cheap debt,
with few strings attached. In about half of this year's deals, private equity
firms were able to raise debt financing up to at least six times the annual
earnings before interest, tax, depreciation, and amortization of the company
they bought.
This is starting to raise alarm bells. Janet Yellen, the former chair
of the U.S. Federal Reserve, told the Financial Times last month that
she was worried by a "huge deterioration" in corporate
lending standards, particularly for leveraged loans. The International
Monetary Fund (IMF) has also singled out leveraged loans as a potential source
of financial instability.
Gain the Confidence You Need to Talk About Cyber
Cyber 101 is an educational resource created by PIA and
The PIA Partnership to help educate PIA members and their clients about the seven
most common cyber risks faced by small and mid-sized businesses, as well as the
business practices and insurance coverages that can reduce those risks.
Cyber 101 focuses on seven key areas of risk: fraudulent funds transfer,
extortion/ransomware, social engineering, business interruption, data
breach/privacy, network security, and website media liability. Agents can learn
more about each risk with additional resources such as interactive claims examples
that demonstrate loss risks to clients, 1-page PDFS explaining the risk, and
30-minute webinars. PIA agents can also personalize and provide their clients
with general cyber educational resources.
Visit
Cyber 101 today to gain the knowledge you need about the
seven most common cyber risks faced by businesses.
For additional information about The PIA Partnership, please visit:
http://www.ThePIAPartnership.com.
Thank you to the current PIA Partnership companies: Central Insurance Company,
Encompass Insurance, Erie Insurance, Liberty Mutual Insurance, MetLife Auto & Home,
National General Insurance, Progressive Insurance, Selective Insurance Group,
State Auto Insurance Companies, and The Hanover Insurance Group.
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