Shutdown Ends, Insurance Costs Assessed

The five-week partial government shutdown cost the U.S. economy about $3 billion in forgone economic activity that won't be recovered, the Congressional Budget Office said in a new report Monday. The agency projected that an overall $11 billion in losses due to the shutdown over President Donald Trump's border wall will be offset by a projected $8 billion boost for the GDP through the remainder of the year.

The impact on the insurance industry is still being assessed. Various industry leaders and stakeholders were gathered in New York days before the shutdown ended at the annual Property/Casualty Insurance Joint Industry Forum held by the Insurance Information Institute (I.I.I.). One thing participants noticed was who wasn't there.

For example, FEMA Deputy Administrator Dan Kaniewski had been invited to speak at the event, but he wasn't able to attend due to the shutdown. "It's a shame that we can't have guests like that because of this type of activity, which we all know is more political than anything else," Sean Kevelighan III president and CEO, said.

READ: Partial Federal Government Shutdown Hampers Insurance Industry

Roy Wright, president and CEO of the Insurance Institute for Business & Home Safety, was the former chief executive of the National Flood Insurance Program (NFIP). "I've got to tell you, as someone who's worked in that space and led as the chief executive national flood at FEMA, so much about these kinds of things just really gets at a visceral level."

"Those are folks, some of them are furloughed, but many of them actually are at work, and they're working without a paycheck. That affects real families, and it just pains you to see how that plays," Wright said. "At the end of the day, there are real services that are provided to Americans, and there's a set of professionals that have been brought in, that are part of our insurance industry."

New Rule Could Boost Private Flood

A new federal rule being finalized could increase the number of flood insurance policies underwritten by private companies.

The new rule requires mortgage lenders to accept private flood insurance as an alternative to insurance backed by the federal government. Private flood insurance now accounts for less than 5 percent of the residential market, and most private flood insurance policies cover commercial properties or residential properties that need coverage above the $250,000 limit on National Flood Insurance Program (NFIP) policies.

Treasury and the FDIC have already indicated their approval of the rule. If it is additionally approved by the Federal Reserve, the Farm Credit Administration, and the NCUA, the final rule will become effective on July 1, 2019. The promulgation of the rule is required by a provision in the Biggert-Waters Act of 2012, which reauthorized and reformed the NFIP.

PIA National thanks these agencies for their years of hard work on the complex issue of private flood insurance and will continue to support efforts to increase the choices available to flood insurance consumers. PIA National also supports the long-term reauthorization of the NFIP by Congress, because the private flood market presently lacks the capacity and availability to fully supplant it.

PIA National Counsel and Director of Regulatory Affairs Lauren G. Pachman, Esq. has this analysis.

More Americans Lack Health Insurance

According to a Gallup report released on Jan. 23, the percentage of American adults without health insurance rose to 13.7 percent in the fourth quarter of 2018, up from 12.4 percent in 2017 and a low of 10.9 percent in 2016. The Wall Street Journal reports that the uninsured rate is now at its highest level in four years, with about 7 million more Americans lacking health insurance. Women, low-income individuals, and younger adults saw the greatest increase in the uninsured rate.

For its report, Gallup surveyed about 28,000 randomly selected adults. The margin of sampling error is no more than plus or minus 0.5 percentage point, it said.

Webinar Spotlight

DocIT for Agents is an online service that contains violation information on drivers sourced directly from court records (not the MVR). This alternative service can help agents place auto insurance applicants with the right insurance carrier earlier in the quoting process, making for a more efficient process which saves staff time in your agency.

If you are currently pulling MVRs to better understand auto insurance applicants, you can probably use DocIT for Agents instead (although the selected carrier may ultimately require an MVR in order to bind coverage). These traffic violation reports are available for as little as 75 cents per transaction with a monthly subscription. Register for the February 14 at 1 PM CT webinar.

Other upcoming PIA webinars:

Wipe Out Negativity and Conflict in the Workplace — February 20 at 1 PM CT

Hartford Flood Webinar — February 22 at 1 PM CT Webinar — March 13 at 1 PM CT

Check out the PIA Advocacy Blog

PIA National's government relations team recently launched the PIA Advocacy Blog, your one-stop shop for timely updates on what's happening on Capitol Hill and on state and federal regulatory issues. Read the blog anytime by visiting

Here's one of the latest posts on PIA Advocacy:

Big Ideas and Partisan Agendas: House Financial Services Committee Changes Hands

The new Congress that began January 3rd brought with it not just a turnover in power in the U.S. House of Representatives, but also a wave of new members to the House Financial Services Committee, including a new chairwoman and top Republican. The new chairwoman of the committee is Rep. Maxine Waters (D-CA). The shift in the power dynamic could pose a challenge on several pending issues over which the House Financial Services Committee has jurisdiction.