MINUTES IBHS Flood Committee General Session Sheraton Crystal City Hotel Arlington, VA October 25, 2005

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1 MINUTES IBHS Flood Committee General Session Sheraton Crystal City Hotel Arlington, VA October 25, 2005 I. Call to Order The Chair, Patty Templeton-Jones, called the meeting to order at 8:30 AM on Tuesday, October 25, A. Antitrust and Lobby Tax Statements The Chair advised attendees that the General Session would be conducted in accordance with the IBHS Anti-trust statement. B. The Chair led attendees in self-introductions. II. Review of Minutes The Minutes were approved as presented. III. Legislative Update Mr. Connor introduced Howard Leiken as the person to provide the update for this session. Points mentioned in his remarks included: A. Total payments for the Hurricanes are projected to be $22 23 B. B. Borrowing authority has been approved but additional funding/borrowing authority will have to be addressed. C. GAO Report. NFIP comments were not accurately reflected in the report. Readers are requested to see the report s Appendix for a letter from the NFIP. D. During Congressional testimony by Mr. Maurstad, there was some tough questioning/comments---especially re. the Appeals process. Some recent Bulletins discussing testimony may be found on the Bureau web site. E. There was some discussion in the Senate as to what changes might be made in the NFIP. How much is actually done will have to be seen. F. The funding of claims payments involves a commitment, and in one way or another, will have to be paid, so there should be no concern about the availability of funds. G. Subsequent funding requests will probably be combined with discussions of changes in the program. H. Hurricane Katrina has shown the value of the NFIP WYO relationship.

2 IV. Old Business A. Priorities of the IBHS Flood Committee. The Chair noted that the priorities have been revised. i. Monitor the status of the NFIP. ii FIRA a. Appeals Process. It seems that when approved, it will become a part of the Claims Handbook. It would not be made a part of the policy. b. FIRA Expenses c. Agent Training. On this topic, Mr. DeCicco offered some discussion. There is a report due on 11/17/05. NFIP wants to know what companies are doing now. Companies do not have systems to track agent training. The Bulletin reference to WYO assisting states in tracking is incorrect. d. Bureau forms (Handbook, Claims History & Acknowledgement form) will probably go out by late November. Questions re. Claims History will be referred to the Bureau via a Bureau telephone number. The WYO should not try to answer questions on this topic. iii. Arrangement/Federal Preemption. Companies will be reimbursed for FIRA expenses as of January, 2006 via an interim Arrangement. Mr. Connor indicated that discussions for the September 2006 Arrangement will begin in November, iv. The Status Report on the review of WYO Companies actual Loss Adjustment Expenses has been delayed because of Hurricane Katrina and the WYO difficulty in obtaining actual expenses involved. This topic will continue to be active in NFIP and WYO interest. B. FIMA Management Planning Calendar has been sent to the Committee. Mr. Connor reviewed the highlights. C. Florida Hurricane Claims Activities lessons learned. Mr. Shortley reported that the waiver of proof of loss seems to be working. In some instances, there are just not enough adjusters, but this is a problem that the industry has known would happen with multiple, simultaneous serious events.

3 D. Condo Inspection Program. All have been inspected and it appears if things are going quite well. The primary need at this point seems to be more training for underwriters. The Committee made a request to review these statistics since there is a sense that there may be some inaccuracies. E. Marketing Results. Jim Caponigro and Meg Bartow presented a report that included the following: a. FloodSmart has been successful. There has been a 27% growth of PIF. b. He reviewed the FloodSmart Performance Measurement and responded to Committee questions. c. An Agent Secure Site is coming in January at d. There has been both pre and post hurricane activity. A quick response unit has provided claims information and basic flood information to media markets where flooding has occurred. F. Elevation Certificate.. Mr. Beaton provided the following information (as well as noting that he was a stand in for Mr. de la Cruz on this topic). a. It was in the Federal Register in August. The Comment Period is over, and it must now go to OMB (by mid-november.). An approved form is anticipated by the end of December. All questions should be worked out by the March meeting of this committee and the form should be required either by October or January 1, Once the new form is approved, FEMA may not print more of the old forms. As part of the discussion, it was noted that i. There will be no changes as to how the WYO processes policies. ii. This form should help all concerned. iii. It appears that the photo retention period will be three years after the policy expired. iv. WYO s prefer that a note be put on the form to the effect that photos should be givin to the WYO. v. Photos are NOT required on existing buildings. vi. Only for elevation certificates after the implementation date. G. South Carolina taxing of premiums. Mr. Connor has requested that companies notify him of the amount of the municipal tax they are to pay South Carolina. He feels that the NFIP needs to get a better understanding of the amount of money involved before they determine the next steps to deal with this measure.

4 H. Next Gen. Mr Way noted that personnel have visited WYO during the period May August, 2005 as companies could accommodate them. This has permitted a specific discussion about the program and appears to have been beneficial. WYO s desiring a (full day) visit should contact Mr. Way. V. New Business A Items A D, (NFIP WYO cooperation and information exchange during Hurricane Katrina), FEMA s perspective on Katrina, the WYO perspective on Katrina and Major Claims issues were covered as if this were a conference call. The major points covered were i. Special Claims Reporting is needed every Monday, Wednesday and Friday and should be in by 8:00 a.m. (May be submitted by the close of business on the previous day if that is easier for the WYO.) ii. iii. Use of the Expedited Claims practice does not mean that an adjuster does not have to assess the loss; nor does it mean that policy limits are to automatically be paid. Will there be a problem in having adjusters available for Hurricane Wilma? Possibly; however, companies are telling their adjusters to stay in Louisiana or wherever they are currently working rather than go to Florida. E. E. Severe Repetitive Loss Properties and F. Special Direct Facility, were discussed together. Mr. Garren reported that there are 11,347 policies in the SDF. Because of this season s hurricanes, there may be as much as a 50% increase in the policies included here. He went on to day that he feels that the reasons for the SDF remain valid today; namely, the most serious policies are in one place where they can be easily tracked, handled for re-write, claims, rate increases, etc. Also, re-inspection is more easily accomplished. Some policies will be returned since they do not meet the legal definition of repetitive loss. He also noted that WYO s feeling that policies might be in the SDF erroneously, should contact the SDF for possible return. When the property is mitigated, the policy is returned to the WYO.The WYO s suggest that they (WYO) keep the policy and customer service while also notifying the SDF of the policy number and follow appropriate guidelines so that the NFIP can track them. In short, the WYO question that the SDF needs to have the physical policy, since it was the WYO that originally signed up the policy and should be the one to service it. This will remain an agenda item. G. FIRA implementation costs. This was discussed earlier. It will be covered by an Interim Arrangement in January, H. The new PRP. Ms. Harrington noted that the major increase is in the purchase of Contents Only Coverage.

5 I. After Action Report. The Executive Flood Committee will conduct a conference call in November where they will produce a paper indicating the Successes and the Areas Needing Improvement for handling large catastrophe events. Consideration will be given to the way that the NFIP and the WYO functioned following the hurricanes of the 2005 season. The goal is to have a document that can be discussed with the NFIP that will provide an already-thought out road map as to how to proceed in future situations. J. Mr. Beaton posed an underwriting question. There was an extension for filing claims from August 29 November 27. Would it be advisable to further extend it for an additional 90 days? (An amendment was signed on October 24 to alter the start date to August 27 to coincide with the date of the evacuation order. K. Future Meeting. a. March 7, 2006 Sheraton Crystal City Hotel b July 18, 2006 Sheraton Crystal City Hotel c. October 17, 2006 Sheraton Crystal City Hotel L. Patty Templeton-Jones announced that with the close of this meeting, her term as Chair will end. She expressed her appreciation to all who worked with her during her term of office. M. Jack (Just Jack) DeCicco will be the new Chair of the Committee. He asked all to offer a round of applause to Patty for her service as Chair over the past two and one-half years. The Committee complied enthusiastically. VI. Adjournment. The meeting adjourned at 11:15 a.m. Respectfully submitted: Attested: James W. Russell, Ed.D. Patty Templeton-Jones IBHS Staff Support Chair November 4, 2005 November 14, 2005