Minutes IBHS Flood Committee General Session Embassy Suites/Crystal City July 25, 2012

Transcription

1 Minutes IBHS Flood Committee General Session Embassy Suites/Crystal City July 25, 2012 Attendees IBHS Committee/Staff Jennifer Rath (Chair) Steve Boyd Lori Dube Rebecca Hammond Jeff Hinesly Peggy Klingel Amanda Krupkin Tracy Ladner Patty Latshaw Cassie Masone Jim Meyer Carol Miller Corise Morrison Patty Mulvania Kim Quagan David Treutel Gerry Waytowich Debra Ballen Allstate Nationwide Travelers Liberty Mutual Farmers Insurance American Family QBE Southern Farm Bureau Fidelity Selective Auto-Owners Insurance RCIC USAA American Bankers MetLife Auto & Home FIPNC Bankers IBHS FEMA/DHS Melissa Anderson Kevin Brown Vincent Brown Don Buskard Ed Connor Jhun de la Cruz Ryan Janda Tommy Kennedy Dennis Kuhns Tim Mantz Claudia Murphy Jim Sadler Bonnie Shepherd Chris Skeadas Dan Spafford

2 2 David Thomas Steve Van Dyke Mary Jo Vrem Guests Nilesh Agrawal Vee Arrington Bill Barton MaryAnne Bearse Thomas Becker Bruce Bender Pat Borowski Michael Brogan Nicole Y. Brown Guy Brunetto Rocky Bryan Henry Bryson Mary Byrnes Marlene Casanova Renu Chaudhry Richie Clements Kay Cummings Cynthia DiVincenti Christine Dyson Andrew Eastman Mark Emery Richard Gardner Don Griffin Chris Granger Becky Hall Craig Hallbauer Debbie Hardwick Heather Harrison Janice Huffman Merrie Inderfurth Amy Itschner Adrienne Jacobs Rhonda Kleine Linda Mackey Erin Martinko David Maurstad Karen Morgan Larry Palmer Catherine Pollard Phillip Ragen iservice NFIP BSA Travelers H2O Services Enterprise Services Wells Fargo Bender Consulting Services PIA National Fidelity National H2O Services National Flood Services, Stone River Enterprise Services iservice OST PIA National Fidelity National FloodSmart RCG Adjusting PCI National Flood Services, StoneRiver FloodSmart ASFPM/NFDA National Flood Services, StoneRiver Corelogic IIABA USAA OST Seattle Specialty Insurance Services Fidelity National Harleysville/Nationwide

3 3 Nalini Rangaraju OST Jeff St. John IIABA Robert Sarlo Accenture Theresa Shank Patty Templeton-Jones Fidelity Pete Travis Torrent Phil Wills Torrent I. Call to Order Chairman Jennifer Rath called the meeting to order at approximately 8:30 a.m. Antitrust and Lobby Tax Compliance Statements, previously mailed, were noted as controlling deliberations. A sign-up sheet was passed to capture the attendance, and self-introductions of the Committee were made. II. Review of Minutes Ms. Rath called attention to the minutes of the March 14, 2012, General Session meeting. A motion to approve the minutes was made, seconded, and unanimously approved. III. FEMA Leadership Update Mr. Connor thanked members of the Committee and other meeting participants for their support for the NFIP and the FEMA Whole Community Initiative. He reported on the following topics: a. Management Changes at FEMA -- Harriette Kinberg recently retired from FEMA. David Thomas will be assuming Ms. Kinberg s responsibilities on an acting basis (60 90 days), at which time another FEMA staff member will take on this acting role and so on until the position is filled permanently. Mr. Thomas can be reached at DavidC.Thomas@fema.dhs.gov. Additionally, in October, Dr. Sandra Knight will be retiring from her position as Deputy Assistant Administrator for Mitigation. This is a Senior Executive Service position within the federal government, and there are additional steps in the hiring process. The plan is to fill Dr. Knight s position on an acting basis while the search is underway. Mr. Connor hopes that the first acting assistant administer will be named before Dr. Knight retires to insure a smooth transition. b. Borrowing Authority The program is now approximately $17.2 billion in debt, with borrowing authority at $ billion. There is approximately $661 million cash on hand. The current interest rate is ½ percent for three years. The recent legislation did not address borrowing authority.

4 4 c. Biggert-Waters Flood Insurance Reform Act of 2012 On balance, the Administration thinks that the recent legislation is a good package, particularly with respect to the five-year reauthorization. Mr. Connor identified the following opportunity areas : (1) elimination of subsidies for pre-firm severe repetitive loss properties and non-primary residences, as well as the five-year phase in for recently remapped properties; (2) the FEMA/state insurance department mediation process; (3) installment payments; and (4) flood following wildfire. Mr. Connor does not believe any of the new requirements will be implemented on a retroactive basis but indicated that there still are issues to work out. Mr. Connor explained that FEMA had created a Tiger Team to coordinate technical input as requested by Congress during the legislative process. The Tiger Team included experts from multiple disciplines (e.g., actuarial, underwriting, claims, legal). A similar collaborative approach will be used for the implementation process. d. IT Update Messrs. Buskard and Skeadas provided an IT update, focusing on three major projects: (1) The network redesign for the legacy system environment is on schedule and on budget and will provide the needed security and vulnerability mitigation improvements. (2) The legacy system replacement (Phoenix) is progressing on a number of fronts with several FEMA personnel changes and new reporting relationships providing oversight. (3) The fiscal year 2012 KPMG external audit is underway. Responding to KPMG has been a major undertaking and has delayed some aspects of network redesign because they could not be changed during the audit. IV. Old Business a. Marketing and FloodSmart Report Ms. Hardwick provided the PIF Performance Report. As of April 2012, PIF decreased by.7 percent (39,000) since the start of the fiscal year and by.3 percent (17,000 policies) compared to April New sales are down by 66 percent, lapses are lower by 35 percent, and the combination of retention and winback is up by 1 percent. As a general matter, there has been higher growth in northern states relative to southern states, in part due to map changes in Montana, Wyoming, and Vermont; however these are still very low volume states. Minnesota accounted for the greatest negative growth. Marketing activities include the re-running of Stop Pretending in rotation with Heart Rate on TV, two coastal consumer testimonial videos, a new NPR radio buy, and a new levee video. Seasonal outreach is focusing on wildfire and hurricane. Several new programs are coming soon, and the mail on demand program is being scaled back due to low demand. b. Claims Issues Mr. Sadler reported that there were only about 2500 claims from Tropical Storm Debby, resulting in about $5 million in claims payments. There were not a large number of flood claims resulting from 2012 wildfires to date. c. Documentation Guidelines Mr. Sadler stated that the documentation guidelines are intended to result in process uniformity between adjusters and company examiners. They

5 5 also are related to FEMA s efforts to bring new adjusters into the program as older adjusters are retiring. FEMA does not provide technology support to adjusters; that is done by individual WYO s. He believes that the technology for adjusters is keeping up with recent developments in the field. d. Reimbursement of FIRA Expenses -- The 2004 FIRA Reimbursement is still being worked on; no details on status or substance are available. It was noted that a similar reimbursement might be called for given the costs of implementing the 2012 legislation. e. Severe Repetitive Loss and Mitigation Programs -- Mr. Janda reported that the current five FEMA mitigation grant programs will be condensed into three programs; this should reduce certain redundancies. Although program funding has been cut, there still is some money in the pipeline that has allowed for awards. That said, the level of available funding in the Severe Repetitive Loss Program is not nearly enough to mitigate all of the pre-firm properties that have experienced repetitive losses and may be candidates for mitigation in order to avoid the rate increases mandated by the new legislation. f. Risk Map Update Mr. Vince Brown focused on efforts to map areas behind non-accredited levees. A report by the National Academy of Sciences on the levee issue is expected in FY Mr. Brown stressed the need to get communities involved in the mapping process before perception problems arise. He also noted that the High Water Mark campaign is being well received in its pilot project phase. g. Statistical Report Review The Committee had questions about the number of participating communities (different numbers from FloodSmart and the Bureau); the decline in Minnesota policies; and Exhibit 22 (why so many condo inspection appeals are still awaiting approval). Mr. Kevin Brown said it would be possible to include separate data for communities that do not participate in the CRS system. He also explained that the large number of condo inspection appeals that are still awaiting resolution may be due to lags in the legacy system process; it might be possible to note this in future reports. e. ANFI Update Mr. Thomas reported that 177 people have now received the ANFI designation. The pass rate for the basic exam was 81 percent, and for the advanced exam, 67 percent. A continuing education program will be developed by the end of the year. f. Underwriting Report Mr. de la Cruz indicated that a second Bulletin on agent commission rebating has just been issued. The new rules apply to policies that are renewed as of October 1, even if the premium is paid earlier. The new listing of CRS communities was released on July 12. The Flood Insurance Manual is complete and should be posted on the FEMA website very soon; there will be some delay in releasing the print version due to production problems. The new manual clarifies some issues such as cancellation, endorsement, and refund rules; it is important for WYOs to make sure the new rules are consistent with endorsements. Mr. de la Cruz indicated that Bulletin #12037 (Reunderwriting of Severe Repetitive Loss Properties) is intended to deal with mis-rated policies. The Bulletin applies current rules, not

6 6 the new legislation, and requires an elevation certificate for such properties. Tentative rates can be put in place for one year in the absence of an elevation certificate, but after one year, the policy will be non-renewed if there is no elevation certificate. The FEMA working group on the new flood insurance application met last week but will pause in its work in order to analyze how the new legislation affects the application form. The policy rewrite initiative is also on hold. The legacy system is scheduled to start using new geo-coding in August or September; a Bulletin will be issued to provide more details. The January 2013 changes will include provisions stemming from the new legislation if possible. A Bulletin on the PRP extension issue is expected soon. The Elevation Certificate that expired in March still has not been updated, but the existing certificate remains valid, as noted in the Manual. V. New Business a. Biggert-Waters Flood Insurance Reform Act of 2012 Ms. Rath reported that the Committee has created five working groups to address issues arising from the new legislation: (1) rates and maps; (2) installment plan; (3) coverage and claims; (4) mitigation; and (5) communication. FIPNC will also be involved in the working groups. b. Treasury Announcement Regarding Limitations on Credit Card Payments The new Treasury policy limits credit card payments to the federal government to $49,999. This is less than the payments that are made by some RCBAP associations. FEMA staff believes the issue can be addressed by multiple credit card payments or other work-arounds. c. New FEMA Website Some links have been broken in the transition to the new FEMA web site. A Bulletin will be sent out to identify these problems. FloodSmart is correcting the broken links to their site. d. New Arrangement The Arrangement packages will be sent out in early August. WYOs planning to return their signed Arrangements should be aware that there is usually a time lag of 1 2 weeks in processing mail to FEMA as a result of security screenings. VI. Future Meetings The last 2012 IBHS Flood Committee meeting will be held on October at the Embassy Suites in Crystal City: Proposed dates for 2013 meetings are: March 5-6 or 12-13; July 23-24; October 8-9 or IBHS will check availability with FEMA staff and then check with the hotel. VI. Adjournment There being no further business, the meeting was adjourned at approximately 11:00 a.m.