Printable version of Circular Letter No. 7 (2007) (PDF Format)

Eric R. Dinallo
Acting Superintendent

Circular Letter No. 7 (2007)
April 16, 2007

This circular letter replaces and repeals Circular Letter No. 4 (2006). Authorized life insurers, retirement systems and fraternal benefit societies hereafter referred to as "life companies" in this circular letter and its attachments. Disaster planning, preparedness, and response for health insurers and property/casualty insurance industries are covered by separate circular letters.

On May 10, 2001, the Department issued Circular Letter No. 11 (2001) (CL 11(2001)) to all property/casualty insurers licensed to do business in New York State. CL 11 (2001) established the New York State Insurance Disaster Coalition (Insurance Disaster Coalition), a public/private partnership created to identify and organize specific Insurance Department and insurance industry resources to serve victims of natural disasters and other state emergencies. In addition, the circular letter provided for the creation of the Insurance Emergency Operations Center (IEOC), to be staffed by selected insurance industry disaster liaisons and representatives of the Insurance Department in order to coordinate disaster response.

Moreover, as part of the disaster response, CL 11 (2001) and its two supplements:

• Required submission of an annual "Pre-disaster" report detailing property exposure information in the state on a county-by-county basis;

• Directed companies to name "Insurance Company Disaster Liaisons" and provide such contact information to the Department;

• Developed a Disaster Response Questionnaire, and asked property/casualty insurers to submit copies of their Disaster Response Plans to the Department;

• Created a method by which insurers could obtain "Insurance Adjuster Temporary Permits"; and

• Provided a mechanism for post-disaster reporting of claims data.

Circular Letter No. 7 (2004) (CL 7 (2004)) brought the life and health insurance industries within the disaster response program established in CL 11 (2001). The purpose of this circular letter is to continue and update the disaster response program for the life insurance industry.

The following table is provided to enable all licensees to better understand what is required of them by this circular letter.

Questions concerning any aspect of this circular letter should be directed to Senior Insurance Examiner Ashbert Carrington of the Disaster Preparedness and Response Bureau, by phone at (212) 480-5340, by e-mail to acarring@ins.state.ny.us, or by mail to State of New York Insurance Department, Disaster Preparedness and Response Bureau, 25 Beaver Street, New York, NY 10004.

When an emergency or disaster situation occurs, the Insurance Department provides the Governor and the State Emergency Management Office (SEMO) with critical information regarding the amount and extent of property losses, as well as other damage assessments. Based on this information, the Governor determines whether and when to request a federal disaster declaration, and how to prioritize the deployment of state assets.

The insurance community, including the property, life and health sectors, has been identified as a key resource in providing early assessments of damages arising from natural or man-made disasters. Insurers play an important role in quantifying the magnitude of losses - insured and uninsured - and in determining both the degree and duration of insurer response to losses. Accordingly, all entities to which this circular letter is directed are expected to assist the Insurance Department in obtaining necessary information before, during, and after disasters strike.

An integral part of the Insurance Disaster Coalition response to any disaster is the Insurance Emergency Operations Center (IEOC), which will be staffed by selected insurance industry disaster liaisons and representatives of the Insurance Department in order to coordinate disaster response.

The Insurance Emergency Operations Center will be activated upon direction of the Superintendent of Insurance, in accordance with the nature and extent of the event. Where possible, this determination will be made in conjunction with the Department’s disaster coalition partners.

1) Disaster Response Plan and Questionnaire

Each addressee of this letter should incorporate the New York State Insurance Disaster Coalition procedures into its own disaster response plan. Since the New York State Insurance Disaster Coalition procedures and the Insurance Emergency Operations Center continue to be integral parts of the industry’s response to any disaster in New York State, the completion of the electronic template and the submission of each insurer’s disaster response plan are necessary to maintain the effectiveness and accuracy of information used by the Disaster Coalition in the event of a future disaster.

a) Disaster Response Plan

The disaster response plan should describe how each addressee intends to provide its policyholders with the resources needed to recover from a disaster. To this end, a disaster response plan should at a minimum detail what preparations the entity has made, where applicable, with respect to the following:

• Board of Director support for an "Emergency Preparedness Plan";

• Appropriate emergency response training of company personnel;

• Plans for suitable expansion of claims handling capacity in a variety of disaster scenarios, including provisions to cover:

  • adequate personnel;

  • catastrophe response team availability;

  • access to disaster areas and personnel identification; and

  • applications for temporary adjuster permits;

• Testing of the Disaster Response Plan; and

• Incorporation of the role of insurance company disaster liaisons, and their interaction with the New York State Department of Insurance.

Please note that more detailed guidance on creating a Disaster Response Plan is provided in the attached appendix.

Entities may provide their completed disaster response plans to the Department either electronically (as an e-mail attachment), by compact disc or diskette, or by hard copy (if no electronic means are available).

By June 1, 2007, and each June 1^st thereafter, any Disaster Response Plan submitted to the Insurance Department should be updated as necessary. If no update is necessary to a previously submitted Plan, an e-mail setting forth the company name(s), NAIC number(s), and NAIC Group number should be submitted to the Insurance Department Disaster Plans electronic mailbox at:

DRP@ins.state.ny.us

Any United States mail should be addressed to:

State of New York Insurance Department
Disaster Preparedness and Response Bureau
DRP Unit, 5th Floor
25 Beaver Street
New York, NY 10004.

b) Disaster Response Plan Questionnaire

The Disaster Response Plan Questionnaire electronic template is not to be used in lieu of an addressee’s own disaster response plan. Rather, the requested information is to be included as part of each entity’s own plan.

The Disaster Response Plan Questionnaire electronic template and instructions for its completion and submission can be found on the Insurance Department website at:

http://www.ins.state.ny.us/dprcldoc.htm

On June 1, 2007, and each June 1st thereafter, the Disaster Response Questionnaire electronic template should be submitted to the Insurance Department. If none of the information previously submitted to the Department has changed, the date field should be updated and the previous electronic template(s) may be resubmitted.

By completing the Disaster Response Plan Questionnaire, each entity will be providing the Department’s Disaster Preparedness and Response Bureau with the name of the designated disaster liaison(s), along with that person’s telephone and cell phone number(s) (for both business and after business hours), email address, and/or pager number, if applicable. Any change in contact information should be reported immediately to the Insurance Department by submitting an updated Disaster Response Plan Questionnaire.

2) Business Continuity Plan Questionnaire

To assure the Insurance Department that each addressee has taken steps to put in place a Business Continuity Plan that would reasonably ensure that the recovery of critical business processes could take place in the event of a disaster, each addressee is required to complete the Business Continuity Plan Questionnaire electronic template and attest to the accuracy of the answers provided.

The Business Continuity Plan Questionnaire electronic template and instructions for its completion and submission can be found on the Insurance Department website at:

http://www.ins.state.ny.us/dprcldoc.htm

On June 1, 2007, and each June 1st thereafter, the Business Continuity Plan Questionnaire electronic template should be submitted to the Insurance Department.

Please note that four additional questions dealing with the testing and maintenance of the Business Continuity Plan have been added to the questionnaire. Therefore, each addressee must submit to the Department the "new" updated form found at the address listed above.

Upon the Insurance Department’s activation of its Insurance Emergency Operations Center (IEOC), the Superintendent may activate designated insurance company disaster liaisons representing several of the largest underwriters in the emergency or disaster areas. Participating companies will be determined based on the previously described Pre-Disaster Reports. Disaster liaisons will be contacted based upon information submitted in the Disaster Response Plan Questionnaire.

Subsequently, disaster liaisons should be prepared to participate in the State’s Disaster Response Plan as follows:

• A teleconference of the selected disaster liaisons will be held, where possible, following the occurrence of a disaster – and prior to the activation of the Department’s IEOC – to discuss the magnitude of the disaster and the scope of activation plans.

• Upon activation of the IEOC, disaster liaisons or their designees will be expected to staff the IEOC at either of its two locations: One Commerce Plaza, Albany, NY; or 25 Beaver Street, New York, NY.

• The Insurance Department will provide a fully-equipped IEOC for use by disaster liaisons at either of the aforementioned locations. Included are analog data and voice telephone lines, along with videoconferencing links to the SEMO emergency operations center.

• The Insurance Department will continue to coordinate communications among company and association contacts through ongoing teleconference calls to: plan staffing of the IEOC for the actual or threatening (as in the case of hurricanes) emergency; individually discuss with each insurer’s liaison the company’s catastrophe operations; individually review each insurer’s response plans; and discuss catastrophe operations and emerging issues.

• Disaster liaisons may be expected to remain on duty at the IEOC as determined by the Superintendent of Insurance acting in consultation with coalition partners.

Liaison Duties and Responsibilities

Insurance company disaster liaisons should:

• Have a qualified back up. Both persons preferably should be members of the entity’s catastrophe team, or manager-level employees, who are familiar with company protocols and have access to critical information.

• Provide coverage data and loss statistics as requested by the Insurance Department.

• Transmit information about the disaster from the insurance industry to emergency response officials and other industry representatives.

• Be authorized and knowledgeable about company internal information systems and sources, and authorized to access such systems so that applicable, timely information can be provided to SEMO/New York City Office of Emergency Management, and other emergency responders via the Insurance Department.

• Be prepared to remain on duty during the hours when the IEOC is operating, normally from 7:00 a.m. to 6:00 p.m., or for such time periods as necessary to assist with the effective management of the disaster. Depending on the level of the disaster, this may be a seven-day-week commitment.
  

Post Disaster Coverage Data and Loss Statistics

Depending on the type of emergency encountered, in the ensuing days after a disaster, disaster liaisons will be required to provide to the Department specific statistics about insured losses. These statistics will be periodically updated on an as-needed basis, but not less than monthly.

Reports will be consolidated by Insurance Department staff for submission to SEMO and the Governor’s office only.

1) Confidentiality

All of the above reports and statistics are to be compiled and summarized by Insurance Department personnel for internal Insurance Department use. Reports submitted to SEMO and the Governor will be on an aggregate basis, with no individual company information identified in those reports.

At the time of submission, an insurer should request an exception from disclosure under Section 89(5) of the Public Officers Law (commonly known as the Freedom of Information Law, or FOIL) for any information or reports that it submits to the Insurance Department that it believes are trade secrets or commercial information that, if disclosed, would cause substantial injury to its competitive position.

In the event that a request is received by the Insurance Department for the release of information pursuant to FOIL and the insurer requested an exception from disclosure upon submission, the insurer will be notified and given the opportunity to respond to the Insurance Department in accordance with FOIL and Regulation 71 (11 NYCRR 241.6).

2) Communications Network

Insurance industry representatives of the New York State Insurance Disaster Coalition are requested to provide the Insurance Department with Internet links to not-for-profit websites that are beneficial to the public before, during, and after a disaster.

Your cooperation in furnishing timely and accurate responses is essential to the success of the New York State Insurance Disaster Coalition and is appreciated by the Insurance Department and the people of New York State.

 

Very truly yours,

______________________
Eric R. Dinallo
Acting Superintendent of Insurance