NOTE: WITHDRAWN EFFECTIVE 06/05/2013
Circular Letter No. 2 (2012)
April 12, 2012
All accident and health insurers, Article 43 corporations, licensed Public Health Law Article 44 health maintenance organizations, and municipal cooperative health benefit plans.
|RE:||Disaster Planning, Preparedness and Response|
STATUTORY REFERENCES: Sections 301, 305, 308, 1109, and Articles 44 and 47 of the Insurance Law and Sections 202 and 302 of the Financial Services Law.
This circular letter sets forth the standards expected of authorized health insurers in planning and preparing for, and responding to disasters in New York State. To that end, this letter describes the role of the New York State Disaster Coalition and the organization and operation of the Insurance Emergency Operations Center (“IEOC”).
The letter describes the data reports and plans (Business Continuity Plan Questionnaires, Disaster Response Plan Questionnaires, and Disaster Response Plans) that various health insurers are expected to provide the Department of Financial Services (“Department”) before a disaster strikes, so that the Department can assist in organizing industry response to a disaster.
Further, the letter describes the part played by insurance company Disaster Liaisons in staffing the IEOC and responding to Department requests for information.
Finally, the letter describes the post disaster reporting process (Post Disaster Data and Loss Statistics), and confidentiality of reports provided to the Department.
This circular letter repeals and replaces Circular Letter No. 2 (2011). Disaster planning, preparedness, and response for life insurers and property/casualty insurers are covered by separate circular letters.
The following table is provided to enable all licensees to better understand what is required of them by this circular letter.
|A||Organization of this Circular Letter||2|
|B||The New York State Insurance Disaster Coalition and Insurance Emergency Operations Center||2|
|C||Before a Disaster Strikes||3|
|C1||Disaster Response Plan and Questionnaire||3|
|C2||Business Continuity Plan Questionnaire||4|
|D||Operations During a Disaster||5|
|D1||Insurance Company Disaster Liaisons||5|
|D2||Liaison Duties and Responsibilities||5|
|E||After a Disaster||6|
|Post Disaster Coverage Data and Loss Statistics||6|
When an emergency or disaster situation occurs, the Department provides the Governor and the State Office of Emergency Management (“SOEM") with critical information regarding the number 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 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 IEOC, which will be staffed by selected insurance industry disaster liaisons and representatives of the Department in order to coordinate disaster response.
The IEOC will be activated at the direction of the Superintendent of Financial Services (“Superintendent”), 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.
Sections 1(a) and (b) apply to all addressees of this circular letter except municipal cooperative health benefit plans.
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 IEOC continue to be integral parts of the industry’s response to any disaster in New York State, the submission of each insurer’s Disaster Response Plan is 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 Directors support for a Disaster Response 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
- Testing of the Disaster Response Plan; and
- Incorporation of the role of insurance company disaster liaisons, and their interaction with the Department.
Please note that more detailed guidance about creating a Disaster Response Plan is provided in the attached appendix.
By June 1, 2012, each company must submit a Disaster Response Plan to the Department. Entities must provide their completed Disaster Response Plan to the Department via the Department's Portal Application or in hard copy. No other format will be accepted. If the company chooses to submit the Disaster Response Plan in hard copy, it should mail the plan to the Department at the address provided in Section A.
If the current Disaster Response Plan is the same as the most recent Disaster Response Plan filed with the Department, please submit a statement indicating that the previously filed plan is still in effect. The statement should also indicate the names and NAIC numbers of the companies covered by the plan, as well as the date it was submitted. The statement should be submitted as an attachment via the Department's Portal or in hard copy. For orderly processing of files attached in the Department's Portal, files that are either new Disaster Response Plans or statements indicating that the previously filed plan is still in effect should be named “Disaster Response Plan.”
For orderly processing of files attached in the Insurance Department Portal, files which are either new Disaster Response Plans or statements indicating that the previously filed plan is still in effect, should be named “Disaster Response Plan.”
b) Disaster Response Plan Questionnaire
The Disaster Response Plan Questionnaire 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.
By June 1, 2012, the Disaster Response Plan Questionnaire must be submitted to the Department via the Department’s Portal Application or in hard copy. No other format will be accepted.
By completing the Disaster Response Plan Questionnaire, each entity will be providing the Department 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 Department by submitting an updated Disaster Response Plan Questionnaire.
The Department strongly encourages companies to provide the information via the Department’s Portal Application. The Disaster Response Plan Questionnaire electronic template, and instructions for its completion and submission, can be found on the Department’s website at:
Please note that if a company chooses to provide the current Disaster Response Plan Questionnaire in electronic form, it must be submitted as an attachment via the Department’s Portal.
If a company instead chooses to submit the questionnaire in hard copy, it can contact the Department to request a hard copy of the questionnaire at the address provided in Section A.
2) Business Continuity Plan Questionnaire
To assure the 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 and attest to the accuracy of the answers provided.
By June 1, 2012, the Business Continuity Plan Questionnaire must be submitted to the Department via the Department’s Portal Application or in hard copy. No other format will be accepted.
The Business Continuity Plan Questionnaire electronic template, and instructions for its completion and submission, can be found on the Department’s website at:
Please note that if a company chooses to provide the current Business Continuity Plan Questionnaire in electronic form, it must be submitted as an attachment via the Department’s Portal.
If a company instead chooses to submit the questionnaire in hard copy, it can contact the Department to request a hard copy of the questionnaire at the address provided in Section A.
1) Insurance Company Disaster Liaisons
Upon the Department’s activation of its IEOC, the Superintendent may activate designated insurance company disaster liaisons representing several of the largest underwriters in the emergency or disaster areas. 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:
2) Liaison Duties and Responsibilities
Insurance company disaster liaisons should:
Post Disaster Coverage Data and Loss Statistics
Depending on the type of emergency encountered, in the days following a disaster, the Department will contact disaster liaisons, as needed, who 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 Department staff for submission to SOEM and the Governor’s office only.
All of the above reports and statistics are to be compiled and summarized by Department personnel for internal Department use. Reports submitted to SOEM and the Governor will be on an aggregate basis, with no individual company information identified.
At the time of submission, an insurer should request an exception from disclosure under Section 89(5) of the Public Officers Law (a provision of what is commonly known as the Freedom of Information Law, or FOIL) for any information or reports that it submits to the 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 Department for the release of information pursuant to FOIL and the insurer in question requested an exception from disclosure upon submission, the insurer will be notified and given the opportunity to respond to the 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 Department with Internet links to not-for-profit websites that are beneficial to the public before, during, and after a disaster.
- Organization of this Circular Letter
- The New York State Insurance Disaster Coalition and Insurance Emergency Operations Center
- Before a Disaster Strikes
- Operations During a Disaster
- 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 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 SOEM emergency operations center.
- The 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 threatened (as in the case of hurricanes) emergency; individually discuss with each insurer’s liaison the company’s catastrophe operations; individually review each insurer’s Disaster Response Plan; and discuss catastrophe operations and emerging issues.
- Disaster liaisons may be expected to remain on duty at the IEOC as determined by the Superintendent acting in consultation with coalition partners.
- 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 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 SOEM/New York City Office of Emergency Management, and other emergency responders via the 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.
- After a Disaster
- Miscellaneous Items
This circular letter endeavors to assist the health insurance industry in planning and preparing for, and responding to disasters that may befall the citizens and policyholders of New York State. 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 Department and the people of New York State.
Questions concerning any aspect of this circular letter should be directed to Principal Insurance Examiner Vincent Mazzarella, Disaster Response Coordinator, by phone at (212) 480-5440, by mail to the New York State Department of Financial Services, Disaster Response Coordinator, 25 Beaver Street, New York, NY 10004, or by e-mail to [email protected]
Robert H. Easton
Executive Deputy Superintendent
Additional Guidance on Creating a Disaster Response Plan
The Disaster Response Plan (Plan) is a separate document from a company's business continuity and disaster recovery plans and should be an operational document indicating the order in which actions will be taken to assure that resources are made available to policyholders in a timely manner. If your Plan provides affirmative answers to the following questions, it generally will meet the Department's standards for an acceptable Plan.
Your Plan should describe how you intend to provide your members and subscribers, as well as providers, with the resources they will need to recover from a disaster.
- Does the Company have a Plan?
- Is it a written Plan?
- Has the Plan been reviewed and approved by:
a) Senior Management?
b) Board of Directors or a committee thereof?
- Has a resolution:
a) been adopted by the Board of Directors attesting to the approval of the Plan?
b) if the answer to a) is “yes”, has such a resolution been submitted to the Department as evidence of the board's approval?
- Has Management identified additional resources that will be needed during a disaster? (For example, telephones, server capacity and staff.)
- Has Management analyzed its ability to provide the financial resources necessary to meet the cost of the additional resources that will be needed?
- Is a person/titled position named as being responsible for activating the Plan after a disaster is declared?
- Is a person/titled position named as being responsible for monitoring the Plan?
- Is a person/titled position named as being responsible for terminating the Plan following a disaster?
- Does the Plan define what constitutes a disaster?
- Are there clear guidelines to indicate when the Disaster Response Plan should be invoked?
- Has the Company established a disaster response team?
- Are the responsibilities of the disaster response team members segregated to establish clear reporting authority?
- Does the Plan indicate that there is a role for designated "disaster liaison" and/or back-up liaison?
- Does the Plan indicate that the designated “disaster liaison” and/or back-up liaison have been advised of their duties?
- Does the Plan provide for training of staff in order to prepare them on their responsibilities in the case of a disaster?
- Has the Company established varying levels of response based on the severity of the disaster?
Claimant Services: (Doctors & Hospitals as claimants)
- Does the Plan explain what steps the company has taken to ensure timely responses to claimants?
- Has Management provided for the additional claims handling capacity (system or personnel) that might be needed during a disaster?
- Does the Plan explain what steps will be taken to notify in a timely manner the company’s members/subscribers of any procedural changes made?
- Does the Plan explain what steps will be taken to notify in a timely manner its providers of any procedural changes made?
- Does the Plan explain what steps will be taken to notify in a timely manner its brokers/agents of any procedural changes made?
- Does the Plan describe how your company communicates with and responds to employees of a group located in state, when the employer is out of state during a disaster?
- Does the Plan describe how your company communicates with and responds to employees of a group located out of state, when the employer is in state during an emergency?
- If normal controls are not in place due to a disaster, does the Plan include any additional procedures for detecting fraud?
- Does the Plan include procedures for reporting fraudulent activity to the appropriate regulatory authorities?
Testing of Plan:
- Has the Plan been tested?
- Does the Plan indicate when the last test was conducted?
- Does the Plan indicate how often the Plan will be tested?
- Did the testing include the use of an alternate site for information technology (IT) systems?