October 13, 2021
ACTING SUPERINTENDENT ADRIENNE A. HARRIS ANNOUNCES DFS WILL REQUIRE CONTINUING EDUCATION IN FLOOD INSURANCE FOR INSURANCE PRODUCERS AS FLOOD RISK INCREASES DUE TO CLIMATE CHANGE
DFS Also Announces First-in-the-Nation Requirement for Training in Diversity, Inclusion and the Elimination of Bias for Insurance Producers and Public Adjusters
Acting Superintendent of Financial Services Adrienne A. Harris today announced that the New York State Department of Financial Services (DFS) is mandating continuing education in flood insurance for property/casualty insurance producers in response to the increasing risk of flooding due to climate change. In addition, DFS is the first state regulator to require education in diversity, inclusion and the elimination of bias for its insurance producer and public adjuster licensees. Requiring insurance producers and public adjustors to take continuing education in these areas will enhance their competency and help them better serve all New Yorkers.
“Requiring education on flood insurance and diversity and inclusion is not only timely, it is in the best interest of consumers,” said Acting Superintendent Harris. “These additional education modules will help producers improve flood insurance availability for consumers and hold producers and adjusters accountable in implementing diversity and inclusion initiatives to be aware of potential bias and racial justice when servicing diverse consumers.”
In addition to mandating flood insurance education for all property/casualty insurance producers, DFS is requiring enhanced flood insurance education for property/casualty insurance producers who sell flood insurance through the National Flood Insurance Program (NFIP). This enhanced requirement will ensure that consumers receive accurate NFIP quotes and are not inadvertently underinsured for flood damage. Furthermore, this requirement will educate producers on flood insurance coverage for dwellings in urban environments and clarify the role of adjusters to promptly resolve claims for consumers. As evidenced by the flooding caused by Tropical Depression Ida, it is more important than ever for insurance producers to understand the NFIP and consumers’ flood insurance needs.
DFS’s continuing education requirement in diversity, inclusion and the elimination of bias for producers and adjusters builds on DFS’s action to promote diversity, equity, and inclusion in the insurance industry. This requirement will help producers and adjusters to better service a diverse population of consumers and be culturally sensitive and aware when interacting with consumers and members of the public.
These continuing education requirements are part of DFS’s efforts to holistically address the effects of climate change on New York communities and the financial services industry. DFS is the first U.S. financial regulator to create a comprehensive climate program that focuses on protecting consumers , managing the financial risks from climate change, and spurring green growth. DFS has established a set of expectations that banks and insurers integrate the consideration of the financial risks from climate change into their governance frameworks, risk management processes, and business strategies, and develop their approach to climate-related financial disclosure.
In March 2021, DFS issued a circular letter to all New York-regulated insurers outlining its expectation that insurers make the diversity of their boards and senior management a business priority and key element of their corporate governance. DFS is also collecting data relating to the gender, racial and ethnic composition of the boards and senior management of certain of its regulated entities and intends to publish the data on an aggregate basis.
“With the impact of climate change, it is now more important than ever that New Yorkers receive accurate information about flood insurance,” said New York State Senator Neill D. Breslin. “We thank Acting Superintendent Harris and DFS for their action to help educate New Yorkers about the financial risks of climate change and move the social justice movement forward by requiring diversity and inclusion education.”
“100 years storm are becoming more frequent due to climate change and we must all do our part to be resilient against these storms,” said New York State Senator Kevin A. Cahill. “We applaud DFS for implementing these educational requirements for producers, which will protect New Yorkers by ensuring they have adequate insurance coverage, which is becoming more important as we face ever increasing risks as a result of our changing environment.”
Read a copy of the regulation on the DFS website.
The regulation takes effect November 12, 2021 and applies to licenses renewed on or after April 1, 2022.