Around the PIA Western Alliance States- Week of October 21, 2024

California — Experimental Flood Public Paid Insurance: Insurance Commissioner Ricardo Lara announced a community-based flood insurance initiative for the City of Isleton — a first-of-its-kind for the state — as part of a two-year $200,000 grant. This innovative approach to insurance will provide payouts to Isleton residents if floodwaters reach a pre-determined depth.

Isleton, a small city in the Sacramento-San Joaquin Delta, is prone to flooding and lies within a 100-year floodplain. The pilot project is spearheaded by the California Department of Insurance, funded by the California Department of Water Resources (DWR), and implemented by the City of Isleton’s Delta Geologic Hazard Abatement District (Delta GHAD).

Commissioner Lara has long envisioned the need for innovative insurance approaches to help address the risks of climate change. Experts convened by Commissioner Lara as part of his California Climate Insurance Working Group specifically recommended exploring community-based parametric flood insurance in its 2021 Climate Insurance Report titled “Protecting Communities, Preserving Nature, and Building Resiliency”, noting Geologic Hazard Abatement Districts as potential leaders of such projects. This grant announcement also comes on the heels of Commissioner Lara testifying last week about the potential role of parametric insurance before the California State Assembly Committee on Insurance in its informational hearing, “Parametric Insurance: What it is & the Role it Could Play.”

“We have seen the devastation that climate-induced flooding can have in California in such places like Pajaro, Tulare Lake, and most recently in San Diego County,” Commissioner Lara said. “We need to help our communities be more resilient to climate change and protect them from the devastating effects of flooding. Insurance is a key driver of financial resilience, and we need to think creatively about how new insurance pilots like this Delta community project can be tested and scaled to help our most vulnerable communities.”

DWR administers portions of the National Flood Insurance Program (NFIP), on behalf of the Federal Emergency Management Agency (FEMA), which enables property owners in participating communities to purchase insurance as protection against flood losses in exchange for state and community floodplain management regulations that reduce future flood damages. In the face of continued climate extremes, DWR is committed to exploring innovative methods to address flood risk, including alternatives to the NFIP that supplement existing coverage.

“Growing weather extremes in California requires re-examining how we protect communities from flooding and the role of insurance in getting people back on their feet if destructive flooding does occur,” said DWR Director Karla Nemeth. “DWR is proud to partner with the Insurance Commissioner and the City of Isleton to test new models for affordable flood insurance. Ultimately, we hope this effort can lead to models of affordability for people across California, particularly those with limited income.”

DWR has dedicated $100,000 this budget year and will deliver an additional $100,000 next year for the pilot program, which will further the state’s commitment to exploring non-structural methods to addressing flood risk, including alternatives to the NFIP. The Delta GHAD is the first special district in the state to design a community-based flood parametric insurance product.

“It’s wonderful for the City of Isleton to have this seed money from DWR for the GHAD’s parametric insurance,” said Iva Walton, President of the Delta Communities GHAD. “This is something that will keep Isleton afloat in the event of a flood. I am excited to share with the community the benefits of moving forward with this unique district.”

In 1972, a levee failure caused a flood that inundated the city and much of the surrounding agricultural areas. Residents were evacuated for many months. Current residents who experienced that flood remember clearly the devastation, fear, and loss they suffered. In 2023, the city voted to create the Delta GHAD as a special district which is empowered with the authority to assess and use fees to purchase private flood insurance policies to assist community members in recovering from a flood.

This community-based insurance product would provide important financial resilience to all Isleton residents in the event of a significant flood. It would be separate from and augment existing insurance coverage that Isleton residents may have through the NFIP. This initiative would provide a relatively small but meaningful insurance payout that residents could use flexibly to survive the aftermath of a major flood. It could be used to address structural damage to property, or it could cover costs associated with evacuation such as lodging, food, and transportation, or even business or job interruption.

DWR also administers the Small Community Flood Risk Reduction Program, which has distributed over $45 million to 35 communities to reduce flood risk, as well as the Flood Emergency Response Projects Grant Program, which has awarded $50 million in flood emergency response grants to improve local flood emergency response and to increase public safety since 2012.

California — Injured Workers Treated at Less Cost: The Workers Compensation Research Institute study, CompScope Medical Benchmarks for California, 25th Edition took a long look at prices, medical payments and how they are utilized and compared them to16 other states.

It turns out that California payments are 10% below those 16 states.

California did — however — have more claims in which workers were off more than 7 days because of injuries.

Source link: Insurance Journal — https://bit.ly/4dWRzOT

Hawaii — Wildfire Survivors will get Another Year of Housing Help from FEMA: The Federal Emergency Management Agency (FEMA) is going to extend help for the victims of the Maui wildfire a little over a year ago.

The agency has been leasing homes for 1,200 households and giving subsidies to 500 others. That will continue for the next year.

Source link: Insurance Journal — https://bit.ly/48i1Nbo

Oregon — Oregon DFR to host virtual Innovation Hub on green finance: The Oregon Division of Financial Regulation (DFR) will be hosting an Innovation Hub on Monday, Oct. 28, from 8:30 a.m. to noon. The event will be held virtually due to logistical issues. It was originally scheduled to be at the Oregon Museum of Science and Industry (OMSI) in Portland. This year’s theme is “Can innovative technologies make green finance better?”

The virtual event will be hosted by Nicole Ferroux, a senior policy advisor at DFR and Innovation Hub liaison, and will include two panel discussions: Artificial Intelligence and Green Finance, and Blockchain and Green Finance. After the two panel discussions, DFR Administrator TK Keen will host an executive chat with Washington State Department of Financial Institutions Director Charlie Clark. Their discussion will center on regulating the use of innovative technologies in green finance.

“We are always looking for ways to encourage innovation in Oregon, particularly green finance innovations that help us combat climate change,” Keen said. “Our Innovation Hub has allowed us to keep numerous conversations with stakeholders on green finance and green innovations going, and the OMSI event is another avenue for engagement on this important topic.”

The first panel includes Jon Down, professor at the University of Portland and founder of Gen AI Corp.; Josh Cole, business operations lead at Modernist Financial; and Kirsten Anderson, deputy administrator at the Oregon Division of Financial Regulation.

The second panel includes Alex Murray, assistant professor of management and director of the Intelligent Futures Lab at the University of Oregon; Mike Zajko, co-founder of Lattice Capital; and Brooke Pollack, founder and managing partner at Hutt Capital.

What does this year’s theme, “Can innovative technologies make green finance better?” really mean?

“Green finance, which includes any financial product or service created to encourage the development of a more sustainable economy, has come under some deserved scrutiny in recent years,” Ferroux said. “Greenwashing scandals, questions regarding the longevity of the financial outcomes associated with these products, and a variety of regulatory issues have raised the question of whether green finance will continue to grow or will shrink away as a fad. This year’s event explores whether innovative technologies – namely artificial intelligence and blockchain technology – can help industry and regulators overcome these challenges to move this sector forward.”

For more information about the event, including the Zoom and registration links and the bios of each speaker, visit the DFR website.

Washington — Consumer notice template update and translated versions: During the 2024 Legislative Session, Senate Bill 5986 (SSB 5986) was passed to include ground ambulance service organizations in the Balance Billing Protection Act (BBPA).

OIC updated the consumer notice template to include these services. The consumer notice has been translated into the top twelve languages and is now available on the What consumers need to know about surprise or balance billing webpage.

The consumer notice template informs consumers of their rights and protectns against balance billing. Medical providers and facilities must make this available to consumers on their website and provide it to consumers if asked.

Beginning January 1, 2025, ground ambulance services organizations also will be required to provide the notice to consumers and post the notice on their websites.

If you’ve received this message, you are signed up to get all updates on our balance billing work.

Washington — Ten insurers approved to sell health insurance to small businesses in 2025: Ten health insurers have been approved to sell group health plans to small employers in 2025.

Insurers requested an average premium increase of 11.9%, which was approved. The new rates take effect after Jan. 1, 2025, when the employer's plan renews.

About half of small employers nationwide offer their employees health insurance. Nationally, 53% of small employers offer health insurance to their employees.

The average annual premium for an individual employee is $1,368, up 6% from 2023; the average annual premium for an employee with family coverage is $6,296, which is up 24% over the last five years. Employers pay an average of $7,584 on top of their employees’ share for health coverage.

“It’s a tough decision for small businesses to make about whether or not to offer their employees health coverage. It’s a promising sign that our state has over a dozen insurers offering small employers plans,” said Washington state Insurance Commissioner Mike Kreidler. “My office sent a report to the Legislature in August with five potential policy options that could make health care more affordable in Washington. We’re hopeful we can improve the underlying factors that have pushed costs up.”

Click this link for more details: https://bit.ly/4dX4ksV