PIA Requests Advance Emergency Orders From TDI

The National Association of Professional Insurance Agents and its affiliate, the Texas Insurance Professionals, are recommending that Texas insurance regulators and federal authorities ease certain insurance regulations that apply to insurance claims processing, to assist consumers in the path of Hurricane Rita.

PIA announced that behalf of the PIA members in Texas it has requested that the Texas Department of Insurance issue emergency rulings and take the appropriate actions before the hurricane makes landfall.

“It is important that the insurance commissioner take these steps now to prepare for the claims our customers will be filing,” said the PIA affiliate president Jim Beathard of Conroe, Texas. “These are essentially the same recommendations that PIA made in the wake of Hurricane Katrina, which have been largely adopted in the states affected by that hurricane.”

PIA National and the Texas Insurance Professionals recommend that the DOI issue the following emergency rulings and take the following actions, recognizing that they will need to be tailored to the specifics of the aftermath of Hurricane Rita. PIA also calls on carriers to voluntarily make modifications in their practices to achieve the effects of these directives:

1. Direct that for a specific period of time, insurers suspend insurance premium payments for all affected insureds for property and casualty, as well as life and health insurance, both personal and commercial lines. As we know, once into the affected areas, PIA insurance agents and their customers will find that much of what was insured is gone. Claims will be the first order of insurance processing and servicing needs.

2. Authorities should work with insurers to suspend for some period of time — either in whole or in part — account current insurance premium payments from directly affected insurance producers. Please note: carrier assessments of this will need to consider at least three factors:

a. Agencies directly located in the affected areas;
b. Agencies with banking facilities located directly in the affected areas;
c. Agencies located on the periphery of the most affected areas, but whose insureds are in the most affected areas and subject to the DOI temporary order to suspend the insurance premiums payment by consumers.

3. No insurance company should charge interest for periods of time in which insurance premium and/or account current payments are suspended.

4. Direct suspension of all cancellation and non-renewal notices issued (being issued), and require coverage be continued for a specific time (order renewable). When the suspension is lifted, insurers will need to comply with the time frames and procedures from that date forward for issuing notices of cancellation and/or non-renewal. The DOI may, at its discretion, require coverage remain in force until insurance markets recover sufficiently.

5. Include all the insurance producer trades associations in all insurance consumer contact efforts. Many insurance consumers know their local insurance agent, but may not know which companies insure them.

6. PIA requests that the Federal Emergency Management Agency modify claims adjustment procedures to reflect the realities of this event. For example, most affected flood insureds will not be able to contain and retain the damaged contents, interior and exterior rubble from their properties for adjusters to review. This is because most areas will be under the orders of civil authorities to remove all debris for public health and safety reasons.

7. As quickly as possible, the DOI, FEMA and insurers should coordinate to declare specific geographical areas as “total losses,” especially for private homes, allowing total claims payouts to proceed. When the wind, rain and flooding wipes away entire homes, this is a total loss, as is already evident from the news coverage coming out of the area.

8. We ask that as much as possible after landfall, all insurance-related recovery teams (state, federal and private sector) need to home-base in the same close geographical area just outside the devastation in each state to engender maximum effectiveness in coordination among all. Having significantly different geographically spread out staging sites among insurers, FEMA, state and producer association efforts proved to create additional challenges in Florida last year than was needed for the response effort. PIA affiliates in the affected states are ready to assist with this coordination.

9. Please be sure that 1-800 phone lines are working in affected areas. After Hurricane Katrina hit Louisiana, Mississippi and Alabama, we found that toll-free 800 numbers did not work for many days, while non-toll free numbers did.

10. Be sure that all insurance-related recovery units also have with them ALL the general state-federal recovery information, locations and contact information to share with all consumers with whom we come in contact.

The local insurance agents who make up the PIA family are committed to assisting the members of our American family recover from this impending catastrophe.