Students are diving back into routines this week, as summer camps and classes are in full swing. The same is true at the Capitol. House and Senate committees of jurisdiction that cover several high-profile risk and insurance-based issues are very active this week. The Way takes a closer look at the busy summer schedule in D.C.
Earlier this week, Chairwoman of the House Financial Services Committee (HFSC), Maxine Waters (D-CA), introduced H.R. 3167, the National Flood Insurance Program (NFIP) Reauthorization Act of 2019. The legislation provides for a 5-year reauthorization of the NFIP. Currently, NFIP authority will expire on September 30, 2019. Yesterday, the HFSC held a markup, where the committee debated the bill’s extension period and the degree of funding for mapping, technology updates, and floodplain management services. We’re studying the bill, which is the 12th extension of the NFIP in the last decade.
MICRO & ECONOMICS
Two task forces of the HFSC handed out the syllabus to review the accelerating course of Financial Technology (Fintech) and the rise of Artificial Intelligence (AI) this month. The task forces will hold back-to-back hearings called, “Overseeing the Fintech Revolution: Domestic and International Perspectives on Fintech Regulation” and, “Perspectives on Artificial Intelligence: Where We Are and the Next Frontier in Financial Services,” on June 25th and 26th. Representatives Stephen Lynch (D-MA) and Bill Foster (D-IL) chair the Fintech and AI task forces. We’ll check back for further assignments and required readings.
Across the Capitol, the Senate Committee on Banking, Housing and Urban Affairs will hold a hearing on June 18th entitled, “The Reauthorization of the Terrorism Risk Insurance Program.” Committee members will take testimony from insurance industry specialists on terrorism coverage placement and property practices from the brokerage sector. Additionally, economists from The Wharton School’s Risk Management and Decision Center and the Congressional Research Service at the Library of Congress are scheduled to testify. TRIA is set to expire at the end of 2020, just before the close of this Congress.
And lastly, seventeen state treasurers and attorneys general from 34 states and four U.S. territories have shown their support for the Secure and Fair Enforcement Banking Act (SAFE Act), authored by Congressman Ed Perlmutter (D-CO). Supporters of the SAFE Act argue that licensed marijuana businesses are pushed out of the banking system, increasing their reliance on cash, making them targets for crime, and complicating the tax process. The bill passed the HFSC in March, but to date, the Chairman of the Senate Committee on Banking, Housing and Urban Affairs, Senator Mike Crapo (R-ID) has not yet called for a hearing on this issue. This is the fourth time a measure to protect financial institutions from penalties for serving the cannabis market has been introduced to Congress. We’ll see if it passes this term.
New York Regulatory Activity
The New York Department of Financial Services launched the first-in-the-nation cybersecurity division designed to protect consumers and industries from digital threats. The move comes more than two years after the agency promulgated sweeping cybersecurity regulations over businesses in the financial services sector. The division will be led by the current chief of the cybercrimes unit of the U.S. Attorney’s Office of New Jersey, a role that oversees cases in New Jersey’s federal court involving national security threats, malware, and major hacks targeting corporations.
WORKERS’ COMPENSATION BOARD
The New York Workers’ Compensation Board (WCB) formally adopted its drug formulary and prescribing rules for injured workers. The formulary will go live on January 5, 2020. The formulary includes a comprehensive list of requirements for prescribing and mandated reviews of controlled substances like opioids and muscle relaxants. These drugs may not exceed a seven-day supply on the first fill. The rules also call for insurers and self-insured businesses to provide two levels of preauthorization review: one to the payer; and a second review to a medical professional if the physician objects to the outcome of the first review. The WCB provides its stakeholders additional information about the formulary and its procedures.
Making Our Way Around the Country
The New Zealand Earthquake Commission (EQC), the state-owned residential property disaster insurance entity, has purchased its largest ever reinsurance program, with coverage running up to $6.2 billion. The purchase represents a 12% increase on the $5.55 billion reinsurance program purchased in 2018 and a 28% increase in reinsurance limit since its 2017 program came in at $4.83 billion, reflecting the increasing amount of risk the EQC has been assuming and the resulting need for more risk transfer. The program provides cover after the EQC has suffered $1.75 billion of loss. We’re keeping an eye on this Seismic activity.
The Washington State Department of Labor and Industry (L&I) announced plans to create standardized medical bill reporting for self-insured employers. State regulators suggest that the reporting will build data integrity, improve industry benchmarking, and support policy decisions. Under the proposed rules, self-insured employers would be required to report medical bills through the medical bill electronic data interchange (EDI). The proposed start date for the measure would be January 1, 2020, and the department will hold a public hearing on July 15, 2019.
The Ohio House of Representatives passed the state’s 2020-2021 workers’ compensation budget, which included a provision that would make it difficult for illegal workers to file claims for workers compensation. The measure stipulates that injured workers can only file for workers’ compensation if they truthfully acknowledge whether they are a citizen, authorized worker, or an illegal or unauthorized worker. Claimants who provide false information are ineligible to receive workers’ compensation or benefits and will be subject to prosecution.
HOURS OF SERVICE
The Office of Management and Budget inside the White House has not released the Federal Motor Carrier Safety Administration’s much-anticipated final rules on Hours of Service (HOS). The industry was tracking June 7th as the expected date for the rule. In the meantime, provisions of the Transportation, Housing and Urban Development (THUD) appropriations bill for the 2020 fiscal year now contains language that would prohibit the FMCSA from “eliminating the 30-minute break.” This measure would set up a potential conflict between lawmakers and regulators at FMCSA. We’ll see if this THUD budget bill provision causes the FMCSA to revisit the 30-minute break requirement, an issue raised and debated during previous notice and comment periods.
Back to our lead story this week, the U.S. Consumer Product Safety Commission (CPSC) issued a critical new child summer safety report this week. The CPSC highlights the need for continued vigilance to combat drowning, the leading cause of unintentional death among children ages 1 through 4-years-old. The data found June as the month with the highest fatality incident, with residential locations making up 72 percent of reported fatal drowning incidents. The Commission’s report is a good lesson for all of us to stay vigilant and “Pool Safely” this summer.