BREXIT STILL TOPS THE INTERNATIONAL CHARTS
Last week the United Kingdom voted to leave the European Union. The vote struck like a sledgehammer through political and financial arenas around the world.
Following the Brexit vote, British Prime Minister David Cameron announced his resignation, effective October 2016. Cameron ruled out a second nationwide EU referendum, despite a popular petition suggesting another Brexit vote. The formal process of withdrawing from the EU is a negotiated, two-year procedure once Britain activates Article 50 of the EU Treaty. Cameron intends to leave this task to the nextPrime Minister. In the short term, the table is set for a clash with Scotland, whose First Minister Nicola Sturgeon is actively seeking a referendum to have Scotland remain part of the European Union.
Dubbed the "Brexit Blues," world financial markets have not responded favorably to the UK's decision to leave the EU, trigging instability throughout Europe. And, in the insurance market, we expect to see firms now begin to assess Brexit's implications on "passporting", a financial practice that has allowed London to serve as base of operations for insurance and reinsurance agreements throughout Europe, including Germany and Switzerland. We'll stay tuned in to these developments.
THE PANAMA CANAL
Sunday, Vice President Joe Biden and more than 70 members of Congress joined Panamanian President Juan Carlos Varela for the official opening of the newly enhanced Panama Canal. The 10-year, $5.4 billion construction effort expanded the shipping lanes of the 102-year-old canal to accommodate larger vessels, such as neo-Panamax container ships.
While applauding the engineering feat, the maritime community warns of the increased risk and exposure through the region. Shipping experts call out more traffic in untested waters with vessels carrying more valuable cargo, making their way across the canal.
MAKING OUR WAY AROUND THE COUNTRY
STATES OF EMERGENCY
President Obama declared a state of emergency for more than 40 counties in West Virginia where two dozen people have been killed in devastating flooding through the state's coal mining region. This is the most damaging flood in West Virginia since 1985. Across the country, Governor Edmund G. Brown declared a state of emergency for more than 70 square miles of Kern County near Bakersfield, California, which are ablaze in the Erskine Fire. More than 2,000 firefighters have contained 40% of the flames that have claimed multiple lives and destroyed more than 200 structures to date.
The Federal Aviation Administration released its long-awaited commercial drone rules that now permit low-altitude, daylight flights of unmanned vehicles weighing less than 55 pounds, and open the door for industry to seek a wide range of waivers. The rule's provisions are designed to minimize risks to other aircraft and people and property on the ground. The regulations require pilots to keep an unmanned aircraft within visual line of sight. Operations are allowed during daylight and during twilight if the drone has anti-collision lights. The new regulations also address height and speed restrictions and other operational limits, such as prohibiting flights over unprotected people on the ground who aren't directly participating in the UAS operation.
The Massachusetts Division of Insurance (DOI) seeks to amend rules governing workers' compensation self-insurance groups and large-deductible policies by refining the types of investments in which self-insured groups may invest and acceptable forms of security. The DOI is proposing a comprehensive regulation to govern all workers' compensation insurance policies with deductibles of $75,000 or more. It also seeks to prohibit insurers from issuing large-deductible policies to employers whose annual premium, without a deductible, would be less than $375,000.
Gov. Andrew Cuomo signed into law four significant measures to address opioid addiction. One of the measures (effective in 30 days) limits initial prescriptions for acute pain to seven days, down from 30 days, with refills or renewals after further consultations. There are exceptions for chronic pain, hospice use, and palliative care. The NY measure parallels a law signed by Massachusetts Governor Charlie Baker in March.
INDIANAPOLIS & 200 OTHER MAJOR AMERICAN CITIES
Whether it was Pericles in the Funeral Oration or Pacino in City Hall, the sentiment is the same - "all good things on Earth flow in to the City because of the City's greatness." More than 200 mayors from nearly every major U.S. city gathered this week in Indianapolis for the 84th U.S. Conference of Mayors to share critical public risk management strategies, find ways to build smarter cities, and urge renewed kindness and compassion across America's urban areas.