After All The Fire, After All The Rain
Nov 22, 2017


The National Oceanic and Atmospheric Administration (NOAA) places 2017 atop the list of record loss years related to natural disasters, with at least 15 billion-dollar events. This month, thirteen federal agencies, jointly working under the congressionally mandated National Climate Assessment initiative, released a comprehensive report detailing the impact of human activity on disruptive weather events. On the heels of one of the most destructive Atlantic hurricane seasons on record, the National Climate Assessment concluded that human activities have pushed global temperatures to the highest level in modern civilization adversely affecting sea levels and threatening coastal and environmental disasters. We look back at several of the major events that will shape risk and insurance policy moving forward. 



In late August, Hurricane Harvey made landfall on the gulf coast of Texas as the most powerful hurricaneto hit the mainland United States since 2005's Hurricane Katrina. It delivered more than 30 inches of rainfall in Houston and the surrounding region. One week later, Hurricane Irma made landfall in the Florida Keys, becoming the first time in recorded history that two category 4 storms struck the United States in the same season. Hurricane Maria devastated the U.S. territory of Puerto Rico, with "apocalyptic" wind and rain killing hundreds, destroying up to $85 billion of insured property, cutting power, severing most of the telecommunications to the mainland, and creating a massive strain on the island's struggling economy and infrastructure. And, Hurricane Ophelia, the tenth hurricane to form in the Atlantic, slammed into Ireland in September becoming the strongest storm to hit the Emerald Isle in 50 years.



In October, a wall of wildfires tore through Napa, Sonoma, and Mendocino Counties in Northern California. The fires destroyed several of the region's most prominent wineries, vineyards, and uninsured cannabis farms. The fires ranked among the most destructive in the state's history.



In response to the fires, California Insurance Commissioner Dave Jones approved the filing of the first admitted commercial insurance company to provide cannabis business insurance in the Golden State. Last week, the House of Representatives voted to reauthorize the National Flood Insurance Program for five years. The Claims Licensing Advancement for Interstate Matters (CLAIM) Act H.R. 3363 was introduced in the House, which would expedite the resolution of insurance claims in the wake of a catastrophe. We will continue to follow the legislative and regulatory reaction to 2017's historic natural disasters.

Workers’ Compensation


The Bureau of Labor Statistics (BLS) released a comprehensive report detailing increased safety of U.S. workplaces. The current private sector injury rate of 2.9 injuries per 100 employees (4.7 per 100 for the public sector) has improved steadily since 2003, when the rate was 5.0. The 2016 estimated total number of work-related injuries and illness was 3.53 million, down 4% from 3.66 million cases in 2015. Throughout 2017 we saw state departments of insurance reflecting these outcomes in workers' compensation rate filings. Many states, including Indiana, California, and Connecticut saw double digit rate reductions. More than a dozen other states including New YorkKansas, and even Florida witnessed significant rate reductions for the cost of workers' compensation coverage.



All eyes were on the Florida Legislature last spring. Lawmakers could not reach agreement on high-profile measures aimed at workers' compensation reform in response to the Florida Supreme Court striking two parts of the system involving indemnity rates and attorneys' fees as unconstitutional. This summer, the Pennsylvania Supreme Court struck down part of the Keystone State's workers' compensation act, eliminating the American Medical Association (AMA) guidelines to cap benefits paid out to severely injured workers. And this fall, in a 5-3 decision, the Oklahoma Supreme Court ruled that the provision of the WC act that forfeited benefits to workers who repeatedly missed medical appointments was unconstitutional.



In late June, the Occupational Safety and Health Administration (OSHA) and the U.S. Department of Labor (DOL) set a December 1st compliance date for electronic data submission. However, it also announced plans to issue a separate proposal to reconsider, revise, or remove other provisions of the electronic record-keeping rule, including the rule's anti-retaliation provisions. The DOL is also appealing a Texas judge's decision to strike the overtime rule established during the Obama administration. The DOL will ask the court to stay the appeal to give officials time to rewrite the rule, as it mines through more than 140,000 comment submissions.  



In March, President Trump signed an executive order to create the task force, Commission on Combating Drug Addiction and the Opioid Crisis. On the eve of the Commission's November 1st deadline for action, the administration declared the opioid epidemic a public health emergency and pledged federal resources to help combat the crisis that killed 64,000 people in the U.S. last year. We also saw unlikely litigants take to the courts on drug related issues. More than 100 cities and states sued the makers of prescription opioid drugs for municipal damages related to addiction, overdose, and increased policing. And, one 12-year-old girl sued U.S. Attorney General Jeff Sessions in an effort to legalize medical cannabis nationally.



In April, the United States Senate confirmed Neil Gorsuch as 113th justice of the Supreme Court, filling the 419 day vacancy following the death of Justice Antonin Scalia. In October, the Supreme Court is poised to a "blockbuster" docket, including the constitutionality of union dues, challenge non-jury patent disputes, and cases about data privacy, voting rights, and gerrymandering. We've got our eyes on the Court.



Tomorrow is Thanksgiving in the U.S. We extend our warmest gratitude to our readers for making 2017 a year to remember at The Way. We appreciate your feedback, support, and your loyal readership. In a tumultuous year, it was our pleasure to bring you the best of our industry-from our littlest heroes, to the industry's biggest causes, and the brightest stages. Thank you for helping us shape and the deliver the critical stories of the year, and take home a few meaningful recognitions and awards in the process. From all of us at The Way, have a blessed holiday!

About The Way

The Way is Gallagher Bassett's weekly governmental briefing on state and federal affairs that affect our industry. We thank you for starting your Wednesday morning with us. Please be sure to follow #GBTheWay for additional news and updates as we make our way throughout the country on the issues affecting our industry. For more information, please connect with GB on LinkedIn, follow us on Twitter, or contact the authors, Greg McKenna or Cari Miller, directly. 


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