Blazing California
Nov 6, 2019


Wildfires have returned to California with a spirit of vengeance.  Firefighters have been continuously battling numerous blazes trying to save millions of people, homes, and national treasures from the flames.  Governor Gavin Newsom declared a statewide emergency as wind- fueled wildfires north and south of the City of Angels have forced the evacuation of 200,000 people.  This week we take a closer look at the risks, available insurance, and claims related to the wildfires.



More than 350,000 Californians have had their fire insurance policies canceled this year.  With the increased incidence of fires in California, insurance companies have limited their exposure in fire-prone areas. Carriers have paid over $24 billion in claims in the past two years. Fire insurance is available but often at a prohibitive price.  California Insurance Commissioner Ricardo Lara said it's time for action on rates, except the Department of Insurance "doesn't have that authority yet.”


This season’s wildfires are testing the state’s new emergency smoke protection standards for workers as employers respond to unhealthy particulate levels in the air.  California’s emergency regulations, adopted last summer, require employers to provide respirators to workers and educate them on how to use the masks.  Employers must alter schedules when fine particulate matter reaches certain levels.  Additionally, California’s law mandates that every exposed employer have an employee illness and injury prevention plan and they must update their compliance strategy.


In response to the California wildfires, the Federal Motor Carrier Safety Administration (FMCSA) has suspended certain regulations, including hours of service (HOS) and Temporary Operating Authority Registration fees, for truck drivers who want to provide direct assistance in the state. The FMCSA issued a Regional Emergency Declaration for the State of California in response to widespread wildfires and extreme weather including unprecedented high winds, resulting in the immediate threat to human life and public welfare. Trucking companies hauling supplies, goods, equipment, and fuel into California, or providing other emergency assistance, are exempt from Parts 390 through 399 of the Federal Motor Carrier Safety Regulations (FMCSRs).



The tens of thousands of California residents harmed by last year's devastating wildfires received a court-ordered reprieve this week to file claims for compensation from the utilities alleged to have caused the 2018’s blazes.  The U.S. District Court in for the Northern District of California will oversee a two-month extension.  The utility company has reportedly received over 70,000 claims and processed 45,000, with another 20,000 to 25,000 claims waiting to be processed.



Finally this week, the Trump administration formally notified the United Nations that the U.S. is withdrawing from the Paris climate agreement.  The withdrawal will be complete this time next year, after a one-year waiting period has elapsed.  Secretary of State Mike Pompeo said in a statement that the U.S. “will continue to work with our global partners to enhance resilience to the impacts of climate change and prepare for and respond to natural disasters.”  Nearly 200 countries signed on to the agreement in 2015 and made national pledges to reduce greenhouse gas emissions. Each country set its own goals, and many wealthy countries, including the U.S., also agreed to help poorer countries pay for the costs associated with climate change. The U.S. is now the only country to pull out of the pact.  We’ll keep following the story to see what happens next.




A sharply divided U.S. House of Representatives voted to approve a resolution setting the ground rules for the Impeachment Inquiry into President Trump. The measure, which passed largely along party lines, 232-196, sets the stage for the proceedings to move into the public view.  As such, the House released transcripts of depositions of its investigative process and served subpoenas on White House officials, but there is some question as to whether they will appear to testify.



Recall that the government shutdown date is November 21st, Congress’ last day in session before the Thanksgiving break.  This now sets up a face-off between the Congress, which will establish the appropriations bill to fund the government’s activities, and the President who must sign it.  A growing number of commentators on Capitol Hill believe that Congress can override the president’s veto of a spending bill.  We will track the impact of this potential impasse. 


Making Our Way Around the Country


The U.S. Department of Agriculture released its long-awaited “Hemp Rule.”  Under the rule, which is effective immediately, states or tribes must submit plans to keep records on hemp-producing land, test the levels of delta-9 tetrahydrocannabinol (THC), and dispose of plants with high THC levels.  Producers must also obtain a license from the USDA. The rule is effective through November 1, 2021.



The National Academy of Social Insurance released its annual report on workers’ compensation.  The researchers used data from 2017 and compared trends in all 50 states and the District of Columbia. Comparing 2017 benefits with 20 years ago, the study found that worker benefits have decreased to 80 cents per $100 of covered wages in 2017 from $1.17 in 1997. Employer costs for workers’ compensation have increased, but have decreased as a percentage of covered wages overall, and declines in both employee benefits and employer costs have persisted.  It is important to note the Department of Labor has previously relied upon NASI’s reporting its evaluation of the sufficiency of state workers’ compensation systems.



The Pennsylvania House Labor and Industry Committee passed House Bill 1234, which would allow up to 300 weeks to file a claim from the diagnosis of an occupational disease with a long latency, including asbestos-related cancers.  Speaker of the PA House Mike Turzai (R-Allegheny) applauded the bill, “those who have latent occupational diseases will be able to file claims in the workers’ compensation system, thereby making it efficient and fair to both employees and employers.” The bill will now move to the full Pennsylvania House for consideration.



Nevada’s Paid Family Leave Act goes into effect on January 1, 2020. The measure provides employees with a paid leave of absence for any or no reason.  Employers with 50 or more employees are covered under the bill and employees are eligible for the benefit after 90 days of employment. Under the Act, employees incur .77 hours of leave for every 40 hours worked. Advocates for the bill argue that only 19% of workers have access to FMLA-like programs, making it one of the foremost issues among the 2020 Presidential campaigns.



We are in Las Vegas for the National Workers’ Compensation and Disability Conference.  Each year the conference brings together leaders from across the industry and around the country to learn from each other, network together, and help advance the state of workers’ compensation claims programs today.  If you are in town for the conference, drop by the Gallagher Bassett’s Booth 2525 to connect with us.  Fly safely.  We’ll see you in Vegas! 


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