Record First Quarter Losses
Feb 24, 2021

LEAD STORY

At least 69 people have died nationwide from winter storms or frigid conditions that began February 11.  The winter storm’s effects were most acute in Texas, but many states were hit hard in a storm-batter region that stretches to Ohio.  The damages will be significant and insurers could suffer record first-quarter catastrophe losses after this historic winter storm. 

 

DIDN’T THIS HAPPEN BEFORE?

Yes, but not to this extent.  In 2011, 3.2 million Texans lost power due to a winter storm that dipped into single-digit temperatures.  After the 2011 winter storm, two agencies, the Federal Energy Regulatory Commission and the North American Electric Reliability Corporation, conducted a study on how Texas could “winterize” its energy infrastructure.  On the high end, winterizing gas wells would cost an estimated $1.75 billion, according to the study.

 

WATER EVERYWHERE

An estimated 13 million people were under a boil-water order at one point, nearly half the population of Texas.  The freezing temperatures and loss of power caused pipes to freeze and break across the state causing water pressure to fall.  With water damage comes the fear of mold, which can start growing in one day, and moisture damage.  Insurers expect hundreds of thousands of claims from burst pipes and water damage affecting schools, businesses, and homes.  The Insurance Council of Texas estimated that losses could surpass the $20 billion cost figure from 2017’s Hurricane Harvey.

 

WHAT’S NEXT?

Officials in Texas announced investigations into the causes of the state’s widespread power outages and a spike in energy bills following the winter’s storms.  Energy prices rose from roughly $50 per megawatt hour to $9,000 with some Texans facing bills of up to $17,000 so far this month.  President Biden signed a major disaster declaration that can provide federal assistance for losses, including utility costs due to the storm.  Gov. Greg Abbott urged lawmakers to pass legislation to ensure the energy grid was prepared for cold weather in the future.  We’ll keep reporting on any regulatory or legislative changes that could affect our industry.

 

Coronavirus

 

PPP

The Biden administration announced changes for the Paycheck Protection Program focusing on helping small and minority owned firms as well as sole proprietors.  Starting today, the Small Business Administration will only accept applications for PPP loans from firms with fewer than 20 employees.  The administration also announced several changes to the program, including increasing loan amounts for sole proprietors and individual contractors, eliminating restrictions around delinquent student loan debt and non-fraud felony convictions as well as allowing some non-citizen business owners to apply.

 

RELIEF BILL

The House Budget Committee passed President Biden’s $1.9 trillion pandemic relief package, setting the bill for a full House vote later this week.  The package includes $1,400 stimulus checks for Americans earning less than $75,000 per year, direct funding for local and state governments, and higher funding for vaccine distribution and testing.  However, it is unclear if an increase to the federal minimum wage will be kept in the relief package.  Currently, the bill would increase the federal minimum wage to $15 per hour in five years.  We’ll keep reporting on this as it progresses.

 

Making Our Way Around the Country

CALIFORNIA SINGLE PAYER

In Sacramento, a group of Democratic lawmakers introduced legislation to create a single-payer health care system to cover all Californians.  The bill’s sponsors maintain that the “coronavirus pandemic has left millions without reliable and affordable health coverage” and the measure addresses those gaps in the system by eliminating private health insurance by shifting responsibility for administering and financing health coverage to the state government. The new system, called CalCare, would expand coverage to nearly 3 million uninsured Californians and provide benefits, including dental care, generous prescription drug coverage, and long-term care.  While this measure does not assign a price tag to the overhaul, a similar single-payer bill in 2017 would have cost an estimated $400 billion each year.

 

NEW MEXICO MEDICAL MALPRACTICE

The New Mexico House of Representatives narrowly passed a bill that would remove hospitals from coverage under the state Medical Malpractice Act (MMA).  The bill was approved 35-34 and now goes to the Senate for consideration. The legislation, House Bill 75, is aimed at shoring up the finances of New Mexico’s patient compensation fund, which helps pay for monetary damages in malpractice claims. The MMA created the Patient’s Compensation Fund to pay the major part of all malpractice liabilities incurred by physicians and seven other types of providers, including hospitals. The bill’s supporters said the fund should be focused on independent physicians who can’t get insurance elsewhere, not on large corporate hospitals that can obtain coverage on their own.  The measure triggered intense opposition from Republican legislators who said the bill would hurt, not help, the finances of the patient compensation fund.

 

HIGHER EDUCATION

The National Labor Relations Board (NLRB) ruled that adjunct professors and other non-tenure-track university faculty can only unionize in certain circumstances, narrowing an Obama-era precedent that had been rejected by at least one federal appeals court.  The board said faculty members who are not eligible for tenure can only join unions if their schools have committees that exercise “effective control” over curricula and school policies and they are not permitted to join them. Otherwise, faculty members are management employees who cannot unionize under the National Labor Relations Act.

 

PETS

As the pandemic wears on, many folks are turning to pets to help during this challenging time.  It’s true there are many health benefits of having a pet, including lowering blood pressure to reducing stress.  National Love Your Pet day was earlier this week.  We’re here to show our love for Kenai, Carrots, and Princess.   Stay safe, stay well, and stay connected.

Tags:

Share This
Subscribe
 
* Required Fields