New York state is getting serious about disaster planning, and it's requiring insurance companies to demonstrate their commitment as well. On March 29, Department of Financial Services (DFS) Superintendent Maria T. Vullo announced that all insurance companies licensed to conduct business in New York state must submit updated disaster response and recovery plans and responses to online questionnaires to DFS by June 16, 2017.
Property & casualty companies are also being directed to file responses to the Pre-Disaster Data Survey by April 28, 2017.
The information is critical to whether the state requests a federal disaster declaration, Vullo explained in a statement. When a disaster strikes any part of the state, DFS provides the governor and the New York State Office of Emergency Management with critical information regarding the amount and extent of losses, damages, personal injuries and deaths resulting from the disaster. Based on the information from DFS, the governor then determines whether and when to request a federal disaster declaration and how to prioritize the deployment of state disaster relief resources.
"It is important for all insurers, whatever the scale of their business, to understand that their ability to recover from a disaster ultimately impacts the needs of New York consumers," said Vullo. "Disaster response and business continuity plans should reflect the nature, scale and complexity of each insurer's business and these plans need to be updated at least annually."
DFS issued two circular letters advising the insurers of their disaster related obligations under New York's Insurance Law. The first circular letter was directed to property & casualty insurers, including such lines of business as mortgage guaranty insurance, title insurance and captive insurance. The second circular letter was directed to life insurers, as well as such entities as health insurers, fraternal benefit societies and employee welfare funds.
Insurers must show business continuity plan
In addition to filing a disaster response and recovery plan, DFS says that an insurer must have a business continuity plan. According to the circular letters, an insurer's business continuity plan should, at a minimum:
- Define the roles and responsibilities of employees designated to perform disaster-related functions;
- Identify lines of management authority;
- Distribute and maintain copies of business continuity and disaster response plans. Copies of plans should be stored at secure off-site locations that allow access if a company's computer servers are disabled.
- Report results of a business impact analysis;
- Identify recovery time objectives for business processes and information technology;
- Create detailed procedures, resource requirements and logistics for relocation to alternate worksites; and
- Set forth detailed procedures, resource requirements and a data restoration plan for the recovery of information technology, such as networks and required connectivity, servers, computers, wireless devices, applications and data.
After a disaster, the DFS Superintendent will activate the department's Insurance Emergency Operations Center (IEOC) — depending on the nature and extent of the disaster and its impact. As Vullo explained in her prepared statement, the IEOC is staffed by insurance industry disaster liaisons and DFS representatives to coordinate disaster responses. When possible, the superintendent will consult with the insurance industry before activating the IEOC, she said.
Electronic templates for responses to the pre-disaster survey and disaster response plan and business continuity plan questionnaires, and instructions for their completion and submission, are available on the DFS website.
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