New York Asks Life Insurers for Disaster Plan Updates

The New York State Department of Financial Services has sent life insurers, retirement systems, health insurers and other life and health coverage providers a request for their new disaster response plans.

Carriers are supposed to send in their updated disaster response plans and business continuity plans by Oct. 7.

The new instructions, given in Insurance Circular Letter Number 11 (2022), are similar to the instructions given in 2021.

The department notes, for example, that it might need 7-day-per-week access to an insurer’s disaster liaison after an especially big disaster, and that, in some cases, the department might ask a big insurer’s disaster liaison to come to emergency response office in Albany, New York City or other, alternative location, and, possibly, to work in the emergency response office seven days per week.

The instructions come with a link to questionnaires that could help agents and advisors anywhere in the world understand how big financial services companies try to plan for disasters, and what they can do to try to harden their own practices against floods, fires, hurricanes, earthquakes and other types of disasters.

What It Means

Part of helping clients manage financial risk depends on your practice managing disaster risk.

Before the Sept. 11, 2001, terrorist attacks on the New York City World Trade Center, the need for detailed disaster prep plans might have seemed somewhat far-fetched.

Since that date, New York has experienced severe flooding due to Superstorm Sandy, which hit in 2012, and the COVID-19 pandemic.

Questions

The New York state life questionnaire and business continuity plan questionnaire ask carriers to think deeply about many disaster prep issues.

Some have to do with how the carriers might communicate with you.

In the life questionnaire, for example, the department asks, “Does your plan describe the steps the company will take to notify insurance producers and independent adjusters, in a timely manner, of any procedural changes made in response to a disaster?”

Here are five questions for agents and advisors, adapted from the questions the New York department is asking the carriers in the questionnaires.

1. If you have more than a handful of team members, who would do what after a disaster?

2. What would you do if your telephones, data processing systems, network services and ability to work remotely go down?

3. Have you made a list of critical computer programs, operating systems and data files, and what are you doing to back up those programs, systems and files?

4. In an emergency, could you move your operations to a backup site?

5. What kinds of arrangements does the backup site have for emergency power and emergency communications?

A view of the World Trade Center site on Sept. 19, 2001, from the law offices of Kelner & Kelner. (Photo: Rick Kopstein/ALM)