Insights

By Brian Burns, Director of Compliance and Risk Management at Wentworth Institute of Technology, Member of URMIA's Government & Regulatory Affairs Committee (GRAC).

On June 6-7, 2016, in Washington, DC, the Risk & Insurance Management Society (RIMS) held its annual Legislative Summit. Each year, RIMS asks its membership to join them in DC for two days to first learn about the lobbying process and then to put those lessons into practice and help RIMS lobby Congress for support of those issues identified as legislative priorities. In support of this mission, URMIA's GRAC sends a member to participate in this RIMS event and share the issues identified during the summit with the rest of the URMIA membership.

Event attendees spent Monday listening to Whitney Warrick, RIMS director of government relations, and Jim McIntyre, RIMS DC counsel, as they explained the lobbying process and outlined RIMS' 2016 legislative issues. Attendees also heard presentations from legislative staffers on the issues currently in front of Congress and from Medicare secondary payer experts on the implications of the Strengthening Medicare and Repaying Taxpayers Act of 2012 (SMART Act). Then the cadre of newly trained lobbyists spent Tuesday navigating Capitol Hill, meeting with Senate and House staffers seeking support for RIMS' positions. The risk managers split up in teams determined by states or regions and were assigned to Senators and Representatives in their home states.

RIMS' legislative priorities

RIMS has identified three legislative priorities for the current term and one for next year. This year’s priorities are:

• Two pieces of cyber security legislation: The Data Security Notification Act of 2015 (S. 177 and H.R. 1770) and the Data Security Act of 2015 (S. 961 and H.R. 2205)
• The ADA Education and Reform Act of 2015 (H.R. 3765.)
• The Captive Insurers Clarification Act (S. 1561.)

In supporting the identified cyber security legislation, RIMS has recognized that meeting the burden of satisfying 47 different state data breach notification laws in the current system is burdensome for risk managers. For example, there are a variety of definitions of what constitutes a breach, varying degrees of what events trigger notice, and specific time frames that must be met in each state. The legislation RIMS supports would create a national standard for breach notification that would simplify compliance. According to several of the staffers with whom we met, both parties are in agreement that a uniform standard is required. However, there is a difference of opinion on how that is best accomplished. Preemption of an individual state's rights to implement a higher standard is one of the major sticking points on this issue.

The ADA Education Reform Act is a bill that attempts to address the rash of drive-by lawsuits being brought under the Americans with Disabilities Act (ADA). Astute plaintiff's counsel will target lawsuits toward the gray areas of ADA compliance, where room for interpretation of the law is broad. Whenever a suit is brought, property owners are faced with expensive litigation and often a settlement that lines the pockets of plaintiff's attorneys without much regard for the actual fix of the alleged ADA violation. The bill RIMS is supporting requires plaintiffs to send demand letters to provide specific information detailing the circumstances of denied access and further provides for a notice and cure period before a suit could be brought. The bill also creates a mediation program to help parties resolve claims of barriers, without the expense of litigation. While the bill focuses on compliance, some offices showed resistance to opening up the ADA without the support from a disabilities advocacy group signed on to the effort. Other offices recognized the problem and were hopeful that something could be done.

In 2010, the Non-admitted and Reinsurance Reform Act (NRRA) failed to exclude captives from the definition of "non-admitted insurer." This fact, believed to be an oversight, has created some confusion as to whether independent procurement taxes on the insurance purchased from captives should be paid to the state where the risk resides, as well as to the state where the captive is domiciled. The RIMS supported bill, the Captive Insurers Clarification Act, would define a captive insurer and would specifically exclude captives from the meaning of a non-admitted insurer under the NRRA. There was some optimism that this bill could be passed in this session.

Finally, the issue that RIMS has identified as a top priority in the next session of Congress is the reauthorization of the National Flood Insurance Program (NFIP). The current authorization expires in September 2017. As of 2015, the NFIP owed the US Treasury $23 billion, so supporting reauthorization is not without fiscal concern for members of Congress. However, RIMS is supporting the exploration of ways to move toward fiscal health. RIMS has offered several options to help alleviate the financial burden the program presents. Among other things, these options include: moving toward risk based premiums, updating FEMA maps, increasing the number of participants in the program, clarifying what constitutes an equivalent private flood insurance policy, encouraging competition among private insurers to provide consumers with enhanced policy options, and establishing a safe harbor for consumers when an insurer certifies that a flood insurance policy meets federal requirements. Staffers were universally aware of the approaching deadline, and all expressed an eagerness to avoid the delays experienced in TRIA's renewal last year.

The official RIMS position papers on these four issues can be found here.

Overall, the RIMS Legislative Summit is an incredible way to see how the legislative process works. As lobbyists, attendees are thrust into the political machine and asked to generate support for issues important to all risk managers. During the trip to The Hill, the underbelly of the beast is revealed, and the nuanced political motivations of Senators and Representatives are on display. This experience provides the participant with a greater understanding of all the factors that go into the making of federal laws. Regardless of your political affiliation, this is a truly fascinating, educational experience.