107F
AMERICAN BAR ASSOCIATION
ADOPTED BY THE HOUSE OF DELEGATES
FEBRUARY 16, 2009
RECOMMENDATION
RESOLVED, That the American Bar Association urges the federal government to use the
multiple tools available to it to mitigate losses from future mega-catastrophes including:
A.
Establish risk appropriate federal standards for specific catastrophes in the
regions of the country exposed to the risk requiring strong, damageresistant building codes for new construction that reflects best practices for
reducing catastrophe loss exposure and vigorous enforcement of these
codes,
B.
Require cost-effective retrofitting measures when residences are modified
substantially and otherwise provide incentives to homeowners to invest in
mitigation retrofitting, including when substandard construction
techniques are discovered after the fact, or better practices are available,
and
C.
Adopt land use policies that discourage or prevent construction in areas
that are difficult to evacuate or that pose unusually high risk to personal
safety (to consumers and first responders) or property loss, and require
FEMA to incorporate the adoption and effective enforcement of statewide
building codes in its Hazard Mitigation Grant Program. In addition,
FEMA and the Congress should implement a preference in making predisaster grants to proposals by states and localities seeking support for the
training of state and local building code inspectors to improve
enforcement.
FURTHER RESOLVED, That the American Bar Association urges Congress to
authorize and appropriate additional funds for disaster prevention and preparedness
activities, including additional funds (on a matching basis) to states and localities in areas
of high catastrophic risk, to support adoption and enforcement of modern building codes,
and for mitigation grants, incentives, and needs tested direct insurance subsidies.
107F
REPORT
As a result of Hurricanes Katrina and Rita, there had been widespread criticism of
the insurance system as it relates to the kinds of disasters precipitated by hurricanes and
storms. In response, in the spring of 2007, Peter Neeson, Chair of the ABA Tort Trial &
Insurance Practice Section (TIPS), appointed the Task Force on Disaster Insurance
Coverage. The Task Force was reappointed the following year by the next Chair of TIPS,
Peter Bennett.
Task Force Mission
The specific mission of the Task Force was "to examine insurance coverage
difficulties arising from the hurricanes, including (1) why so much litigation has surfaced
in surrounding states over the wind/water issue, and (2) why insurers are departing from
hurricane-prone areas in Florida and along the entire east coast. The scope of the Task
Force's research has included the full range of issues arising out of insurance coverage,
availability, and affordability for hurricanes and storms and the executive, administrative,
legislative, and judicial framework for addressing such issues.
The Task Force extends its gratitude to its ex officio members representing
various stakeholders for their outstanding contributions to the difficult work of the Task
Force. However, it is important to stress that the positions expressed in this Report and
Recommendations, while resulting in an overall general consensus, does not necessarily
represent the opinions of the entire ex officio membership or their respective policies.
Meetings, Hearings, and Deliberations of the Task Force
The Task Force met on May 18, 2007 in Newport Beach, CA; August 12, 2007 in
San Francisco, CA; October 6, 2007 in Palm Beach, FL; February 9 2008 in Los Angeles.
CA; April 15, 2008 in Washington, D.C.; August 9, 2008 in New York City, N.Y.;
September 22, 2008 in Chicago, IL; and October 4, 2008 in Hilton Head, SC. It heard
presentations from a wide variety of officials from the insurance industry, state and
federal governments, and consumer and other non-governmental organizations.
Concerns with the Present Insurance System
Following Hurricanes Katrina and Rita some national insurers moved to terminate
existing policies, or to cease writing new policies entirely, in coastal areas ranging from
Florida to New England. A few states moved to establish state mechanisms for the
hurricane insurance business, while others looked to Washington for a solution. Various
hearings and investigations were initiated by Congressional and state legislators, state
insurance regulators, and certain attorneys general, and the Task Force has reviewed the
testimony and proposals that have resulted from this process.
107F
From the presentations and effort conducted by the Task Force, it was noted that,
among other things, some raised “concerns” about adequacy of coverage provided under
insurance policies and the National Flood Insurance Program (NFIP) in regard to wind
and water damage, the varying interpretations of "anticoncurrent cause" provisions in
insurance policies and questions of enforcement, promptness and/or consistency
surrounding claims determinations during times of catastrophe.
The Task Force while having considered the referenced “concerns” recognized
that it was not a fact-finding body and did not express any view on the accuracy or
validity of such matters revealed or discussed in the course of its efforts. In furtherance
of its mission, the Task Force proposals intend to address both possible causes and
solutions to challenges inherent in the present insurance system, including the NFIP, and
those arising from mega catastrophes in seven separate but highly integrated
Recommendations.
Recommendation “107F”
This Recommendation “107F” focuses on what the federal government can do to
mitigate losses from mega-catastrophes and thus facilitate the provision of affordable
insurance with the increased coverages recommended to reduce post-catastrophe
litigation. Although cities and states exercise the primary regulatory control over building
codes and land-use, the federal government plays a role in certain situations. Likewise
federal policy concerning such matters as the functioning of FEMA and appropriations of
funds to cities and states can have a significant impact on risk mitigation.
This Recommendation calls for risk-appropriate federal standards requiring
strong, damage-resistant building codes for new construction that reflects best practices
for reducing catastrophe loss exposure and for vigorous enforcement of these codes. The
codes should address the risk of catastrophes in the various regions of the country as
appropriate, so that Minnesota is not burdened with hurricane related code provisions
while California may have code provision related to fire, earthquake and hurricanes. Such
standards should also require cost-effective retrofitting measures when residences are
modified substantially and provide incentives to encourage homeowners to invest in
mitigation retrofitting.. An example would be when substandard construction techniques
are discovered after the fact, or when better practices are now available.
This Recommendation also calls for land-use policies that discourage or prevent
construction in areas that are difficult to evacuate or that pose unusually high risk to
personal safety or property loss. FEMA can play an important part in this objective by
effective enforcement of statewide building codes in its Hazard Mitigation Grant
Program. In addition, FEMA and Congress should implement a preference in making
pre-disaster grants to proposals by states and localities seeking support for the training of
their building code inspectors to improve enforcement.
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107F
Congressional appropriations can also play an important part. This
Recommendation urges Congress to authorize additional funds for disaster prevention
and preparedness activities, including additional funds on a matching basis to states and
localities in areas of high catastrophic risk to support enforcement of building codes, and
for mitigation grantsincentives, and needs tested direct insurance subsidies.
Respectfully submitted,
Timothy Bouch, Chair
Tort Trial and Insurance Practice Section
February 2009
107F
GENERAL INFORMATION FORM
Submitting Entity: Tort Trial and Insurance Practice Section
Submitted By: Timothy W. Bouch, Chair
1.
Summary of Recommendation(s).
As one of seven integrated and highly interdependent set of Recommendations to reduce the
nature and extent of post hurricane (catastrophe) litigation, this Recommendation focuses
on federal acts to mitigate losses from mega-catastrophes by influencing building codes
and land-use in certain situations. In view of the investment of federal funds required
following a catastrophe, the federal government is urged to call for risk-appropriate
federal standards requiring strong, damage-resistant building codes for new construction
that reflects best practices for reducing catastrophe loss exposure and for vigorous
enforcement of these codes. Land-use policies that discourage or prevent construction in
areas that are difficult to evacuate or that pose unusually high risk to personal safety or
property loss are recommended. FEMA is urged to encourage effective enforcement of
statewide building codes in its Hazard Mitigation Grant Program.
2.
Approval by Submitting Entity.
Approved by the Council of the Tort Trial and Insurance Practice Section on October 5,
2008
3.
Has this or a similar recommendation been submitted to the House or Board previously?
No.
4.
What existing Association policies are relevant to this recommendation and how would
they be affected by its adoption? Not applicable
5.
What urgency exists which requires action at this meeting of the House?
Reducing the burden of class-action lawsuits on state and federal courts following
hurricanes and other storms is projected to be a complex 10 year project involving
multiple levels of governments, regulatory agencies, private insurers and related entities.
The next hurricane season begins June 1. (See Status of Legislation)
6.
Status of Legislation. (If applicable.) Not applicable. [Although there were hundreds of
bills referencing “flood” and “hurricane” in the 110th Congress, including the main set of
bills (HR 920, HR 1682, HR 3121 and S 2284), the House passed HR 3121 “Flood
Insurance Reform & Modernization Act of 2007” was amended by the Senate by
substituting S 2284 and was languishing in Conference when Congress adjourned. New
legislation is expected to be filed after the 111th Congress convenes.]
7.
Cost to the Association. (Both direct and indirect costs.) Not applicable
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107F
8.
Disclosure of Interest. (If applicable.) Not applicable
9.
Referrals.
This Report and Recommendation is referred to the Chairs and Staff Directors of all ABA
Sections and Divisions.
10.
Contact Persons. (Prior to the meeting.)
a) Hervey P. Levin
Law Offices of Hervey P. Levin
6918 Blue Mesa Drive
Dallas, Texas 75252
972-733-3242-O 972-896-4312-Cell
hervey@airmail.net
b) James F. Carr
1525 Sherman St. Fl 5
Denver, Colorado 80203-1714
303-866-5283-O 303-513-0026-Cell
c) Janice Mulligan
Mulligan & Banham
2442 4th Avenue, Suite 100
San Diego, CA 92101-1609
619/238-8700/cell phone 619-977-4444
jfmulligan@yahoo.com
11.
Contact Person. (Who will present the report to the House.)
Hervey P. Levin
Law Offices of Hervey P. Levin
6918 Blue Mesa Drive
Dallas, Texas 75252
972-733-3242-O 972-896-4312-Cell
hervey@airmail.net
107F
EXECUTIVE SUMMARY
1.
Summary of the Recommendation
This Recommendation focuses on federal acts to mitigate losses from mega-catastrophes by
influencing building codes and land-use in certain situations.
2.
Summary of the Issue that the Resolution Addresses
As a result of Hurricanes Katrina and Rita, there had been widespread criticism of the insurance
system as it relates to the kinds of disasters precipitated by hurricanes and storms. In response,
TIPS established the Task Force on Disaster Insurance Coverage.
The specific mission of the Task Force was "to examine insurance coverage difficulties arising
from hurricanes, including (1) why so much litigation has surfaced over the wind/water issue, and
(2) why insurers are departing from hurricane-prone areas in Florida and along the entire east
coast.' The scope of the investigation included the full range of issues arising out of insurance
coverage, availability, and affordability for hurricanes and storms and the executive,
administrative, legislative, and judicial framework for addressing such issues.
The seven Recommendations are an integrated and highly interdependent set of proposals
that begin with a major goal of reducing the nature and extent of post hurricane
(catastrophe) litigation. This is accomplished first by suggesting that the coverage of the
basic homeowners policy be changed to include damages caused by wind driven storm
surge and then lessening the nature and extent of the risk of losses as much as possible
over a 10 year period to increase access to “available” and “affordable” insurance.
Resolution of ambiguity regarding causation is also shifted to the insurers and the
National Flood Insurance Program; two parties better able to resolve the boundaries of
their respective coverages, in ways that do not burden state and federal courts with
excessive litigation.
3.
Please Explain How the Proposed Policy Position will Address the Issue
In view of the investment of federal funds required following a catastrophe, the federal
government is urged to call for risk-appropriate federal standards requiring strong,
damage-resistant building codes for new construction that reflects best practices
for reducing catastrophe loss exposure and for vigorous enforcement of these
codes. Land-use policies that discourage or prevent construction in areas that are
difficult to evacuate or that pose unusually high risk to personal safety or property
loss are recommended. FEMA is urged to encourage effective enforcement of
statewide building codes in its Hazard Mitigation Grant Program.
Finally, Congress is urged to authorize additional funds for disaster prevention and
preparedness activities, including additional funds on a matching basis to states
and localities in areas of high catastrophe risk to support enforcement of building
codes, and for mitigation grants, tax credits, and needs tested direct insurance
subsidies.
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107F
4.
Summary of Minority Views or opposition which have been identified:
TIPS extends its gratitude to the ex officio members of the Task Force representing
various stakeholders for their outstanding contributions to the difficult work of the Task
Force. However, it is important to stress that the positions expressed in this Report and
Recommendations, while resulting in an overall general consensus, does not necessarily
represent the opinions of the entire ex officio membership or their respective policies.