The New York Department of Financial Services (DFS) has issued updated disaster response and recovery plan requirements for all insurance companies, including captives, licensed to conduct business in the state.
The updated requirements were communicated to insurers via two updated circular letters, the first of which was aimed a property and casualty, title, and captive insurers.
The circular letter warned captives, amongst other insurers, that they “must be prepared to respond at every level” if a disaster occurs.
When a disaster occurs in New York, the DFS provides vital information to the Governor and the state office of emergency management regarding the extent of losses, damages, personal injuries and deaths caused.
This information assists the Governor in determining whether and when to request a federal disaster declaration and how to prioritise the deployment of the state’s assets.
Following a disaster, the DFS superintendent will activate the department’s Insurance Emergency Operations Centre, which is staffed by insurance industry disaster liaisons and department representatives to coordinate disaster responses.
According to the updated requirements, all insurers must submit updated disaster response and recovery plans and responses to online questionnaires by 29 June 2018.
In addition, insurers must have a business continuity plan and regularly perform a business impact analysis in order to predict the consequences of the disruption of business.
The analysis should identify the operational and financial impacts resultinging from the disruption of business functions and processes.
Financial services superintendent Maria Vullo explained: “When disaster strikes it is important for all insurers to be able to respond quickly and to be able to continue operations to ensure they can serve the increased needs of consumers resulting from the emergency, whether it’s a storm, a data breach or a terrorist attack.”
“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.”
