November 2005
Designee J. Dietrich Stroeh Departs CEA Board CEA Governing Board designee J. Dietrich Stroeh left his position with the Board on October 17. Dietrich, CEA's longest-serving designee, has been an active and engaged participant in Board policy discussions and decisions since his selection by the Senate Rules Committee in February 1998. His background as a civil engineer and his command of infrastructure issues has proven invaluable to the development, implementation and on-going support of the CEA mitigation programs. CEA Welcomes New Board Designee Angelo Quaranta Angelo Quaranta, a long-time Bay Area insurance executive, has been appointed as the new designee to the CEA Governing Board by the Senate Rules Committee. He began his insurance industry career in 1965 and currently serves as Master General Agent with American General Life of Houston, Texas. He has worked with many of the insurance industry's leading companies and has received the industry's National Quality Award for both health and life insurance. His long and active history of service to the industry and the community includes board positions with the Juvenile Diabetes Association of San Francisco, the California New Motor Vehicle Board and the California Contractors State Licensing Board. Advisory Panel Focuses on Financial Scenarios The Advisory Panel to the CEA Governing Board met October 27, adjusting its standard bi-monthly meeting schedule to accommodate the Board's need to focus in November and December on key year-end tasks. The meeting featured a presentation on the CEA's Dynamic Financial Analysis (DFA) model for determining financial scenarios to meet the CEA's objectives. The Panel was also briefed on recent discussions between the CEA and insurance industry representatives concerning the 2008 statutory sunset of the First Industry Assessment Layer. Disaster Awareness Results in Increased Interest in Earthquake Insurance In a summer that included the massive impacts of Hurricane Katrina halfway across the country, the CEA's Consumer Services staff has responded to a record number of calls, answering 2,884 inquiries from policyholders, agents, and others in the June-September period totaling over 700 calls per month. By comparison, during first-quarter 2005 the CEA received about 100 calls a month. The surge in call volume is due to a number of factors: the CEA postcard campaign in May, the recent CEA-sponsored media spots, publicity about the CEA's filing for a rate decrease, and consumer reaction to this season's hurricane and fire disasters. Preparedness and disaster awareness seem to be top-of-mind for consumers, who called seeking guidance on protecting their families and finances after a disaster. Some of the frequently asked questions were: Will the CEA have enough money to pay claims after a catastrophe? How soon would I get my money? Will the federal government help? When will rates go down? Disaster-conscious Californians are reacting in record numbers following Hurricanes Katrina and Rita. This week saw a trend continuing as the CEA earthquake dwelling policy count again rose significantly. This week's total of 740,473 is the highest since April 2003. And while it's clear that disasters in the Southeast raise disaster consciousness, so do the CEA's ongoing marketing and media campaigns that combine earthquake information with effective preparedness messages. Hurricanes Bring Media Focus on Disaster Preparedness CEA is working with California media outlets to publicize the 2006 remembrance of The Great San Francisco Earthquake of 1906. San Francisco Bay Area media are especially focused on the centennial. On September 18, the San Francisco Chronicle published a series on earthquake preparedness. The series began with a featured front-page story, which noted that although the Bay Area is a model for earthquake preparedness, huge gaps remain in building retrofitting and response planning. The CEA-sponsored Putting Down Roots in Earthquake Country, San Francisco Bay Area Edition education and mitigation booklet was delivered to more than 500,000 Chronicle families as an insert in the same edition. The CEA marketing staff has met with KCBS Radio and other Bay Area media to offer assistance in putting out the word on preparedness. Many Bay Area media outlets are scheduling special programming and promotions to commemorate the 1906 earthquake centennial. This gives CEA an excellent opportunity to make the most of consumer awareness to deliver important earthquake-safety, preparedness, and insurance messages. As part of the '06 Alliance the CEA is helping the Oakland Museum of California with an interactive multimedia display that puts viewers in a simulated earthquake experience. Bay Area Edition of Preparedness Handbook Is a Hit CEA's partnerships with public and private-sector earthquake-preparedness groups continue to pay education dividends. For example, the CEA's contract with earthquake-mitigation product firm Trevco/Quakehold has helped lead to a remarkable increase in sales of mitigation items in the past few months. The early-September release of the U.S. Geological Survey (USGS) safety booklet Putting Down Roots in Earthquake Country, San Francisco Bay Area Edition, is proving both popular and timely. The publication offers a rebate postcard for Quakehold! products through Spring 2006. The popularity of Putting Down Roots has depleted the initial million-copy press run. A second printing was completed in October, in time for the anniversary of 1989's Loma Prieta earthquake. The CEA was a significant sponsor of that first edition, contributing editorial content and design, as well as significant funding of printing and distribution. The USGS is working to translate Putting Down Roots into several languages, including Spanish and Chinese. Consumer Services Team Takes CEA’s Message to Agents The new CEA event booth, featuring fresh photos, display boards, and product information, is a popular attraction at this fall's insurance-industry conferences for California agents and claims representatives. CEA Consumer Services staff was at both the Farmers Insurance Expo and the American Agents Alliance Annual Conference in southern California, where questions about the pending CEA rate filing and intensified interest in disaster preparedness kept the staff busy. Conference participation is a great opportunity to let agents know about the CEA and its products, provide them the CEA's new marketing literature, and give them copies of Putting Down Roots. As a result of this exposure, thousands of CEA brochures and information sheets are going to agents, each of whom will educate consumers on CEA products. The CEA has beautiful new brochures about earthquake insurance for homeowners and renters. They are available by calling the CEA toll-free at (877) 797-4300. The CEA will soon be updating its Web site to facilitate online brochure orders. Eighth Annual Claims Liaison Meeting Convenes in Sacramento Insurance-claims professionals from across the nation gathered in Sacramento October 13-14 for the CEA's Eighth Annual Claims Liaison Meeting. Some 41 high-level staff from CEA participating insurers heard presentations from the CEA, the Governor's Office of Emergency Services and the California Department of Insurance. The information-packed sessions covered topics ranging from earthquake-claims-adjuster accreditation to disaster response "lessons learned" from the San Simeon earthquake, Florida's 1994 hurricanes, and this year's Hurricane Katrina. A number of expert presenters were on hand to answer participants' many "what-if" questions and provide insights into how engineers view structural damage from earthquakes. The CEA's sophisticated computer-based Earthquake Loss Estimation System was demonstrated and proved to be of great interest to many company representatives. The annual claims liaison meeting is a particularly effective way to ensure that CEA participating insurers have the best and latest information and techniques that keep them ready to respond to CEA earthquake claims. According to the CEA, Every Day Is Earthquake Season in California, and the conference is one of many ways the CEA backs up its promise of prompt, fair, and consistent claim service. CEA’s Proposed Rate Filing in Regulatory Review The CEA Governing Board in August approved a staff-recommended rate application that would provide a 22.1 percent decrease in the CEA's average statewide earthquake insurance rates. The application is under review by the Department of Insurance. Following almost two years of CEA-sponsored actuarial study and research in earthquake science and engineering, CEA staff worked diligently for months to assemble a rate-filing package that provides actuarially sound rates based on the best available scientific information. If approved, this rate filing will mark the first CEA rate-change since l999. The filing incorporates new soil data from the California Geological Survey and is based partly on CEA reinsurance costs that have dropped to less than $100 million per year from the 1998 high of almost $300 million. The Board also directed CEA staff to send the Insurance Commissioner two new product enhancements for review, each in a separate rate application: Personal Property and Loss of Use Limits – If approved, this enhancement would "un-bundle" the existing Personal Property and Loss of Use increased-limits packages, allowing policyholders more flexibility in buying the popular increased-limits coverages. Additional Building Code Upgrade Coverage – If approved, this enhancement would offer consumers the option to buy an additional $10,000 of Building Code Upgrade coverage; coupled with base-limits provisions for code upgrade, policyholders would have a total of $20,000 of this important coverage. Record Numbers of Agents Sign up for Earthquake Insurance Training The CEA is setting records with its training for agents and claims representatives. In addition to the claims-liaison meeting reported on above, September and October saw CEA staff conduct training sessions on other issues of interest. Agents and claims reps are taking the CEA courses in record numbers; the CEA constantly strives to maintain an active training schedule and accessible online courses. This year to date, 525 agents have taken courses, and claims adjusters have nearly quadrupled their training numbers from last year with 1,660 completing courses. CEA Public and Government Affairs Director Moves On Stan Devereux has left his position as CEA's Public and Government Affairs Director to return to his career as an independent communications consultant. He will be missed for his professionalism and outstanding contributions to the CEA. Media inquiries now go to Consumer Services Director Nancy Kincaid, while legislative calls are handled by Public and Government Affairs Coordinator Steve Trumbly. 2005 CEA Board Panel Meeting Schedules CEA Governing Board Unless otherwise noted, all CEA Governing Board meetings are on Thursdays and begin at 1:00 p.m.  November 17  December 15
Legal Advisory - As a matter of its standard operating procedure and as part of its general compliance program, the CEA continually confirms that it complies with all applicable laws, regulations, and rulings, including those regarding insurance rating and pricing. The CEA's use of information obtained from third parties is in compliance with applicable privacy laws and regulations.