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These new regulations also represent a concerted effort to significantly curb the common problem of underinsurance that many homeowners face.
The new regulations include provisions for laying out requirements applicable to replacement value and replacement cost estimates to create a more consistent, comprehensive and accurate replacement cost calculation; setting forth training standards for agents and brokers who sell homeowner's insurance; creating standards for real estate appraisers who estimate replacement cost for insurance purposes; requiring the application of certain standards when estimating replacement and construction costs; and establishing record keeping requirements.
"These regulations will go a long way toward ensuring that consumers who are victims of a disaster, such as a wildfire, are able to get the financial relief to rebuild their homes and their lives, while also dong much to ensure that homeowners are not underinsured," said Jones. "It's devastating enough to lose your house to a disaster, but not to receive adequate funds to replace it just adds insult to injury."
"We applaud the Department for taking action to stop the industry from underinsuring consumers when their home is damaged or destroyed in a natural disaster," said Bach. "After every wildfire in California, two-thirds of the people who lose a home face a second nightmare when they find out they don't have enough insurance to cover the loss."
Commissioner Jones also responded to a lawsuit recently filed by the industry that seeks to block the consumer-friendly regulations.
The suit was filed by the Personal Insurance Federation of California whose members are Farmers Insurance, Liberty Mutual Group, Progressive Insurance Company, State Farm Insurance Companies, Allstate Insurance, Mercury Insurance, and other insurers and by the Association of California Insurance Companies.
According to the complaint, the regulation restricts insurer "underwriting" and the Department of Insurance doesn't have that authority.
"Insurers have clearly missed the mark with this lawsuit and their argument simply has no merit," said Commissioner Jones. "The replacement cost regulation has nothing to do with underwriting. The industry is free to decide which customers to sell to and at what price, as long as they comply with the voter-approved initiative Proposition 103, make rate filings with the Department, and get them approved. This is just another attempt, in a long line of many, by the insurance industry to strip consumers of the protections they deserve."
He pointed out that, instead, the regulation addresses how insurance companies communicate with their customers when they're making a sale, ensuring that they give them complete and accurate information and not mislead them.
The suit also contends that the Department can't require companies to offer a complete replacement cost estimate, saying they are free to describe replacement cost in whatever way they choose.
According to Commissioner Jones and complaints filed with the Department, when policies are sold to customers there's been confusion about what a "replacement cost" estimate actually covers, and this regulation clears up that confusion. Insurance companies are not required to provide an estimate, but if they do, it must be complete and include certain components.
"It's appalling that insurance companies want to block these important consumer-friendly measures, which protect people when they are at their most vulnerable," Commissioner Jones explained. "Consumers are entitled to know at the outset what their replacement cost is so they can make informed decisions about their coverage. We will defend these regulations to ensure that members of the public receive full and fair disclosure from insurers about the products they are buying."
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WASHINGTON, DC – In keeping with President Obama's strategy to expand domestic oil and gas production safely and responsibly, the U.S. Department of the Interior (DOI), the U.S. Department of Agriculture (USDA), and the U.S. Environmental Protection Agency (EPA) on Friday released an interagency approach to address air quality issues associated with onshore oil and gas development on public lands.
A new memorandum of understanding (MOU) establishes a common process for the agencies to follow in analyzing the potential air quality impacts of proposed oil and gas activities on federally managed public lands.
The collaborative approach established in the MOU will increase efficiency, certainty and transparency in the process – benefiting industry, federal agencies, state, and tribes.
“This agreement is an important step forward for our nation's energy security,” said Deputy Secretary of the Interior David J. Hayes. “This agreement helps institutionalize the type of collaborative effort that created a path forward for the Greater Natural Buttes gas project in Utah and that encouraged the use of best practices and sensible air pollution control technologies. We want to build on lessons learned to establish clearer lines of communication and a predictable, common sense process for ensuring prompt and thorough reviews of proposed oil and gas projects.”
Previously, federal agencies responsible for land management and air quality reviews associated with oil and gas development made decisions based on individual agency protocols.
Agencies used different approaches when determining the adequacy of air quality analyses and mitigation; the stage in oil and gas activities – planning, leasing, or permitting – when air quality analyses should occur; and the appropriate thresholds and resource conditions to use as the starting point for analyzing impacts to visibility and other air quality related values (AQRVs). These differences often resulted in project delays.
To alleviate these delays and improve interagency coordination, the Bureau of Land Management (BLM), EPA, the U.S. Fish and Wildlife Service, the National Park Service, and the USDA Forest Service worked to establish mutually acceptable procedures for conducting air quality analyses as part of the environmental review required by the National Environmental Policy Act (NEPA).
NEPA requires all federal agencies to evaluate and disclose the potential environmental impacts of their proposed actions in a public process.
“This agreement ensures we do not have to sacrifice clean air in our communities nor our protected public landscapes when oil and gas development occurs,” said Agriculture Deputy Secretary Kathleen Merrigan. “This is a good example of what the President called for in his State of the Union address to find creative and innovative ways for government to work better together.”
“Today's agreement will align federal agencies so that oil and natural gas development in the United States is achieved in a way that also protects important environmental resources,” said EPA Deputy Administrator Bob Perciasepe. “Working with our federal partners, we are committed to delivering an environmental review process that is both transparent and comprehensive, supporting responsible domestic energy production on federal lands while ensuring environmental protection.”
Friday's agreement builds upon the best practices applied in a recent successful interagency collaboration on a major natural gas development project in Utah.
The Greater Natural Buttes Area Gas Development Project had been delayed, in part, over concerns about its potential impacts on air quality in the Uintah Basin, which has seen some of the highest winter time ozone levels in the nation.
Over the last several months, the BLM and EPA worked closely with the project proponent to develop a mitigation plan to significantly reduce the project's potential impacts, an important step forward for a project that could include up to 3,675 new gas wells over 10 years and produce more than 6 trillion cubic feet of natural gas.
The MOU outlines a number of steps the agencies will take to ensure that federal laws protecting air quality, human health, and the environment are balanced with the nation's energy needs.
The agreement provides for early interagency consultation throughout the NEPA process; common procedures for determining what type of air quality analyses are appropriate and when air modeling is necessary; specific provisions for analyzing and discussing impacts to air quality and for mitigating such impacts; and a dispute resolution process to facilitate timely resolution of differences among agencies.
For more information on the MOU: www.doi.gov/news/pressreleases/loader.cfm?csModule=security/getfile&pageid=251155.
To view the MOU: http://www.doi.gov/news/pressreleases/loader.cfm?csModule=security/getfile&pageid=251152.
For more information about NEPA: http://epa.gov/compliance/nepa/index.html.
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