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FACI Discusses Cybersecurity, Ride-Sharing and Other Issues

The Federal Advisory Committee on Insurance met February 10 at the Treasury Department, with committee members discussing a variety of issues...
March 11, 2015

The Federal Advisory Committee on Insurance (FACI) met February 10 at the Treasury Department, with committee members discussing a variety of issues. PIA National was represented by Director of Regulatory Affairs Jennifer Webb. Issues discussed included:

Affordability of flood insurance: The committee discussed forthcoming studies from the Federal Emergency Management Agency (FEMA) and the National Academy of Sciences (NAS) focusing on how the National Flood Insurance Program (NFIP) should be structured to ensure affordability, but move toward an actuarial sound rating system. The reports are expected in March and September 2015. The first report will be general in nature and the second will be more specific, using North Carolina as a case study.

Retirement security: The committee expressed concerns about low participation rates by the private sector in retirement plans and discussed ways insurance, focusing on annuities, can help people improve their retirement security.

Cybersecurity and cyber insurance: Deputy Treasury Secretary Sarah Raskin spoke about cybersecurity. She said that the overall cyber risk insurance market is growing driven by large firms. At the same time, Raskin expressed concern that smaller companies have not followed suit. "Cyber insurance take-up rates at smaller companies have not grown." She asked the committee look into five issues and advise the Federal Insurance Office (FIO) on how to facilitate a more robust cyber insurance marketplace.

Ride-sharing: Gus Fuldner of Uber gave a presentation on the types of insurance Uber has to protect its drivers and passengers. Uber is an app-based service that matches private drivers with private passengers. Fuldner stated that Uber provides primary coverage while the passenger is in the vehicle and secondary coverage while the driver is on the app, but has not accepted a passenger. Fuldner said that the availability of personal coverage during the "on app" period will depend on the particulars of that driver's policy.