New York Mandates Continuing Education for Insurers in Flood Insurance, Diversity

The New York State Department of Financial Services (DFS) is mandating continuing education in flood insurance for property/casualty insurance producers in response to the increasing risk of flooding due to climate change. In addition, DFS is the first state regulator to require education in diversity, inclusion and the elimination of bias for its insurance producer and public adjuster licensees.

The regulation takes effect November 12, 2021, and applies to licenses renewed on or after April 1, 2022.

Requiring insurance producers and public adjustors to take continuing education in these areas will enhance their competency and help them better serve all New Yorkers, DFS Acting Superintendent Adrienne Harris said in a department press release.

“Requiring education on flood insurance and diversity and inclusion is not only timely, it is in the best interest of consumers,” Harris said. “These additional education modules will help producers improve flood insurance availability for consumers and hold producers and adjusters accountable in implementing diversity and inclusion initiatives to be aware of potential bias and racial justice when servicing diverse consumers.”

In addition to mandating flood insurance education for all property/casualty insurance producers, DFS is requiring enhanced flood insurance education for property/casualty insurance producers who sell flood insurance through the National Flood Insurance Program (NFIP). This enhanced requirement will ensure that consumers receive accurate NFIP quotes and are not inadvertently underinsured for flood damage.

Furthermore, this requirement will educate producers on flood insurance coverage for dwellings in urban environments and clarify the role of adjusters to promptly resolve claims for consumers.

These continuing education requirements are part of DFS’ efforts to holistically address the effects of climate change on New York communities and the financial services industry. DFS is the first U.S. financial regulator to create a comprehensive climate program that focuses on protecting consumers, managing the financial risks from climate change and spurring green growth.

DFS has established a set of expectations that banks and insurers integrate the consideration of the financial risks from climate change into their governance frameworks, risk management processes and business strategies, and develop their approach to climate-related financial disclosure.

DFS’ continuing education requirement in diversity, inclusion and the elimination of bias for producers and adjusters builds on the department’s action to promote diversity, equity and inclusion in the insurance industry. This requirement will help producers and adjusters to better service a diverse population of consumers and be culturally sensitive and aware when interacting with consumers and members of the public, DFS said in its release.

In March 2021, DFS issued a circular letter to all New York-regulated insurers outlining its expectation that insurers make the diversity of their boards and senior management a business priority and key element of their corporate governance. DFS is also collecting data relating to the gender, racial and ethnic composition of the boards and senior management of certain of its regulated entities and intends to publish the data on an aggregate basis.

Source: New York State Department of Financial Services