The National Association of Mutual Insurance Companies is urging the Federal Energy Regulatory Commission to focus on mitigation and preventive measures as it examines threats to the reliability of the nation’s electrical system and to include representatives from the insurance industry as well as state insurance regulators in future discussions.
“The insurance industry anticipates a long-term upward trend in weather-related threats; both frequency and severity of extreme weather events are predicted to continue to rise,” said Jon Bergner, vice president of public policy and federal affairs for NAMIC, in a letter to the FERC.
The electrical system and other critical services will continue to face challenges, he added, both natural and from man-made threats such as cyberattacks or terrorism. “The insurance industry believes that adaptation focused on preventive and mitigative actions is crucial to minimize the human and financial toll from both extreme weather events and other natural and human-made threats,” Bergner said. “An increasingly proactive risk management approach to the nation’s electrical infrastructure is in all parties’ best interests. Enhancing resiliency and reliability would help ensure the viability of insurance markets as well as the availability and affordability of insurance coverage – a critical social good – for the public.”
Noting recent examples such as the power crisis from freezing temperatures in Texas and the wildfires that have severely disrupted California’s power system in recent years, Bergner said that such disasters not only harm the energy marketplace, but can also impact the availability and affordability of insurance coverage. With that in mind, NAMIC urged the FERC to engage with state insurance regulators to advocate on behalf of the public for increased investment in resiliency efforts for the nation’s electrical infrastructure.
“A partnership between the commission, insurance commissioners, and the insurance industry could enable greater understanding of policy decisions affecting resiliency,” Bergner said. “Ultimately, we see this as an opportunity to optimize outcomes in both the power and insurance sectors on behalf of customers. The challenges that growing natural and human-made threats pose to electrical reliability will require holistic solutions and new levels of engagement. The insurance industry seeks to be an active participant in that dialogue.”
Article Posted: 04.16.21
Last Updated: 07.21.21