Your NY Connection magazine Third Quarter 2018 • Issue 23 WILDFIRES Taking a fresh look at Not Just a West Vendor Risk Coast Problem Management Déjà-Vu All Over Again State Senate Remains New York’s Political Battleground The Tax Cuts & Jobs Act Implications For Property & Casualty Insurers KNOW BETTER NEW YORK CONNECTIONS www.nyia.org • Third Quarter 2018 • 1 2 • Your NY Connection Magazine Contents FEATURES 10 10 Taking a Fresh Look at Vendor Risk Management 26 Wildfires 26 Not Just a West Coast Problem 32 The Tax Cuts & Jobs Act Implications For Property & Casualty Insurers 42 Déjà-Vu All Over Again State Senate Remains New York’s Political Battleground IN EVERY ISSUE 04 Chair’s Message 06 President’s Remarks 08 Alternate View 19 Q&A 32 22 Out & About 24 Giving Back 42 50 New & Noteworthy Déjà-Vu All 54 Upcoming Events Over Again: State Senate Remains New York’s Political Battleground www.nyia.org • Third Quarter 2018 • 3 NYIA OFFICERS & DIRECTORS Chair’s Message Elizabeth Heck, Chair President & CEO We have been talking about the need to attract new Greater New York Mutual Insurance Company talent to the industry for well over a decade. The conversation first started out of the very real need to Mark Prechtl, First Vice Chair Executive Vice President/CEO address the talent gap that would occur with the large Chautauqua Patrons Insurance Company number of impending retirements. Since then, the definition of ‘talent gap’ has expanded to include not Charles Makey, Second Vice Chair Senior Vice President, Insurance Operations only the lack of qualified people to backfill vacating Merchants Insurance Group roles, but the changing skill set required to keep our companies relevant. Rapidly improving technology provides new opportunities, but only if we have Norman Orlowski, Treasurer the right people in the right jobs. President/CEO Erie and Niagara Insurance Association The industry has done a better job attracting talent than initially predicted. This Steven Coffey, Immediate Past Chair is evident in the greater number of risk management degree programs available Vice President Broome Co-operative Insurance Company and the increasing number of ‘young professional’ groups within insurance networking organizations. We are bringing qualified, bright individuals into the Ellen Melchionni, President fold and they are staying because they recognize that insurance is a necessary President New York Insurance Association, Inc. service that is not only critical to the economy, but offers career opportunities, stability, and the ability to work with smart, energetic people. Stacey Orlando, Secretary Director of Design & Technology At GNY, I have spent a considerable amount of my time working on this very New York Insurance Association, Inc. topic. I am proud of the team we have built, but having a good internal team Matthew Benedict is only part of the equation. To truly thrive in this changing environment, we President & CEO must have qualified people across the entire spectrum of the industry. This Midstate Mutual Insurance Company means that there is opportunity for incoming professionals in any number of Mark Gardner ancillary businesses—including the DFS—which requires knowledgeable and New York Regional Counsel experienced individuals from the industry to serve as subject matter experts. Allstate Insurance Company Edward Harper We have witnessed firsthand the struggles DFS is facing with longtime staff President & CEO members retiring. The DFS has been upfront about their looking to hire Mid-Hudson Co-Operative Insurance Company individuals to help bridge their own talent gap. We have felt the impact of their Stephen Harris turnover in our inability to get filings and other matters approved timely. While President & CEO it’s frustrating, attracting talent is a challenge we share with our regulators. Sterling Insurance Company Craig MacCormac Seeing the challenges ahead, NYIA started the New York Insurance Scholarship Vice President, Business Development Foundation (NYISF). The foundation supports students who have a desire to Hartford Steam Boiler Inspection & Insurance Co. work in insurance and are enrolled in a bachelor’s or advanced degree program Patrick O’Malley in any major. We know the skills needed in insurance are diverse, and we want General Manager, Commercial Lines Division to appeal to an audience that has the breadth and depth to meet those needs. Progressive Kristofer Snader I have been part of the Selection Committee for a number of years and I am Senior Director, Government Relations increasingly impressed by the candidates who apply. If the applicants are any Nationwide Insurance indicator, I have great hope for the future of our industry. Jaynine Warner Legislative Affairs, North Atlantic Farmers Group, Inc. Elizabeth Heck NYIA Chair 4 • Your NY Connection Magazine Hoffman R Roth & M Matlin, LLP SMALL FIRM DOING BIG THINGS CLIENT FOCUSED With over 35 years of experience, we have the know-how to exceed your needs. We get the job done efficiently and effectively. QUALITY RESULTS METICULOUS REPRESENTATION DRIVEN PREPARATION HRM values quality over To obtain the best result for Preparation, preparation and more quantity. This is our #1 you, HRM must first know preparation is a simple, yet one of the most priority, so you will receive your needs, interests and effective mantras at HRM. We always seek to personalized attention expectations. We are mindful out prepare our adversaries. A well prepared from an HRM team of this and endeavor to provide knowledgeable attorney will always have member knowledgeable in through frequent and open a significant advantage over his/her less every facet of your case. communications with you. prepared knowledgeable counterpart. 505 8th Ave., Suite 1704 www.hrmnylaw.com 212.964.1890 [email protected] New York, NY 10018 NYIA STAFF President’s Remarks Ellen Melchionni, CAE President The New York State election cycle is in full swing. With [email protected] less than 10 weeks before Election Day, candidates for Cassandra Anderson, CAE Assembly, Senate and other offices are busy pounding Vice President the pavement. Television ads are looping, tweets are [email protected] chirping and requests for donations seem endless. Javier Tapia Director of Government Affairs While we are including an extensive article on the [email protected] hottest state races in the magazine (see page 42), I wanted to share my own Stacey Orlando perspective. I was having lunch with colleagues recently and was asked, “What Director of Design & Technology do you think the chances are that the state Senate flips from Republican [email protected] control to Democrat?” Folks at the table chimed in with their predictions and Susan Dawes opinions. I was having dinner with different colleagues that night and the Account Services Coordinator same conversation ensued. I know you must be thinking she sure does talk [email protected] politics a lot, but if you live in Albany, are involved in the political arena or are a lobbyist, this topic has been discussed ad nauseum since session adjourned. Kaitlyn Emory Administrative Assistant [email protected] I have observed that often the opinion shared is tainted with desire. If you ask any staff person, they will tell you with great enthusiasm why their party will be in control. If you ask a lobbyist who has a favorable history or connection with NYIA OFFICE one particular party, they will assure you that this party will be in the majority. 130 Washington Avenue Albany, New York 12210 I would argue that a truly good lobbyist has already made connections on 518.432.4227 both sides of the aisle. They’ve done their job educating any legislator with 518.432.4220 fax influence or potential influence on their issues. They may have spent less time [email protected] with those that currently have less influence, but they’ve identified themselves www.nyia.org as a resource—even for those that are not currently in the majority. So how have I answered the recurring question about the fate of the Senate? I have answered the same every single time. I say with complete confidence that it is a toss-up. I say adamantly that it is 50/50. This may sound like I don’t want to be on record with my prediction, but I think it is way too close to call. I believe anything can happen over the next few weeks that could sway the outcome. There could be another Presidential misstep that causes the anti- Visit Us Online Trump blue-wave to further swell in the Empire State. There could be another www.nyia.org Gubernatorial misspeak that slaps proud Americans who think the country is great. There could certainly be another indictment or unexpected retirement facebook.com/ for one of the Senators. The wind could blow in either direction this fall. newyorkinsurance association I would not put all my eggs in one basket. That is why NYIA has carefully and twitter.com/nyinsuranceassn purposely placed our delicate association eggs in as many baskets as possible. linkedin.com/company/new- york-insurance- Ellen D. Melchionni, CAE association NYIA President 6 • Your NY Connection Magazine Editor-in-Chief Know a student Cassandra Anderson Creative Director interested in a Stacey Orlando Contributing Writers career in insurance? Thomas Barber Nils F. Deacon Susan L. Dawes Kaitlyn Emory If so, be sure to encourage them to apply for Steven Greene Sue C. Quimby a scholarship with the New York Insurance John Romano Scholarship Foundation! Any individual pursuing Phil Schmoyer Russell Sommers a bachelor’s or advanced degree is eligible. Javier R. Tapia Additional info is available at www.nyia.org/nyisf. Looking to advertise? Please contact Stacey Orlando at 518.432.4227 or [email protected]. No part of this publication may be ensuring the future of our reproduced, stored in a retrieval system or transmitted in any form, industry starts here electronic, photocopying, recording, mechanical, or otherwise without prior written permission of the publisher.