Risk Insider: Brady Kelley

Congress: Let E&S Underwrite Unique Flood Risks

By: | May 11, 2015 • 2 min read
Brady R. Kelley has served as NAPSLO’s Executive Director since September 2011. He is responsible for the overall management of the association’s staff activities, services to members and business operations. He can be reached at [email protected]

I strongly support revisions to the current federal definition of private flood insurance contained in the Flood Insurance Modernization and Market Parity Act of 2014 introduced in the 113th Congress. I believe it is necessary for Congress to amend the current definition to ensure that surplus lines insurers are eligible to offer private market solutions and alternatives to consumers with unique and complex flood risks.

The surplus lines market plays an important role in providing insurance for hard-to-place, unique or high capacity risks. Often called the “safety valve” of the insurance industry, surplus lines insurers fill a need for coverage in the marketplace by insuring risks that are declined by the standard underwriting and pricing processes of admitted insurance carriers.

Surplus lines insurance is used to cover risks that are difficult to place, where the standard market is unwilling or unable to provide the level of coverage needed, such as flood coverage in coastal areas.

The Biggert-Waters Flood Insurance Reform Act of 2012 sought to expand the ability of private insurers to offer flood insurance solutions as alternatives to the National Flood Insurance Program (NFIP). However, its definition of private flood insurance should be clarified to ensure that surplus lines insurers are part of the solution.

Any misinterpretation of the existing definition could unintentionally limit the surplus lines market’s historical effectiveness as a supplemental market for risks that exceed the capacity of the NFIP.

It is important to note that surplus lines insurers currently underwrite private insurance flood policies primarily in commercial lines and, to a very limited degree, in personal lines.

Well before the Biggert-Waters Act of 2012, surplus lines flood insurance policies were underwritten as a supplemental option for insureds seeking flood insurance coverages in excess of the capacity of the NFIP.

Often called the “safety valve” of the insurance industry, surplus lines insurers fill a need for coverage in the marketplace by insuring risks that are declined by the standard underwriting and pricing processes of admitted insurance carriers.

The Flood Insurance Modernization and Market Parity Act of 2014 intended to preserve the surplus lines market’s ability to provide the supplemental coverage it has historically provided and to provide insureds with coverage options for unique and complex risk that exceeds or differs from the options available through the NFIP or the standard market.

The purpose of the 2014 Act was to clarify that a surplus lines policy is an acceptable private flood insurance option. Its definition of private insurer includes any insurer that is licensed, admitted or otherwise “eligible” to engage in the business of insurance in the state or jurisdiction in which the insured property is located. Its use of the term “eligible” is important because of its consistency with the nationwide surplus lines insurer eligibility standards established by the Nonadmitted and Reinsurance Reform Act (NRRA) of 2010.

The Flood Insurance Modernization and Market Parity Act of 2014 continues to be the right solution. It preserves an effective supplemental market, provides options for insureds with unique and complex risks, and it provides mortgage lenders with more clarity regarding the acceptance of private flood insurance policies.

I therefore encourage Congress to enact legislation in 2015 to accomplish the goals of the 2014 Act.

Risk Management

The Profession

Pinnacle Entertainment’s VP of enterprise risk management says he’s inspired by Disney’s approach to risk management.
By: | November 1, 2017 • 4 min read

R&I: What was your first job?

Bus boy at a fine dining restaurant.

R&I: How did you come to work in this industry?

I sent a résumé to Harrah’s Entertainment on a whim. It took over 30 hours of interviewing to get that job, but it was well worth it.

R&I: If the world has a modern hero, who is it and why?

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The Chinese citizen (never positively identified) who stood in front of a column of tanks in Tiananmen Square on June 5, 1989. That kind of courage is undeniable, and that image is unforgettable. I hope we can all be that passionate about something at least once in our lives.

R&I: What emerging commercial risk most concerns you?

Cyber risk, but more narrowly, cyber-extortion. I think state sponsored bad actors are getting more and more sophisticated, and the risk is that they find a way to control entire systems.

R&I: What is the riskiest activity you ever engaged in?

Training and breaking horses. When I was in high school, I worked on a lot of farms. I did everything from building fences to putting up hay. It was during this time that I found I had a knack for horses. They would tolerate me getting real close, so it was natural I started working more and more with them.

Eventually, I was putting a saddle on a few and before I knew it I was in that saddle riding a horse that had never been ridden before.

I admit I had some nervous moments, but I was never thrown off. It taught me that developing genuine trust early is very important and is needed by all involved. Nothing of any real value happens without it.

R&I: What about this work do you find the most fulfilling or rewarding?

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Setting very aggressive goals and then meeting and exceeding those goals with a team. Sharing team victories is the ultimate reward.

R&I: What is the most unusual/interesting place you have ever visited?

Disney World. The sheer size of the place is awe inspiring. And everything works like a finely tuned clock.

There is a reason that hospitality companies send their people there to be trained on guest service. Disney World does it better than anyone else.

As a hospitality executive, I always learn something new whenever I am there.

James Cunningham, vice president, enterprise risk management, Pinnacle Entertainment, Inc.

The risks that Disney World faces are very similar to mine — on a much larger scale. They are complex and across the board. From liability for the millions of people they host as their guests each year, to the physical location of the park, to their vendor partnerships; their approach to risk management has been and continues to be innovative and a model that I learn from and I think there are lessons there for everybody.

R&I: What is the risk management community doing right?

We are doing a much better job of getting involved in a meaningful way in our daily operations and demonstrating genuine value to our organizations.

R&I: What could the risk management community be doing a better job of?

Educating and promoting the career with young people.

R&I: What have you accomplished that you are proudest of?

Being able to tell the Pinnacle story. It’s a great one and it wasn’t being told. I believe that the insurance markets now understand who we are and what we stand for.

R&I: Who is your mentor and why?

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John Matthews, who is now retired, formerly with Aon and Caesar’s Palace. John is an exceptional leader who demonstrated the value of putting a top-shelf team together and then letting them do their best work. I model my management style after him.

R&I: What is your favorite book or movie?

I read mostly biographies and autobiographies. I like to read how successful people became successful by overcoming their own obstacles. Jay Leno, Jack Welch, Bill Harrah, etc. I also enjoyed the book and movie “Money Ball.”

R&I: What is your favorite drink?

Ice water when it’s hot, coffee when it’s cold, and an adult beverage when it’s called for.

R&I: What does your family think you do?

In my family, I’m the “Safety Geek.”

R&I:  What’s your favorite restaurant?

Vegas is a world-class restaurant town. No matter what you are hungry for, you can find it here. I have a few favorites that are my “go-to’s,” depending on the mood and who I am with.

If you’re in town, you should try to have at least one meal off the strip. For that, I would suggest you get reservations (you’ll need them) at Herbs and Rye. It’s a great little restaurant that is always lively. The food is tremendous, and the service is always on point. They make hand-crafted cocktails that are amazing.

My favorite Mexican restaurant is Lindo Michoacan. There are three in town, and I prefer the one in Henderson as it has the best view of the valley. For seafood, you can never go wrong with Joe’s in Caesar’s Palace.




Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]