BerkeleyLaw Library

"AIR Worldwide (AIR) is the scientific leader and most respected provider of risk modeling software and consulting services.  AIR founded the catastrophe modeling industry in 1987 and today models the risk from natural catastrophes and terrorism in more than 50 countries.  More than 400 insurance, reinsurance, financial, corporate and government clients rely on AIR software and services for catastrophe risk management, insurance-linked securities, site-specific wind and seismic engineering analyses, agricultural risk management, and property replacement cost valuation." — About AIR (from website)

"The legal system ostensibly plays a central role in disaster prevention, response, and management. Attorneys, members of the judiciary, and decision-makers at every level of government must anticipate and respond to disasters in a coordinated manner. It is increasingly clear, however, that the law is woefully unprepared to handle disasters. A growing community of academics recognizes this problem, and is formulating solutions under the rubric of disaster law. This emerging legal academic field encompasses a wide-ranging, intra- and inter-disciplinary body of thought, research and dialogue which seeks to inform and improve disaster-related decision-making.

"On June 25th, 2007, eighteen law professors and legal practitioners who count disasters among their primary research interests, gathered at U.C. Berkeley Law School to chart disaster law's course for the immediate and long-term future. Appendix A, Workshop Participants and Agenda. Over the course of the day, participants highlighted a wide variety of important intellectual concerns and potential problem-solving strategies regarding disaster management.

"In a series of productive discussions, participants first addressed central normative issues of disaster law, including terminology and the role of the legal academy. The group then addressed four sub-areas of disaster law: international collaboration, social justice, compensation and insurance, and prevention and response. Participants' recommendations for action included the creation of an annual disaster law conference, the integration of disaster law into law teaching, and an increased internet presence.

"This white paper, a record of the milestone June 25th workshop, is intended as a tool for use by disaster law practitioners and academics in mapping the direction and future of the field."—Executive Summary.

The Report, available as three component PDF files from this site, sets out the recommendations of the Task Force convened in February 2000. "The newly formed Task Force sought to recommend floodplain management strategies designed to reduce flood losses and maximize the benefits of floodplains. The Task Force found that existing programs are inadequate to accomplish these goals and that time is of the essence."—Executive Summary.

"One of the primary goals of the Federal Emergency Management Agency (FEMA) is the prevention, or mitigation, of this country's losses from natural hazards. To achieve this goal, we as a nation need to ask what level of performance do we expect from our buildings during an event such as an earthquake. In order to answer this question, FEMA is exploring the possible development of "performance-based seismic design" criteria. Such criteria could be voluntarily used by this nation's engineers and designers to improve the performance of critical classes of buildings that are currently only designed to a "lifesafety" level to avoid collapse, but would infact probably still suffer significant damage in a design event.

"FEMA contracted with the Earthquake Engineering Research Institute (EERI) (contract number EMW-92-K-3955, Task 13) to solicit the input of the nation's leading seismic professionals in developing an action plan that could be used to develop performance- based seismic design criteria. This project and the resulting action plan have gone a long way in identifying key issues that will need to be addressed in this process.

"This action plan builds upon a similar effort that FEMA funded in 1993 with the Earthquake Engineering Research Center, now the Pacific Earthquake Engineering Research Center (PEER). The end product of that study was a similar plan, "Performance Based Seismic Design of Buildings" (FEMA-283), published by FEMA in September 1996. The material in that plan had an emphasis on the research that would be required, and has in fact been used by PEER inthe last several years as the basis for their research work inthis arena. While this action plan does an excellent job of describing the requirements that would be needed to successfully develop performance based seismic design criteria, FEMA does has some concerns, such as the proposed budget, which exceeds what FEMA is capable of devoting within the recomended time frame. FEMA is planning to identify some of the key elements of the plan and to begin to address them through a series of projects under its Problem Focused Studies program. However, without additional specific funding for this plan, it will be very difficult to accomplish the entire plan. To avoid further delay, FEMA has decided to publish this document as a "final draft for informational purposes only. Publication of this document in no way obligates this or any other Federal agency to any portion of plan contained herein. The information and opinions contained in this document are solely those of EERI and the project participants and do not necessarily represent the views of FEMA.

"In closing, FEMA sincerely wishes to express its, gratitude to all who were involved in this project. The results of their hard work will play an important role as this country moves forward towards performance-based seismic design and reducing the losses suffered by this nation's citizens after the next earthquake."—Foreward.

"The U.S. Congress established the National Flood Insurance Program (NFIP) with the passage of the National Flood Insurance Act of 1968. The NFIP is a Federal program enabling property owners in participating communities to purchase insurance as a protection against flood losses in exchange for State and community floodplain management regulations that reduce future flood damages. Participation in the NFIP is based on an agreement between communities and the Federal Government. If a community adopts and enforces a floodplain management ordinance to reduce future flood risk to new construction in floodplains, the Federal Government will make flood insurance available within the community as a financial protection against flood losses. This insurance is designed to provide an insurance alternative to disaster assistance to reduce the escalating costs of repairing damage to buildings and their contents caused by floods."—NFIP Program Description.

"The series of recent large-scale catastrophes casts doubt on the ability of the private insurance and reinsurance markets alone to absorb losses resulting from large-scale disasters in the future. And 'mega-risks' are beyond the capacity of the insurance industry or even governments to insure and clearly call for privatepublic partnership and international co-operation.

"Preparing to deal effectively with the hugely complex threats of the 21st century and their financial consequences is a major challenge for decision makers in government and the private sector alike, and one that needs to be addressed as a matter of urgency."—The issues at stake.

"This symposium provides a forum for scholars to begin conceptualizing a new field of legal scholarship devoted to catastrophic risks. It is hard to think of anything equally important that has received so little sustained attention from lawyers and law professors. Hurricane Katrina involved over a thousand deaths and $100 billion in losses. There is no reason to consider Katrina the 'worst case scenario.' Yet, scholars have not yet systematically addressed the legal and policy issues posed by major disasters. Ultimately, the goal should be assembling the best portfolio of social policies, institutions, and legal rules to deal with catastrophic risks—a portfolio that includes prevention measures, mitigation incentives, emergency response strategies, liability rules, insurance, and reconstruction planning. In this symposium, papers by legal scholars and policy analysts will address these as well as other issues relating to this critically important subject."—Dan Farber, Editor, Introduction. Access to this bepress journal requires a subscription.

"The devastation wrought by hurricane Katrina along the Gulf Coast has once again reminded citizens, policymakers, and academics of the difficulties of making decisions regarding development in risk-prone locations. This paper has highlighted that government does not face a simple decision of how much protection to offer investments, nor do private entities face a simple decision of how much to invest in an area with a given risk level. Instead, government and investors respond to each other, with investment increasing when protection levels are raised, and government raising protection when investment in a risky location grows. When the marginal value of protection increases with the level of protection provided, the game may have multiple equilibria. Thus, given an ill-behaved benefits function, a local optimum may not be the global optimum, which complicates policy decisions, as does the uncertainty regarding the level of investment that will follow a given level of protection."—Conclusion.

"Prior GAO audit and investigative work on FEMA's controls over IHP [Individuals and Households Program] payments and DHS's controls over purchase cards emphasizes one fundamental concept—that fraud prevention is the most effective and efficient means of minimizing fraud, waste, and abuse. GAO estimates that FEMA made about 16 percent or almost $1 billion dollars in improper and potentially fraudulent IHP payments to registrants who applied using invalid information, illustrating what can happen when fraud prevention controls are ineffective. For example, GAO found that FEMA made payments based on bogus damaged addresses, false identities, and identities belonging to federal and state prisoners. These findings highlight the need for effective controls over all types of recovery disbursements. With effective planning, relief agencies should not have to make a choice between speedy delivery of disaster recovery assistance and effective fraud prevention."—What GAO Found.

"The Natural Hazards Review stands on the realization that natural disaster losses result from interactions between the physical world, the constructed environment, and the character of the societies and people who occupy them. The journal is dedicated to bringing together the physical, social, and behavioral sciences; engineering; and the regulatory and policy environments to provide a forum for cutting edge, holistic, and cross-disciplinary approaches to natural hazards loss and cost reduction.... Social and behavioral sciences topics addressed include a range of issues related to hazard mitigation and human response as well as significant issues related to the built environment such as land use, building standards, and the role of financial markets and insurance."—Aim and Scope.

"This testimony updates past work and provides information about ongoing GAO work on issues including (1) [National Flood Insurance Program's] (NFIP)financial structure, (2) the extent of compliance with mandatory requirements, (3) the status of map modernization efforts, and (4) FEMA's oversight of the NFIP."—Why GAO Did This Study

"This Flood Management White Paper presents an overview of the current condition of flood management in the Central Valley and outlines a plan to reduce flood risks through an integrated approach for better planning, new investments, improved management of our infrastructure and closer collaboration between water agencies and users."—Executive Summary.

Links to state and federal information resources.

"This Policy Comment analyzes the connection between hurricane mitigation and insurance. As many people fail to purchase government-subsidized flood and earthquake insurance, some researchers argue that market failure explains the lack of mitigation. But empirical evidence shows that markets do value natural hazards risks, including hurricane mitigation, and thus the case for market failure has been overstated."—Abstract.

"Katrina demonstrated the growing vulnerability of the United States to major hurricanes. This paper analyzes the sources of growing hurricane vulnerability, due to the increasing number of people and property in the U.S. Atlantic and Gulf counties since 1950. The analysis specifically focuses on policy interventions in insurance markets, or states with "hurricane pool" residual market mechanisms. Regressions show that coastal county growth increased after establishment of a pool by 16,000 to 22,000 persons and 4,000 to 6,000 housing units per decade. But hurricane pools do not affect the percentage growth rates of population or housing units. Direct election of insurance commissioners may have contributed to growth as well, but this increase fails to attain statistical significance. Together these results indicate a possibly significant role for insurance subsidies as driving coastal population growth. A land-falling hurricane did not slow growth during a decade, but counties with greater hurricane risk also grew significantly faster, which may be evidence that people ignore hurricane risk in making location decisions."—Abstract.

"Losses from hurricane catastrophes have accelerated in recent years, with seven of the top nine hurricanes ranked by insured losses occurring during 2004 and 2005. Hurricane losses have affected the availability of insurance in coastal states and contributed to enormous growth in state residual wind markets. Of particular policy concern is the possibility that homeowners, businesses and insurance companies are not investing in the efficient amount of mitigation to reduce hurricane losses.

"This paper examines some of the potential barriers to the adoption of efficient mitigation and reviews specific state insurance regulation and legislation that impedes and encourages mitigation. Premium discounts and hurricane deductibles, which are waived if property owners invest in mitigation, provide incentives for mitigation, but mitigation discounts mandated by legislators potentially could represent disguised insurance subsidies. Irrationalities in decision-making such as low-probability event bias, myopia, and inertia might make it difficult for insurers to convince property owners to invest in mitigation. But this is not different in type from the problem entrepreneurs face in general in making consumers aware of the value of products. Restrictions on contractual mechanisms insurance companies can use to encourage mitigation, like requiring mitigation as a condition for renewal of coverage or funding mitigation after a disaster through long term loans or contracts, could prevent insurers from using effective incentives for mitigation, and could reduce the supply of insurance in coastal areas."—Abstract.

"Building codes have been stressed as a measure to reduce vulnerability to hurricanes and other natural disasters. Almost all U.S. states have adopted a building code, but building codes do not enforce themselves. In this paper, Professor Sutter explores the determinants of building code enforcement across states using ratings from Insurance Services Office. Overall enforcement is not outstanding, as only five communities have the best rating of 1 and less than 7% have one of the three top ratings. Although proposed as a means to reduce damage from natural hazards, enforcement is not on average better in states vulnerable to hurricanes and earthquakes; enforcement is actually lower in states vulnerable to earthquakes. Enforcement generally improves with a larger state and local government, while political corruption reduces enforcement for personal insurance lines. Building codes are better enforced in more urban states, consistent with beneficial competition between local governments, although this result might be an effect of income. Greater inequality does not affect enforcement."—Abstract.

Topics covered include charities; Coast Guard & seaports; energy supply; environment & natural resources; flood control; infrastructure; insurance; military's role, including National Guard & Reserves; preparedness; public health; response; and recovery.

"The mission of the Wharton Risk Management and Decision Processes Center is to carry out a program of basic and applied research to promote effective policies and programs for low-probability events with potentially catastrophic consequences. The Center is especially concerned with natural and technological hazards and with the integration of industrial risk management policies with insurance. The Center is also concerned with promoting a dialogue among industry, government, interest groups and academics through its research and policy publications and through sponsored workshops, roundtables and forums."

"By  request  of  the  Department  of  Financial  Services  of  the  State  of  Florida,  Risk  Management  Solutions (RMS)  has conducted  an  impact  analysis  of  the  My  Safe  Florida  Home  (MSFH)  program.  The  RMS®  U.S. Hurricane Model was  used  to  analyze  the  impact  of  the  program  on  individual  structures  retrofitted with MSFH  grant  money.  Unlike  other  studies  that  focus  on  the  benefits  to  individual  structures,  this  study explores  the  benefits  on  a  statewide  basis.  The  results  of  the  study  found  that  the  MSFH  program  has reduced the statewide economic liability and the risk carried by the homeowners in Florida." — Executive Summary