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WASHINGTON (April 5, 2022)

The Regulators S4 E1: A Regulator Discussion on Disaster Preparedness with Colorado Insurance Commissioner Michael Conway

On this episode of The Regulators, Commissioner Michael Conway of the Colorado Department of Regulatory Agencies Division of Insurance joins us to talk about disaster preparedness. After the Marshall Fire ravaged Colorado, fire mitigation weighs even heavier on Commissioner Conway's mind as he works to protect consumers. 


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Complete Transcript:

The Regulators S4E1: A Regulator Discussion on Disaster Preparedness

(Preview) Colorado Insurance Commissioner Michael Conway People still don't really think it's going to happen to them. Mitigation works a whole heck of a lot better if the community is really kind of taking steps together to try and mitigate and be prepared for fire. … They were sitting in traffic with fire burning around them and smoke everywhere, and they weren't sure exactly how, or if, they were going to be able to get out.

NAIC CEO Mike Consedine Welcome to The Regulators, a podcast where we break down important insurance issues facing consumers, regulators, and the industry. I'm your host, Mike Consedine, CEO of the NAIC. Today I'm joined by Commissioner Michael Conway, who is commissioner of the Colorado Division of Insurance. He also has the privilege of being my home state commissioner, and he's doing a fabulous job. And today Mike and I are going to talk about an issue near and dear to his heart and in some ways very personal to him, which is disaster preparedness. Thanks for joining us, Mike.

Colorado Insurance Commissioner Michael Conway Thank you, Mike. I'm happy to be here.

NAIC CEO Mike Consedine We've got a lot to talk about in this area. And as I said, both of us sitting here in Colorado, this is a topic that is very personal to your friends and neighbors and everyone in the state and probably across the country. And it's only been a few months since the Marshall Fire, which is, I think, the largest wildfire in Colorado's history, and we're going to talk more about that fire and lessons learned. But before we do that, let's set the stage a little bit and talk about disaster management. And there are, you know, kind of from an academic four phases to that. You've got mitigation, preparedness, response, and recovery. And at the NAIC, we spend a lot of time thinking and talking about those first two phases: mitigation and preparedness. Let me ask you, I mean, do you think consumers share the same focus on mitigation and preparedness? And what advice would you have for our audience about mitigation steps they can take and what form mitigation can take?

Colorado Insurance Commissioner Michael Conway Yeah. So, Mike, I think those are great questions. On the mitigation side of things, I think there's a lot that goes into it when we talk about it with consumers, when we talk about it just more broadly than just consumers. There is, I think, a few different things for folks to be thinking about. And I should say, too, the mitigation that I think is important in Colorado may… those types of mitigation steps won't actually be very effective at all along coastal areas. Right? The mitigation that they need to do is going to be very, very different because they're not… their primary concern, it's not fires. Their primary concern are obviously windstorms and things of those natures. So, but in here, when we talk about mitigation, we're primarily thinking about fire risk, and I think that there's a few different steps that people should be thinking about. And more than just people, it needs to be, it needs to really be at a community or at a municipality level, really, when we start thinking about kind of the lessons learned from the Marshall Fire. But certainly individuals, individuals that are in the wild and urban interface, the WUI[JC1] , as we like to refer to it, have it, have, I think, a greater knowledge of their need to mitigate and take steps to clear shrubs around their homes, to clear kind of the undergrowth around their homes. And they understand that that's vitally important. But when you go into those communities, they also understand that mitigation works a whole heck of a lot better if the community is really kind of taking steps together to try and mitigate and be prepared for fire, because that's the world that we have to live in now. We have to be prepared for fire. And then I think, like I was talking about, there's some serious lessons that we have to learn coming out of the Marshall Fire. That we're going to need counties and municipalities to step up and take steps to mitigate the impacts or the potential impacts of wildfire, too. So, I think there's, there’s, well, it's kind of at a graduated level. There's at the individual level folks can do that take steps to mitigate their homes and make them a little bit safer for fires. At the community level, you can take steps, and you need to take steps. And then I think at the, at the broader level, at the municipality and state level, we need to be thinking about it, too.

NAIC CEO Mike Consedine Yeah, and you know, what's been interesting to me, as we've sort of gone on this educational journey as an organization and, you know, through our members is, you know, I think a lot of consumers are intimidated by the whole concept of mitigation and preparedness. And they think in terms of, “Oh my gosh, you know, you're talking about, you know, putting on $50,000 roofs and super, you know, expensive fixes.” And, really, there, there's any number that they can take that are relatively easy to do. I mean, you hit a great one just in terms of, you know, taking a look at the perimeter of your house and, you know, moving away any sort of dry shrubs or mulch away from sort of the areas around your house. You know, another one we talked about… We actually did a Twitter chat a couple of years ago on disaster preparedness. And the topic was, you know, “What's in your go bag?” And, you know, again, for a lot of people, just having a bag that they can have ready to go with key essentials is an easy thing to do. But folks don't think in those terms. But I'm curious as to what would be in your go bag? But the broader question is, you know, what additionally, you know, are some of those simple steps? And as you talk to consumers, is your experience the same, that they don't, you know, they're intimidated by this whole concept? Or, you know, there's a lot of fear involved, as well, particularly given some of the experiences that they've had.

Colorado Insurance Commissioner Michael Conway Yeah, so the go bag questions. That's a fun one. On the fear side of things, I think it's right that there is a lot of fear out there for folks and a lot of uncertainty about where to start. And they're thinking about taking steps to try and to be prepared, whether it's mitigation or having a go bag. There's lots of resources in Colorado, on the mitigation side. There's lots of resources within communities, especially in communities in the WUI. You can even, a lot of the counties, you can call up your local county fire department, and they'll come out and help you think through kind of the different things that you should be doing in order to, again, be prepared and mitigate. As far as the fear overarchingly is concerned, there's a fear component to it, Mike, but there's also an aspect to it that people just even with as many fires as we've had over the last 10 years in Colorado, even over the last couple of years in Colorado, people still don't really think it's going to happen to them.

NAIC CEO Mike Consedine Right.

Colorado Insurance Commissioner Michael Conway So just having that conversation, that nobody wants this to happen. I don't want this to happen to anybody, any of the Coloradans, any of my fellow Coloradans. But I also know that it's imperative for people to be prepared. So going to the go bag piece of it. You know, I think one of the lessons that we're learning out of the Marshall Fire is that these fires can happen, obviously, at any point. The Marshall Fire happened in the middle of the day, and in some ways that was a blessing, because if it happened in the middle of the night, because of how fast it moved, it would have been...I think we would have lost a lot more people. So in one way, it was good that it happened in the middle of the day. But that also meant that people weren't in their homes to grab their go bags. And tragically, a lot of them weren't in their homes to grab their pets, either. But so, I think on the go bag front, what that means is that it's going to be really important for you to understand the best ways for you to get to the vital documents that you need. From an insurance perspective, right, everything is electronic, so you're going to have to be able to get access to your documents on that front. I think what we learned as a state, though, is that we need to be, we need to create access to other vital documents that people are going to need after a fire. Things like just being able to get your license or your homeowner's documents. I mean, any number of different things we had to make readily accessible to folks. The pure go bag question, though. I think, you know, the one thing that I would make sure, that I need to actually make sure, that we have in our go bag. Our three-year-old little boy sleeps every night with like a quasi-Batman blanket/stuffed animal. We need a replacement for that. Otherwise, if we lost that thing, it would be bad news.

NAIC CEO Mike Consedine Yeah. No. Well, that's all good tips. And again, I think especially for parents thinking in some of those terms, especially for their kids. I mean, that's a traumatic enough experience having to leave your house under those circumstances. And to have those sort of things that comfort them is a really good, good thought. Mike, let's turn to that Marshall Fire, and I kind of want to hear about your experience that day. And you and I actually were in contact that December 30th day. And if I remember correctly, it was actually a pretty day, but it got really, really, really windy. And otherwise, you know, we hadn't been in the midst of a really vigorous fire season up until that point, unlike the year before. But maybe walk us through sort of what happened on that December 30th, and how did you learn about the fire? Sort of what were your first thoughts? And how did sort of that state, county, and local team pull together in response?

Colorado Insurance Commissioner Michael Conway Yeah. So, you're right. It was a pretty day, but for the wind, and that was actually, honestly, part of the problem. We'd had a long stretch of very, very nice days for a very long period of time. It was December 30th, as you mentioned, and we hadn't had snow in Colorado up to that point. Along the front range. We’d had a little bit of snow up in the mountains, but the front range, Denver, kind of the Denver metro area, up into the Boulder, which is just north of Denver, hadn't seen any snow yet. So we were very, very dry, and it was incredibly windy that day. It was a lot like the day yesterday, Mike, to be honest. And yesterday freaked me out, too, for the sole reason of how windy it was. But we had winds that were gusting over 100 miles an hour. And I was actually… When the fire hit, when it first started, it was about noon when it started. And believe it or not, I was in the middle of a meeting with a legislator who is running a piece of legislation this year in order to respond to some of the issues that occurred as a result of the East Troublesome Fire last year, which the East Troublesome Fire from an acreage standpoint was the biggest fire of the state's history. The Marshall Fire, we lost the most homes in the state's history. So, we were in the middle of a conversation about different things that she was thinking about in her piece of legislation when the fire hit, and when the kind of messages started coming across my desk that we had a huge fire, and it was likely going to get into the towns of Louisville and Superior. And knowing what I know, right, from watching other fires and primarily California and Oregon, unfortunately, I knew as soon as the fire, if the fire did get into those towns, that it was going to be a humongous disaster. That's in fact what it turned out to be. So, I immediately started texting my friends and family and my coworkers that are up in that area to tell them to get the hell out of there. But it was, it was a bad day. So, the day kind of progressed without a ton of certainty of where the fire was, other than the fact that it had gotten into the towns. But how bad or how far it had spread was a little bit uncertain to tell until really it got dark. And as dusk started to hit, you could see from Denver the clouds of smoke coming up. And the towns… Louisville and Superior, for a point of reference for folks, they’re about 25 miles north of Denver. And it looked… The cloud of smoke, it looked like it was right in the middle of Denver. So, dusk hit. You saw the cloud of smoke, and then the helicopters were able to start broadcasting the kind of scenes of, of the towns of Superior and Louisville, and the pockets where the fire was burning, and it was just devastation.

NAIC CEO Mike Consedine Yeah, and I think one of the things that just was so terrifying for all of us is the speed at which this fire moved. And, again, it goes to just that sort of that preparedness. And you probably had a better sense of that, looking at the aftermath. Which we can talk more about the aftermath here in a second. But, you know, we're always telling consumers, you know, how fast these forest fires can move. But when you actually see it on TV and in the aftermath, I mean, it was just terrifying. And I'm sure what you heard from the people living in those homes, the stories you probably heard afterwards, made it really real for you.

Colorado Insurance Commissioner Michael Conway It did. I mean, I talked to homeowners on a constant basis. It's not, at this point, it's not still a daily basis that I'm talking to multiple folks that have lost their homes, but it's still, it's still at least five or six a week that I'm talking to on a regular basis. And their stories are, they're just, they're incredibly frightening. A ton of people lost their pets like I touched upon before, and there's a lot of trauma connected to that. But the speed, and then the other aspect that was really, really scary for folks is the traffic jam trying to get out. There were huge traffic jams as people were evacuating the cities. Luckily, we didn't have any problem, we didn't lose anybody in those traffic jams, but that was a very, very scary thing for folks. Rightfully so, right? They were sitting in traffic with fire burning around them and smoke everywhere, and they weren't sure exactly how, or if, they were going to be able to get out. So, we're at the recovery stage, though, now, and the recovery stage has its own hurdles, of course. But at least we are starting to be able to put things together to be able to provide some hope for folks that there's light at the end of the tunnel.

NAIC CEO Mike Consedine Well, let's talk about that aftermath, and you and I, and you've been vocal publicly about some of the lessons learned and some of the challenges that homeowners are facing now and sort of that recovery and rebuilding stage. And, you know, a lot of them thankfully did have homeowners insurance. But, as we're finding, you know, especially in the current economic and financial environment, just because you're insured doesn't necessarily mean you're fully covered, amongst other sort of lessons learned. Maybe you can talk a little bit sort of about that and how your office is responding to that and some of the education that you're now doing as a result.

Colorado Insurance Commissioner Michael Conway Yeah. There's two kind of core, very, very core things that people are struggling with right now. There's inventory requirements for contents coverage and getting paid out on contents coverage, and when we were able to tackle that, at least in part to help folks on that front. But the issue that you're talking about, Mike, is the other one, the other core issue, and it's the underinsurance issue. So folks that had homeowners insurance coverage, just maybe don't have enough coverage in order to actually rebuild their homes, and trying to find the solutions for those for that problem in particular is going to be something that we focus on going forward at the Division of Insurance. It's going to be something that is going to become very much my passion to find a solution for it. Because quite honestly, I'm pretty angry about it. I'm pretty angry that we find ourselves in a situation where the insurance market is just failing people. So we gotta figure out why that's the case. There is a component to it, Mike, that you're right about. That there’s the supply chain issues playing a part in the underinsurance problem. Kind of the cost to rebuild from it, from just a pure worker standpoint, play a small part, too. But we know as we're looking at the data that we've got coming in, we know that we've got companies and the situations where people just didn't have enough coverage, wouldn't have had enough coverage, even if those issues weren't in play. So we've got to figure out why that's the case. Now, we got to figure out why the market isn't kind of responding, why we don't have a healthier market on that front, and what the issues are. There's certainly a consumer education component to it. But there's also, and I firmly believe there is an aspect of this that we need the companies to step up and do a better job of explaining to their homeowners what they truly need in coverage if the worst happens. It can't purely be a conversation about trying to get homeowners the lowest premium possible, because if that's the only part of the conversation, then we end up in situations like we have up in Louisville and Superior now, where we have hundreds of homeowners that are underinsured.

NAIC CEO Mike Consedine Yeah. Well, I expect this will be a conversation and a dialog that will continue to play itself out, both here in Colorado and at the NAIC level, where I know you are very much a thought leader. And, Commissioner, before we move on to sort of the fun part of the podcast, I'd be remiss if I didn't also note that you were chair of the NAIC's Consumer Board of Trustees this year and again have been a real leader when it comes to consumer protection issues. Maybe just in a minute or so, just talk a little bit about some of the areas that our consumer advocates are interested in engaging the regulators on in the year ahead here.

Colorado Insurance Commissioner Michael Conway You know, Mike, I'm actually stepping into that chair because we lost Jessica Altman from the commissioner grouping. She, as a lot of folks know, went off to California to be the CEO of their state-based exchange. So I haven't had a chance to have that direct conversation with the consumers yet this year. But I was the chair of the Consumer Liaison Committee for the last couple of years and the chair of CBOT [Consumer Board of Trustees] for the last couple of years, as well. So to some degree, it's old hat. And assuming that the issues are the same that the consumers want to focus on, there's going to be a lot of conversations about health and health equity in particular, and that's obviously a huge component of the work that the NAIC is doing on the race and insurance front. So I think it kind of dovetails nicely there. I think this underinsurance issue that we've been talking a little bit about, Mike, today is going to be, I'm sure, part of the conversation too, and I'm going to probably encourage the consumers to make that part of the conversation.

NAIC CEO Mike Consedine Well, we'll look forward to those discussions. And again, those are really important relationships that we have with our consumer advocates, and they do a great job of making sure that these kinds of issues are top of mind. So, Commissioner, let's maybe move into something a little less serious. We like to play a little game on this podcast, and it's a chance for our listeners to get to know a different side of our guests. So it's time for us to play “Regulator Risk Roulette,” if you're up for it.

Colorado Insurance Commissioner Michael Conway Sure!

NAIC CEO Mike Consedine Okay. Well, there are six categories: Risky Business, Keep It Professional, Childish Things, Very Interesting, Getting Personal, and That's Entertainment. We're going to spin the wheel here once, and whatever category it lands on, there will be a question that you will answer. So. Ready to play?

Colorado Insurance Commissioner Michael Conway I guess so!

NAIC CEO Mike Consedine Yeah. You really have no choice at this point. You’re already committed. So. So, let's spin the wheel. [Wheel Spins] Okay. Well, we've ended up on Risky Business, and I get to pick the question. Yeah, I know. This could be fun for me, but let's go with this one. I think this one might be an interesting one for you. What is the greatest risk you've ever taken? And how did it work out?

Colorado Insurance Commissioner Michael Conway The greatest risk I've ever taken, and how did it work out? Hmm. You know, I don't know if it's the greatest risk that I've ever taken, but from a professional standpoint, the one that I was quite uncertain about, was when Marguerite Salazar, who was the commissioner before me…

NAIC CEO Mike Consedine Sure. 

Colorado Insurance Commissioner Michael Conway I was at the Attorney General's Office and had been at the Attorney General's Office for, I don't know, six or seven years at that point. She asked me to come over and be her deputy commissioner. And I was quite perplexed about that request and wasn't sure whether it was the right career move, or if I was going to be taking a huge step back. But anyways. I figured, what the hell? Why not? So I jumped over to the Division of Insurance, and now we find myself in the Commissioner’s spot. So I guess it worked out okay.

NAIC CEO Mike Consedine I would absolutely agree. As the Robert Frost poem goes, you took the road “less traveled by,” and it “has made all the difference.” And certainly made a bunch of difference to consumers here in Colorado. And, again, being one of them, I thank you for everything that you're doing. I know sometimes it is unappreciated but very important work. Thank you again, Commissioner, for joining me today on The Regulators. We hope to have you back another time and follow up on some of these issues.

Colorado Insurance Commissioner Michael Conway Absolutely. I'd be happy to come back, and thank you for having me.

NAIC CEO Mike Consedine Well, and thank you all for listening to The Regulators. Join us each month and subscribe to The Regulators wherever you get your podcasts. We'll see you next time.



About the National Association of Insurance Commissioners

As part of our state-based system of insurance regulation in the United States, the National Association of Insurance Commissioners (NAIC) provides expertise, data, and analysis for insurance commissioners to effectively regulate the industry and protect consumers. The U.S. standard-setting organization is governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer reviews, and coordinate regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally.