A recent bulletin from Oklahoma Insurance Commissioner John Doak requires that property/casualty insurers in that state provide a "clarifying notice" regarding the coverage provided under earthquake insurance they write.
(While the bulletin states that all P/C companies are required to provide the notice, insurance department General Counsel Gordon Amini confirmed with AAIS that it applies only to those offering earthquake coverage.)
Doak's bulletin says that Oklahoma has experienced a "flurry" of small earthquakes since 2009, prompting consumers to take an interest in earthquake insurance. It adds that the Oklahoma Geological Survey believes the majority of the quakes result from oil and gas exploration activities generally known as "fracking."
According to Doak, consumers and producers find it hard to understand insuring clauses, exclusions, and exceptions to exclusions in earthquake polices, and often discover that "man-made" earthquakes are not covered.
In response, the state provides sample language in the bulletin for notifying agents and policyholders whether or not coverage under an earthquake policy extends to property or liability loss resulting from activities associated with fracking.
The notice is to be provided to policyholders no later than 45 days after the release of the bulletin on Oct. 20, 2015.
AAIS Advisory notices are posted periodically to announce AAIS product developments, and to provide news items that are relevant to our program users. Advisory notices are news summaries that paraphrase documents which should be consulted directly for complete, authoritative information.