Earthquake Quarterly - Summer 1998

 

Table of Contents

From the Desk of the Executive Director

National Earthquake Research Centers’ Updates

A Strategy for a Governmental Role in Mitigating Seismic
Hazards: Disaggregation

Strategic Implementation Plan for Tsunami Mitigation Projects

Earthquake Insurance: Public Policy Perspectives

Earthquake Insurance: Public Policy Analysis
by James Ament, State Farm Fire and Casualty Company

Financing Catastrophe Risk and the Role of Government
by Frank W. Nutter, Reinsurance Association of America

The Role of the Insurance Industry in Earthquake Mitigation
by Susan Bithell, Farmers Insurance

Mitigating the Risk: Engineers and Builders
by Janiele Maffei, Degenkolb Engineers

The Mitigation Demand Survey

WSSPC Board Corner

From the Desk of the Executive Director

It is summer in The City. The sun is shining, the birds are chirping, and the WSSPC staff members are working hard in their offices. As you can tell by the recent flood of information and mailings, we are working overtime to enhance the organization, its members and affiliates. Some would say this flood of activity is due to El Nino, however we know the work we are doing is helping achieve the mission of WSSPC: to provide a forum to advance earthquake hazard reduction programs throughout the West.

We just hosted an important Summit on earthquake insurance. The Western United States Earthquake Insurance Summit, held in June in Sacramento, California, brought together professionals from the insurance, banking, policy-making, and seismic hazards communities. This two-day event was seen as important step in finding a policy solution to this area of market failure. The Summit must be seen not as the end of the process, but only a step in the correct direction.

In this issue of EQ we feature four articles that were included in the Summit volume. These articles offer you a glimpse of the topics presented and discussed. You can read more articles about this topic in our recent publication Earthquake Insurance: Public Policy Perspectives that is available from the WSSPC office (see page 21). Additionally, we will continue this important dialogue at the WSSPC Annual Conference in Pasadena, California.

Speaking of the Conference, we hope that you will be able to join us for a content-packed event in September. The Conference will focus on five policy areas — Earthquake Insurance; Engineering and Construction Standards; Disaster Resistant Communities; Lifelines and Utilities; and the National Risk Assessment. Our policy sessions allow participants time to discuss these subjects in depth and draw some conclusions on the best means to address them. Details of the Conference can be found on page 12.

Finally, WSSPC is hosting its second Tsunami Hazard Mitigation Symposium during the two days prior to the Annual Conference. The Symposium will focus on improving the warning and response phase of a tsunami event. Also, the Symposium sessions will concentrate on transferring and replicating technology to the WSSPC members that are not members of the National Tsunami Hazard Mitigation Program. To learn more about the Symposium and the Strategic Plan for Implementing Tsunami Mitigation Efforts, you can refer to pages 8 through 12. Enjoy this issue of EQ and the rest of your summer.

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National Earthquake Research Centers Updates

Pacific Earthquake Engineering
Research (PEER) Center

The PEER Research Committee developed a PEER Research Program Matrix of Coordinated Project Applications on buildings (Existing Hazardous Concrete Frame Buildings), infrastructure (Typical Moderate-Span Bridge Constructions), and industrial facilities (Seismic Vulnerability of Port and Industrial Wharf Facilities) interwoven with Basic Thrust Areas in Policy, Planning, Seismic Hazards, Performance Assessment, System Reliability, and Innovative Technologies. For a listing of the PEER awarded first-year research projects, visit their website at http://peer.berkeley.edu

The PEER-PG&E Directed Studies Program consists of specific, coordinated studies to increase the earthquake reliability and safety of utility lifeline systems. With funding and support from the Pacific Gas and Electric Company, the Center initiated this program to develop and implement specific research projects that address the need for increasing the seismic reliability and safety of electrical and gas transmission and distribution systems. Project coordination involves industry sponsors, other researchers, and design professionals. For a listing of the studies under way in this program, visit their website.

The objectives of PEER’s educational program are to raise the awareness and knowledge level regarding effects of earthquakes in urban regions, and to reach out to young students to stimulate interest in earthquake engineering, with a special emphasis on under-represented minorities. For a listing of the PEER Education Programs (for levels K - Ph.D. and continuing education for professionals) visit their website. The Education Program offered 25 internships for the summer of 1998 to undergraduates interested in earthquake-related fields. The internships involve working directly with a PEER faculty researcher at one of the core or affiliated universities.

Contact Information:
Jack Moehle
Director, PEER
1301 S. 46th Street
Richmond, CA 94804-4698
510-231-9554
moehle@eerc.berkeley.edu
http://peer.berkeley.edu

Multidisciplinary Center for Earthquake Engineering Research (MCEER)

On May 1, 1998, the National Center for Earthquake Engineering Research (NCEER) changed its name to the Multidisciplinary Center for Earthquake Engineering Research (MCEER). "This new name", said George C. Lee, Ph.D., center director, "emphasizes what we feel is the key to our success — past, present and future — the integration of diverse disciplines to solve engineering and societal problems caused by earthquakes." The need for a change in name became apparent last fall when NSF expanded its national earthquake research program by establishing two new earthquake engineering research centers in addition to the one at UB.

A new name is not the only thing new at the MCEER, headquartered at the University at Buffalo. Other news includes the center’s naming of a new deputy director, $12 million in highway research funding, development of three demonstration projects, the publication of the first in a series of MCEER monographs, and the centers organization of the American Society of Civil Engineers (ASCE) 5th U.S. Conference on Lifeline Earthquake Engineering.

Michel Bruneau, Ph.D., a recognized expert on seismic evaluation and retrofit of steel bridges, buildings and masonry infrastructure, has been named MCEER deputy director. Bruneau, currently director of the Ottawa-Carleton Earthquake Engineering Research Centre at the University of Ottawa, Ontario, will join MCEER in August. He will be responsible for coordinating the center’s nationwide research program in advanced technology applications.

MCEER will receive $12 million over the next six years from the U.S. Department of Transportation to apply its expertise to improving the seismic performance of the nation’s surface transportation system. The funds, allocated under the federal Transportation Equity Act for the 21st Century, signed June 9, by President Clinton, will extend the work begun by the center in 1992 under two Federal Highway Administration contracts that have focused on federal-aid highways, bridges and tunnels.

MCEER researchers are implementing the center’s research program around three demonstration projects to examine, in real-world situations, the promise of and impediments to the use advanced technologies in reducing earthquake losses. Projects being developed involve water supply and electrical power systems of the Los Angeles Department of Water and Power, and a New York City hospital complex — projects that depict scenarios from regions offering different sets of engineering and socioeconomic circumstances that impact the application of loss-reduction measures.

"Engineering and Socioeconomic Impacts of Earthquakes: An Analysis of Electricity Lifeline Disruptions in the New Madrid Area," is the first in a series of monographs published by MCEER. Edited by Masanobu Shinozuka, Adam Rose and Ronald Eguchi, the monograph examines the potential engineering and socioeconomic effects of a repeat of the 1811-1812 New Madrid earthquakes on the electrical power system in metropolitan Memphis, Tennessee.

MCEER is serving as organizer for ASCEs 5th U.S. Conference on Lifeline Earthquake Engineering (5USCLEE), to be held August 12 - 14, 1999, in Seattle, Washington. Sponsored by ASCEs Technical Council on Lifeline Earthquake Engineering (TCLEE), the conference theme is "Optimizing Post-Earthquake Lifeline System Reliability."

For more information on MCEER programs, call 716/645-3391,
email: mceer@acsu.buffalo.edu, or visit the centers web site at
http://mceer.buffalo.edu.

Mid-America Earthquake Center (MAE Center)

The Mid-America Earthquake Center (MAE Center) has made progress since it opened its doors on October 1, 1997. The Center is now fully staffed, there has been some administrative re-organization to better serve MAE Center researchers and programs, and programs have been developed to address MAE Center research, collaborative and educational objectives.

Staffing of the Center’s administrative office at the University of Illinois was completed this spring. Dr. James Beavers joined the MAE Center staff as Deputy Director and Dr. Carolyn Sands became the Assistant Director. Dr. Beavers has two primary responsibilities. The first is to manage the research programs and the second is to establish collaboration with industry, government and professional associations. Dr. Sands is responsible for the fiscal aspect of the Center and general oversight of the Center’s education and outreach programs. Ms. Judy Watson also joined the MAE Center as Staff Assistant. Professor Daniel Abrams, MAE Center Director, continues to be responsible for all activities and initiatives.

As the Center developed, so have its programs. In addition to the two coordinated programs, Essential Facilities and Transportation Networks, a third program, Hazards Evaluation was established. Projects in the Hazards Evaluation Program will provide information to support research projects in both the Essential Facilities and Transportation Networks programs. The Education Program was also developed with the assistance of earthquake educators who identified education projects during a two-day workshop in St. Louis.

As the Center programs continue to progress, the original assigned Associate Director positions were retired and new Program Coordinators were appointed to oversee initiatives in each of the five program areas. The Program Coordinators are Barry Goodno, Georgia Tech, Essential Facilities, Tim Stark, University of Illinois at Urbana-Champaign, Transportation Networks, Arch Johnston, University of Memphis, Hazards Evaluation, Phil Gould, Washington University, Education and Neil Hawkins, University of Illinois at Urbana-Champaign, Outreach.

Efforts are being made to collaborate with the MCEER and PEER centers as well as with business, industry and professional entities. A "white paper" has been prepared on collaboration of the three centers using the social science and economic projects as a pilot project. The first formal joint-collaboration workshop between the three centers is scheduled for May of 1999. Joint-collaboration workshops are expected to occur biannually. In addition, the three centers have agreed to trilaterally fund a Workshop on Earthquake Education annually for the next four years, as well as a research symposium in the summer of 1999. To help establish relationships with business and industry, three MAE Center Regional Directors have also been named. They will represent the MAE Center in each of their regions and facilitate interaction between the Center, businesses and professional organizations. Barry Goodno, Georgia Tech, Phil Gould, Washington University and Arch Johnston, University of Memphis are the new Regional Directors. The MAE Center is also working with EERI to host the 2000 annual meeting in St. Louis. As the Center continues to pursue its research, education, collaboration and outreach agendas, information on the latest activities can be found on the MAE Center web site. Contact http:\\mae.ce.uiuc.edu frequently to see what is happening.

Southern California Earthquake Center (SCEC)

SCEC Proposes the New CALIFORNIA EARTHQUAKE RESEARCH CENTER (CERC)

CERC, successor to the Southern California Earthquake Center (SCEC), is a newly proposed California-wide earthquake-science research center, one of 44 proposed to the National Science Foundation in a nationwide competition for ten new Science and Technology Centers beginning F/Y 2000. CERC will be an earth-science center focused on the physics of earthquakes — the physical processes and conditions that govern the occurrence of sudden slip on faults in earthquakes and the shaking that results. The resulting physical understanding will enable us to develop an advanced approach to seismic hazard assessment in California that is based upon greatly improved estimates of locations and sizes of future earthquakes and time-dependent probabilities of occurrence. It will allow us to incorporate realistic simulations of dynamic rupture and wave propagation into our models so we can synthesize seismograms of strong ground shaking from scenario earthquakes needed in performance-based seismic design of structures.

CERC researchers will work in concert with the newly-funded NSF Pacific Earthquake Engineering Center (PEER). Both centers are vital to reducing the risk from future damaging earthquakes, surely to occur with the next few decades in California. CERC will define when and where earthquake are likely to occur and calculate the expected ground motions, while PEER will use the ground motions as input to engineering design of earthquake resistant structures.

Why is CERC important to California? The state is an earthquake-prone region with a large and growing population. Much development is occurring in the seismically-active coastal zone, in close proximity to the San Andreas system of faults. Billions of dollars are being spent on high technology, financial services, entertainment, and lifelines (utilities and transportation systems) that are vulnerable to earthquakes, yet vital to the state’s economy. Refining our understanding of the seismic hazard has important implications for public safety - for emergency preparedness, seismic zonation, improving building codes, and input to engineering design of structures.

CERC, like SCEC, will dedicate an important fraction of its resources to knowledge transfer and education. Principal products will be improved models of earthquake occurrence and ground shaking as a means of reducing earthquake hazard in California. SCEC has developed strong ties to public officials, emergency preparedness groups, practicing engineers, insurers, and the K-12 educational community in southern California through a proactive, multifaceted outreach program. CERC will build upon this statewide. Located on the "Ring-of-Fire," CERC will be a leader in promoting seismic safety around the Pacific Rim - the commercial focus for the 21st century.

CERC core institutions include the Universities of California at Berkeley, Davis, Los Angeles, San Diego, Santa Barbara, and Santa Cruz; San Diego State University, California Institute of Technology, Stanford University, University of Southern California, University of Nevada at Reno, Columbia University, Harvard University, and Massachusetts Institute of Technology. CERC will partner with the California Department of Conservation’s Division of Mines and Geology, Lawrence Livermore National Laboratory, NASA’s Jet Propulsion Laboratory, the Pacific Earthquake Engineering Research Center, and the U.S. Geological Survey. These partnerships are essential for converting scientific knowledge to end-user products.

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A Government Role in Mitigating Seismic Hazards:
Disaggregating Needs

by Steven Ganz

Western States Seismic Policy Council

If a government is to successfully encourage and undertake mitigation projects, it first must thoroughly understand the need for and the benefits of mitigation. In the last issue of EQ, I argued that it is appropriate for the government to be involved in earthquake hazard mitigation activities — activities that are primarily seen as a private activity. The principal rationale for a governmental role in this activity is to incorporate the externalities, also known as public benefits and public costs, that arise from mitigation efforts. Without the government’s involvement these benefits would not be realized due to the difficulty in coordinating individual costs and benefits through the private market.

As Graph 1 illustrates, it is with government assistance that the optimal amount of mitigation (Q*) can be obtained from a societal perspective (for more details see EQ, Spring 1998). It is critical to remember that this graph represents the aggregate of all of the supply and demand curves for consumers of mitigation and for the different types of mitigation.

I propose that before the government acts, it must understand the preferences of the populace and it must disaggregate different types of structures in order to appropriately target its efforts.

Priorities for public spending on any mitigation efforts should be focused on activities in which there would be significant public benefit. We must disaggregate the supply and demand curves, (Graph 1), in order to make sound policy. Each company, government, and individual has a different curve. To conceptualize these different preferences, let us use the example of three mitigation consumers — Mike, Gil and Ted. All three of these individuals are considering shear-walling their homes that have 600 square feet of cripple wall space. Each of our consumers have different preferences on how much they are willing to pay for shear-walls. If shear-walling cost $1.00/per square foot, Mike would be willing to buy 600 sq. feet, Gil would be willing to buy 600 sq. feet and Ted would be willing to buy 400 sq. feet. If shear-walling cost $2.00/per square foot, Mike would be willing to buy 500 sq. feet, Gil would be willing to buy 300 sq. feet and Ted would be willing to buy 200 sq. feet. If shear-walling cost $3.00/per square foot, Mike would be willing to buy 400 sq. feet, Gil would be willing to buy 150 sq. feet and Ted would be willing to buy 100 sq. feet. By graphing these preferences (Graph 2) we can see how these consumers would react in the shear-walling market. We can create a single demand curve for shear-walling by adding these individual preferences (represented by Curve D in Graph 3).

It is important to note that mitigation activities are scaleable. While our consumer may have a fixed amount of cripple walls to retrofit, they may choose to only shear-wall portions based on their willingness to purchase mitigation services.

A similar exercise can done to determine the supply curves for the provision of shear-walls by looking at companies willingness to provide shear-wall services at different prices. We can also derive supply and demand curves for other forms of mitigation by looking at their respective markets. We can then develop the aggregate demand curve for mitigation as depicted in our original graph by combining all of these forms of mitigation into a single market-basket of goods.

The most economically efficient method for setting priorities for mitigation is to disaggregate the supply and demand curves. Unfortunately at this point in time we do not know the supply and demand curves of our mitigation consumers. To derive these curves a comprehensive survey would need to be conducted (see "The Mitigation Demand Survey" on page 23). This survey allows policymakers to make more accurate decisions, however, it would be very expensive and time consuming to conduct.

As an alternative, I suggest we undertake the exercise to disaggregate structures and target efforts accordingly. Remember, earthquakes don’t kill people, structures kill people.

How would we go about this?

First, we break down the numerous types of structures into categories. This is necessary because each category has different building types and different uses, therefore some categories should have a higher priority on the governments’ agenda. A sample disaggregation chart can be seen in Diagram 1.

Second, we estimate the losses if a major event occurs. The questions to ask include: What would be the loss of life? What are repair or replacement costs? What would be the costs of business interruption or long-term economic losses?

Third, we identify the different forms of the mitigation options available to each of these groups. A comprehensive list of solutions needs to be developed. From structural options such as retrofitting (or rebuilding) unreinforced masonry school buildings and bolting down electrical power transformers to non-structural options such as bracing central computers for police and fire operations to securing light fixtures in office buildings.

It is my suggestion that during this step in the exercise a multi-hazard perspective is used to maximize the mitigation dollar. Hardening of critical facilities can be done to address earthquakes, as well as flood, wildfire, hurricane and other natural or man-made disasters.

Fourth, we must ascertain if there is any public benefit from undertaking these activities. While the government should encourage mitigation activities that do not result in any significant public benefit, its priorities should be placed on those activities that do. High public benefit mitigation activities should have top priority. Public structures should be the government’s first responsibility.

The weighting of priorities is both subjective and political, but it is these priorities that must be considered in this exercise to make it feasible to implement. A clear set of criteria must be established to assist in setting the priorities.

Fifth, we must develop a package of incentives to encourage the implementation of these mitigation efforts. The incentive should target the different types of structures. For government buildings, a mandate of standards can work, but government mandates may not be appropriate for individual home owners. Subsidies for important types of building materials will encourage a higher rate of consumption of these goods. Another alternative may be "retrofit vouchers". These vouchers would be redeemable only for items from a list of mitigation efforts, but then consumers can choose. In the next issue EQ, I will expand on these and many other new and innovative mitigation incentives.

Developing incentives offers an ideal opportunity to develop public/private partnerships. The government can not, and should not, take on the project of mitigating natural hazards by itself. Working with the private sector is the only way to succeed. However, if the government first disaggregates and then targets its efforts, success is more likely.

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Strategic Implementation Plan for Tsunami Mitigation Projects:
Submitted to the Mitigation Subcommittee of the National Tsunami Hazard Mitigation Program

Lori Dengler, Department of Geology, Humboldt State University

The following is an excerpt from Strategic Implementation Plan Tsunami Mitigation Projects that was submitted on April 1998

Executive Summary

The National Tsunami Hazard Mitigation Program is a Federal - State partnership to reduce risks from tsunamis. The National Oceanographic and Atmospheric Administration, United States Geological Survey, the Federal Emergency Management Agency, and the States of Alaska, California, Hawaii, Oregon and Washington are working together to assess tsunami hazard, facilitate communication of hazard information, improve early detection of tsunamigenic earthquakes, reduce false tsunami alarms, and support tsunami mitigation efforts for at-risk communities.

The Steering Committee of the National Tsunami Hazard Mitigation Program approved the Strategic Implementation Plan presented by the Mitigation Subcommittee at the April 1998 meeting. The strategic implementation plan responds to the need to define, prioritize and coordinate the mitigation efforts of the National Program. It emphasizes the efficient use of available resources, implementation of the technical results of the National Program at the state and local level, collaboration and sharing of information among the states and federal agencies, incorporation of tsunami issues into existing all-hazards programs, and the reporting and dissemination of program results.

THE plan recognizes:

• The different tsunami exposure and unique demographic situations of the five Pacific states.

• The importance of utilizing existing materials and products when possible.

• The need to incorporate tsunami efforts into existing earthquake and all-hazard mitigation programs for tsunami mitigation to be viable.

• That mitigation is a complex task involving a variety of products and projects of differing scope and scale.

• The need to couple product development with a well-defined method of distribution and dissemination.

• That mitigation ultimately cannot succeed without the support of local populations.

 

Tsunami mitigation is similar in many ways to mitigating other natural hazards. It requires knowledge of the hazard, its likely effects, and what can be done to reduce those effects. However, in several ways the tsunami hazard poses particularly difficult obstacles. The Strategic plan includes the following special considerations:

1) Destructive tsunamis are very rare events.

 

Even in Hawaii, which historically has had the greatest tsunami exposure, a whole generation has never experienced one. For most people, residents of coastal areas and emergency planners/responders alike, the tsunami hazard seems remote and of less importance that more frequently reoccurring problems. This increases the difficulty in allocating scarce resources and contributes to considerable confusion about tsunami risk and safety. Images promoted by the popular media increase public misconceptions and make tsunami mitigation more difficult. All mitigation efforts are more effective when undertaken before the advent of a natural hazard; for tsunami mitigation it is critical. The next event may well be the Big One with no "wake-up call" to spur mitigation efforts ahead of time.

 

2) Much of the at-risk area has low population densities.

 

In all five Pacific States, the majority of the coastline at risk of tsunami flooding is rural and, in many cases, sparsely populated. These regions often have difficulty competing with more populated areas for scarce mitigation resources. Current national mitigation priorities are targeted at urban areas. Even though sparsely populated, the potential loss of life, property and infrastructure to tsunami is large. The Big Island of Hawaii, with a total population of about 150,000 people, has lost over 220 lives since 1946, more than twice the loss of life in the Loma Prieta Earthquake and Northridge Earthquake combined. About 120 lives were lost to tsunami in the Great 1964 Alaskan earthquake, in relatively small towns and cities.

3) Locally-generated tsunamis are accompanied by significant earthquake effects.

 

Communities in the epicentral region of a major tsunami-generating earthquake must deal with significant earthquake-related impacts in addition to tsunami flooding and damage. This includes significant damage to roads, structures, communication networks, and other vital lifelines, in areas both within and outside of the zone of potential tsunami inundation. Dissemination of warning information and coordinated official evacuation will be virtually impossible. Major population centers away from the coast are likely to suffer other impacts from the earthquake and may be unable to lend immediate assistance to coastal communities.

4) Local tsunami mitigation must rely strongly on education.

 

Because of the difficulties in disseminating short-term warnings due to damaged infrastructure and the very short time period to take action, it is critical that all people in hazard areas immediately recognize that the earthquake is their warning and take immediate response. This involves a complicated set of behaviors -- protecting oneself during the earthquake, identifying the earthquake as an event capable of producing damaging waves, identifying one's location as hazardous, knowing how to get to a safe area, and how long one must remain away from the coast before the danger period is over. All of these actions must be taken in the absence of any official guidance and during a time of extreme personal duress. The diverse population of coastal regions further complicates this problem. Information about the tsunami risk and appropriate response needs to be communicated to residents, workers (seasonal and year-round), regional visitors, and transient populations, all of whom have different exposure to the tsunami hazard.

5) Tsunamis and their effects are uncertain.

 

There is uncertainty in all natural hazards, but recognition of the tsunami hazard, particularly the locally-generated or near-source tsunami, is relatively new to many areas of the coastal United States and the science is still young. For example, scientific studies supporting the potential hazard associated with the Cascadia subduction zone along the Pacific northwest coast are barely two decades old. Detailed inundation maps are available for few communities outside of Hawaii. Although the National Tsunami Hazard Mitigation Program will assist states in inundation mapping, tsunami hazard mitigation efforts must recognize that high quality maps for many areas, particularly rural areas, will not be available in the near future. Potential local tsunami sources are also not fully understood, particularly in the seismically active areas off of southern California and Washington. Even less is known about the interaction of tsunami waves and structures and, in contrast to seismic design and engineering, no standards have been developed in the United States for the design of tsunami-resistant structures. This means that fewer tools are available for effective tsunami mitigation.

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Earthquake Insurance:
Public Policy Analysis

by James Ament

State Farm Fire and Casualty Company

I have taken the liberty of approaching the topic of public policy analysis of earthquake insurance issues with a perspective that is a bit broader than mere insurance issues. I should probably add that the views expressed in this discussion are mine and not necessarily those of State Farm.

My beginning premise is that over time areas of this country have been and will continue to be directly affected by earthquakes large and small. These earthquakes cause damage to residences, businesses, and infrastructure. That damage in turn results in economic loss to the owners and users of that property. I will focus only on that economic damage and only as it applies to residential property.

 

Where are we today?

Current policy leaves the owners of residential property that is subject to seismic risk individually responsible for the economic consequences of any earthquake damage to their property. They are free to purchase earthquake insurance or pay for any losses themselves.

In California somewhere between 20% and 30% of owners of private residences purchase earthquake coverage. The number is generally lower in other WSSPC states. Thus, the majority of owners of property susceptible to earthquake damage do not have earthquake insurance coverage.

To the extent that the cost to repair or replace their damaged property exceeds available assets they need to borrow money in the private sector or more likely seek aid from government. To the extent that government responds the cost is shifted to the taxpayers who support the unit of government providing the relief. Absent borrowing capability or government relief it is likely that the most damaged of the uninsured residences would be abandoned. This, in turn, creates serious financial problems for mortgage lenders and can destroy affected communities.

Basic policy questions include:

• Who should be responsible for paying for actual economic loss to residential property caused by seismic events?
• What is the best vehicle for arranging that funding?

 

Who should pay for the actual economic losses?

One view is that the cost of these events should be shouldered by the population as a whole through government relief to earthquake victims. A fairly persuasive argument can be mounted in support of this view. The events are fairly infrequent and to a large extent are not the "fault" of the victims. The costs of individual events can be substantial (estimated residential property damage in the $30 - $50 billion range from a major California quake) but given the relative scarcity of major earthquakes they are not that costly if amortized over time and the population as a whole.

Government, at least at the local level, controls the location and type of buildings through zoning laws and building codes and should, the argument goes, have some responsibility for unsatisfactory outcomes.

The primary argument against this approach is that the likelihood of damaging earthquakes varies enough by parts of the country or even parts of a state that there is taxpayer resistance to the perceived subsidies involved. A second argument is that by removing the economic consequences of earthquakes from property owners in earthquake prone areas you also remove the incentives for property owners, as well as local government, to take reasonable steps to reduce potential damages.

Another view is that government should stay completely out of the picture, let those property owners who wish to do so purchase earthquake insurance in the private sector and let those who choose to go without insurance do so but not provide any government relief. The major criticism of this approach is that many property owners would end up losing their economic interest in their damaged property and would not have the resources to repair or replace the damaged property.

A third view is that property owners should be required to purchase earthquake insurance either through direct government regulation or through mortgage requirements. Mandating of coverage by government action is arguably unconstitutional and is generally unacceptable politically. There is precedence for requiring insurance coverage against a particular hazard as a part of the collateral for a mortgage loan secured by property. The National Flood Insurance Program legislation requires that all federally backed, insured, or regulated loans on property in flood prone areas be protected by a policy of flood insurance. Similarly, most mortgage loans require that insurance be maintained covering losses to the mortgaged property caused by the kinds of events insured in standard homeowners policies.

Mandated purchase of earthquake insurance by any source is difficult to accomplish due, in part, to the high cost of seismic risk. For example, coverage under a CEA policy with fairly limited coverage can range up to $5 per $1,000 of coverage for parts of California. The average earthquake premium for a State Farm residential insurance policyholder (insured in the CEA) is a little over $400. To add perspective to this problem, if coverage were to be provided on the same terms as standard homeowners coverage ($500 deductible, full replacement coverage on the home, higher personal effects coverage, etc.) premiums would have to be several times greater than those charged by the CEA. The other side of this issue is the fact that not very many homeowners are willing to pay premiums that high for a contingency that is not very likely to happen to them.

 

What is the best vehicle for arranging the funding of earthquake losses?

 

Government Programs

If government assumes the responsibility for the cost of seismic damage to residential property as a form of disaster relief the funding question is pretty simple. General revenues, including the government's ability to borrow or print money, will fund the losses through taxes paid by the population as a whole. To a limited extent that is done today.

Another government approach is government insurance. A model of that approach can be found in the National Flood Insurance Program. The distinction is that those receiving the benefit of the insurance coverage, owners of property in areas susceptible to flooding who purchase flood insurance, pay the bulk of the costs of that coverage. Common problems with government programs include the difficulty in maintaining cost based pricing and enforcement of qualifying rules such as zoning and building code requirements.

 

Private Insurance Programs

Private earthquake insurance is available in most areas of the country. In California a substantial portion of residential earthquake insurance is provided by the California Earthquake Authority, which operates to an extent like a private insurer. Private earthquake insurance is potentially a reasonable way of funding residential earthquake losses. It will ultimately do the best at producing risk based pricing which in turn internalizes the costs of the earthquake risk to the property owner and by extension to other stake holders such as architects, builders, developers, and lenders.

One problem that private insurance programs present is the need to attract and reward sufficient capital to fund a rare but extreme event. Any private insurer writing earthquake insurance must have the capital on hand to pay a total loss the day it writes its first policy. That may represent a lot of money. If, for example, the 1 in 250 year event takes place in year one the insurer could have to pay out 250 times collected premiums. Of course, for most insurers that risk is diversified by other risks assumed in other areas that are not correlated with the assumed earthquake risk. Most insurers also use reinsurance coverage to further diversify their catastrophe risk. The creation of the CEA is evidence of the shortfall between the amount of insurance capital available to underwrite California earthquake risk and the amount of coverage needed.

This disconnect between the amount of potential damage from earthquakes in California and the amount of insurance capital available for this purpose also makes more widespread coverage a problem. If, for example, every homeowner in California opted to purchase earthquake insurance the insured exposures would greatly exceed the amount of capital available in the private earthquake insurance system.

In any event, the cost of assuming that risk includes both the average annual cost of long term expected losses - in addition to the severe but infrequent event the long term cost includes more frequent minor events - and a risk provision which rewards investors for accepting the volatility inherent in this kind of risk transfer. In areas that represent a high likelihood of a mega event the risk component can be substantial.

The CEA, as a state legislated entity, addresses this issue by capping losses at the level of available capital and funding losses within that limit by a variety of methods most of which do not pay a risk reward to the providers of that capital.

Finally, there is still legislation active in the US Congress addressing this issue which could help resolve some of these public policy questions.

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Financing Catastrope Risk and the Role of Government

Franklin W. Nutter

Reinsurance Association of America

Following the unanticipated insured losses from Hurricane Iniki and Andrew in 1992 and the Northridge earthquake in 1994, property catastrophe exposure in the United States has been well documented. Prior to those events, the industry had either underestimated the potential insured losses from natural catastrophes or chosen to underestimate the probabilities that they might occur. In the last few years however the industry's own loss estimation models, in consultation with those of knowledgeable consultants and scientists, have made it abundantly clear that the industry cannot go forward financing "cats" on the same cavalier basis as it did in the 1960s, 1970s and 1980s.

 

How, then, should the financing of catastrophe risk proceed?

Among the most notable responses to this question has been the emergence of advocates for a role for the state or federal government in addressing property catastrophe insurance availability and affordability. Prior to 1992, the only government programs addressing catastrophe exposures were at the federal level. The National Flood Insurance Program, adopted in 1968, provides residential flood insurance coverage to consumers. The private insurance sector offers commercial flood coverage. In addition, the Federal Crop Insurance Program provides agricultural producers with coverage for crop losses from natural hazards.

Other than these two programs, neither the state nor federal governments offered insurance to consumers. Beginning in 1992, three states -- Hawaii, Florida and California -- began the consideration and subsequent adoption of state sponsored risk bearing programs to address catastrophe insurance problems. To date, these programs remain untested by a major natural catastrophe and represent an experiment as the states seek to assist consumers with problems in insurance markets.

Each state has taken a different approach. The Hawaii Insurance Fund is a program underwritten entirely by the State providing consumers with insurance against hurricanes. It is financed by several assessment mechanisms, including assessments on policyholders, insurers, and taxpayers.

The State of Florida, however, took a dramatically different approach. Even in the face of arguments by some in the insurance industry that hurricanes were an uninsurable risk that only government should underwrite, the Florida legislature opted to create a catastrophe reinsurance mechanism that relies upon the state's authority to issue bonds and accumulate reinsurance premiums paid by insurers.

In 1996, the State of California adopted a third approach, a creative private-public partnership, the California Earthquake Authority, which provides insurance to consumers, but whose financing consists of various layers, including accumulated premiums from policyholders, private reinsurance, state bonds and a "capital market" layer that has actually been financed through traditional reinsurance.

The establishment of each of these three state programs has occurred concurrent with a debate at the national level of what role, if any, the federal government might play in financing catastrophe insurance. After several years of debate, no consensus within the industry or within the Congress has emerged.

Other states have debated the issue of the role of the state in providing catastrophe insurance or reinsurance, but no other state has yet concluded that it has an appropriate role similar to Hawaii, Florida or California. The establishment of these state catastrophe funds has illuminated sharp points of debate about their need and their financial viability. Fundamental to debate about the role of government is the core question of whether earthquakes and hurricanes are insurable perils. A few insurers have argued that these perils do not meet the criteria for insurable risk. Reinsurers and most primary companies believe earthquakes and hurricanes to be insurable perils and therefore government programs -- state or federal -- which preempt the private market at either the insurance or reinsurance level are unnecessary and, in fact, may be counterproductive.

A government reinsurance program, state or federal, that operates at levels which are competitive with private reinsurance and not excess of available capacity appear to be inimical to existing private capacity and a deterrent to the further development of new capital and reinsurance markets that have emerged. Moreover, government programs that insure consumers directly result in "winners" -- those insurers seeking to rid themselves of catastrophe insurance risk -- and "losers" -- insurers who must contribute to the assessment base for the state funds, even where they disagree with their need. More importantly, state primary programs operate to squeeze out those primary insurers which want to offer this coverage to their policyholders, but cannot or may be unable to match government insurance coverage or price.

Government catastrophe insurance programs are misleading if consumers expect lower rates in areas at risk to natural catastrophes for the same coverage that existed prior to the adoption of the state program. Indeed, the California Earthquake Authority is premised upon reduced insurance coverage at rates that, for most consumers, are higher than previously charged. The reality is that the financial viability of state funds is contingent upon actuarially sound rates and, in all likelihood, limited policy coverage.

The debate over the role of government has also focused on differences among insurers regarding the management of their own catastrophe exposure. Generally, those companies which have "reengineered" their catastrophe exposure through use of reinsurance, other financial techniques, and a re-examination of their exposure, see little need for state intervention in the insurance or reinsurance markets.

Some proposals exist for regional catastrophe funds operated among various states, rather than individual state funds. The concept has not been adopted among the states for several reasons. The most prominent is that catastrophe risk varies so dramatically among the states; thus designing a multi-state pool that is equitable for all participating states becomes problematic. For example, Florida alone has two-thirds of the average annual expected loss in the United States from hurricanes. California has slightly more than two-thirds of the annual expected earthquake loss for residential coverages. Thus, states are faced with the potential of subsidizing high risk states through the creation of their own state funds (which do not now exist), as well as through reliance upon state bonds to help finance their participation. A regional fund would also likely have the effect of standardizing the approach to catastrophes in the states, thus limiting the traditional role of the states as laboratories to tailor approaches to state needs.

The separate approaches Hawaii, Florida and California have taken in the creation of state funds remain creative ways to address local market problems, but are recognized by all as untested until it can be determined that sufficient premiums from policyholders are flowing into the programs to sustain their financial viability. It also remains to be seen whether either state catastrophe reinsurance funds or, for that matter, state insurance funds, improve insurance availability. The public's response to coverage from the California Earthquake Authority will be the first major test of the public's reception of a state fund.

These reservations are not to suggest that government does not play a critical role in addressing catastrophe risk. Indeed the states have several preferred alternatives to stabilizing insurance markets, enhancing the threat to solvency that major catastrophes bring and improving consumer insurance markets. Most notable among state actions -- and one that would have the most immediate response -- is for the state to allow a competitive insurance market to use sound actuarial estimates of the catastrophe risk. Inadequate insurance rates can make a risk that is insurable, uninsurable. Inadequate rates used by insurers or state funds, for insurance or reinsurance, threaten the viability of the underwriting entity. The use of sound catastrophe models and a better understanding among consumers of catastrophe risk and probable costs should be viewed as a productive catalyst for a viable insurance market.

Secondly, states can allow more flexibility over insurance policies by allowing insurers and therefore consumers to respond to various coverage options, including various deductibles, changes in coverage terms and co-payments. The opportunity to offer coverage options will likely attract insurers into markets that are currently experiencing problems and allow consumers choices commensurate with their financial resources.

There is clear evidence in the United States that adequate rates and coverage flexibility will encourage national insurers with limited exposure in high risk areas to reenter those markets and permit small and medium-sized insurers to expand in these markets. Even insurers with significant market shares in high risk areas would benefit from a more competitive, more diverse insurance marketplace. For consumers, the choice of carriers and the choice of coverages can prove to be a powerfully beneficial development.

Lastly, insurers and the state should work to improve mitigation. Through the Institute for Business and Home Safety and the Insurance Services Office, U.S. insurers are placing great emphasis upon a rating system that evaluates building codes and building code enforcement in the United States. Insurers are also evaluating incentives that can be provided to those policyholders who undertake loss mitigation for their properties.

Finally, most in the industry believe that a true mega-catastrophe is beyond the insurance industry's capacity to finance and remain financially viable. It is strongly believed that the federal government should provide a catastrophe program that operates well above the private capacity of the insurance and reinsurance markets and also leaves room for creative capital market products that are currently under development and exploration.

The U.S. situation is unique. It faces extraordinary exposure to natural catastrophes, yet, has the benefit of a financially healthy insurance industry (industry surplus at year-end 1997 was $310 billion), the resources of financial markets that supplement insurance industry capacity, and has the financial support of financial institutions from other countries who see market opportunities in the U. S. For insurers in the United States, government clearly has a role; but it is debatable at this point whether state insurance programs are financially viable, and whether they are productive or counterproductive in assisting or stimulating insurance markets. Government can do more to address the catastrophe problem through more free market approaches to rates, policy forms and incentives for hazard mitigation and for a federal program that provides a financial backstop to insurers for a mega-catastrophe.

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The Role of the Insurance Industry in Earthquake Mitigation

by Susan Bithell

Farmers Insurance Group

The insurance industry serves the public good by transferring financial risk from losses due to insured causes of loss. For several decades the industry has expanded coverages to meet the growing needs of its consumers. One such coverage that evolved is earthquake insurance, which is sold as an elective coverage generally on a property policy like homeowners insurance. Insurers’ desire to create a competitive advantage resulted in a comprehensive earthquake contract, sold at a rate below its relative level of risk, and with low deductibles. Since events were infrequent, many insurers tended to passively manage this exposure. Primary insurers generally handled catastrophe risk via the purchase of reinsurance.

As a result of this strategy consumers saw the opportunity to transfer a substantial portion of their earthquake risk easily and affordably to an insurer. This ease of transferability has contributed to a public sense of indifference towards proactively mitigating earthquake exposure. The consumer envisioned that their role in earthquake mitigation was limited to the amount of their deductible. This ease of purchase also fostered an attitude that insurers had adequate capital to cover their exposure.

While periodically tested, this philosophy endured until reality struck on the morning of January 17, 1994, in Northridge, California. Insurers, governmental agencies, and consumers learned first hand that earthquakes pose a unique threat and that protecting against the financial and human consequences of these events needed rethinking. The magnitude of total insured losses experienced, approximately $12.5 billion, in this earthquake brought insurers face-to-face with the solvency threatening nature of earthquakes. The sudden, extreme losses interrupted cash flows and consumed capital. Losses exceeded premiums collected over past decades. Because of the seriousness of the losses and the need to protect policyholders’ interests, many insurers undertook swift action to control their earthquake exposure. Common actions included market restrictions, stricter underwriting rules, and higher deductibles.

Compounding the impact of the Northridge earthquake was the status of the reinsurance market. Prior to Northridge, reinsurers and primary insurers faced staggering catastrophe losses. The frequency and severity of catastrophic events such as Loma Prieta earthquake and Hurricanes Andrew, Opal, and Iniki drained financial resources, resulting in high reinsurance prices and restricted availability. Losses sustained from the Northridge earthquake added to the capital strains on both reinsurers and primary insurers, dampening their appetite to increase catastrophe exposure. Consumers saw the result of this tightening capital situation in the form of availability of earthquake and/or homeowners coverage. For example in California, prior to the implementation of the California Earthquake Authority, several insurers ceased writing new homeowners policies to avoid increasing earthquake exposure. In California an insurer is mandated to offer earthquake coverage on every homeowners, condominium, and renters policy. Outside of California, some carriers still use market restrictions in high-risk areas to control their exposure. While market restrictions reduce exposure, they invoke a high price in the form of market disruption to stakeholders such as consumers, agents, and the company.

In addition, deductible amounts have increased over the last four years. With the exception of California, private insurers in the western United States have shifted from a common 2% deductible to a 10% deductible. The result of this action is that the insured now retains a higher stake in an earthquake loss. For example an insured with a $150,000 home now faces a deductible of $15,000 instead of $3,000. With this change, the insured now has more incentive to mitigate potential losses, especially damage from smaller events.

Contract modifications represent another exposure management tool used. Claims results showed a substantial portion of losses stemmed from loss of use, personal property, and detached structure coverages. With limited capital available to support this line of coverage, some providers adopted a basic earthquake endorsement designed to provide primary coverage for the dwelling and limited coverage for such items as personal property, additional living expense, and detached structures. The most prominent user of this tool is the California Earthquake Authority. As a result of this change the insured’s role in a loss has increased.

Another significant impact of the recent catastrophic events is the industry’s desire to gain a better understanding of the exposure to earthquakes. This desire is fueled by company management and rating agencies. Management’s desire stems from a need to manage exposure and purchase reinsurance. Rating agencies require insurers to submit their modeled exposure to assess their ability to withstand a catastrophe. As a result modeling has become more sophisticated, providing insurers an enhanced understanding of their exposure and the ability to expand their catastrophic risk.

Today several issues pertaining to earthquake insurance persist. First, outside of California, rates remain inadequate to cover the exposure and reinsurance costs. While some rates have increased, most notably in California, other high-risk regions have not seen substantial market rate adjustments. In pricing earthquake reinsurance recently, we found reinsurers wanted four times our loss costs, a price significantly higher than the market will bear. The current market pricing structure does not provide incentives to consumers to actively mitigate their losses.

Second, earthquake policyholders are bearing more of the risk via higher deductibles and coverage modifications. In the event of an earthquake, consumers could incur significant losses. While insurance provides indemnity, it will not cover the full extent of the loss. Policyholders have become conditioned to deductibles associated with auto and homeowners policies, which generally range from $100 - $500. However, the increased earthquake deductible of 10% - 15% may cause financial hardship, especially compounded with the impact of a disaster. A potential solution to this dilemma is access to loans. Such loans could be government backed through financial institutions such as banks and savings and loans.

Third, more proactive mitigation policies need to be enacted to reduce total losses resulting from earthquakes. Significant strides have been made to minimize loss of life in an earthquake; the next step encompasses reducing property loss. Under current conditions three parties share the total losses resulting from earthquakes: insurers, individuals, and government. Increasing mitigation efforts will serve to reduce total losses and each party’s share of the loss. Such mitigation strategies could include a public awareness campaign about earthquake safety and the benefits of loss prevention measures such as retrofitting. In addition, incentives from government and insurers in the form of tax benefits and premium discounts could motivate individuals to mitigate losses. Also an area that can help reduce losses involves enhancing building codes and enforcement of those building codes. Finally, a public awareness campaign needs to be undertaken to promote mitigation and its benefits.

In conclusion, insurance should continue to play a role in financial protection against earthquakes as an elective coverage. However, the rate structure needs to be more adequate for the given level of exposure. In addition, creative ways to provide policyholders access to financial resources such as loans after an event need to be explored. Finally, industry, governmental, and consumer resources need to target total loss reduction. As the saying goes "an ounce of prevention is worth a pound of cure."

The views expressed in this article do not necessarily
reflect the views of Farmers Insurance Group

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Mitigating the Risk: Engineers and Builders

by Janiele Maffei

Degenkolb Engineers

 

A successful earthquake risk mitigation program will require the combined efforts of the engineering, construction and insurance professions as well as federal and local governments. The Loma Prieta, Northridge and Kobe earthquakes were just a preview of the risks to life and property that exist for major metropolitan centers around the world. To dramatically reduce this risk, the value of a building in a seismically active region must reflect the earthquake resistance capability of its structure. Additionally, incentives must be introduced to encourage building owners to implement earthquake risk mitigation programs.

Engineers have numerous tools to assist building owners in the mitigation of earthquake hazards. One of these tools is the utilization of performance based design for both new construction and the retrofit of existing buildings. Performance based engineering provides the building owner with the tools to make choices about the expected earthquake performance of their building. One of many surprises to the public following the Loma Prieta and Northridge earthquakes was that the intent of the Uniform Building Code is to afford occupants of buildings with life-safety during a significant earthquake. The intent of the code for most building types is not damage control. Performance based engineering steps beyond the code and allows building owners to consider a life-safety, operational, or fully operational earthquake performance level for their building.

Another important tool in the field of earthquake mitigation is the PML (probable maximum loss) evaluation. A PML allows the insurance and lending industries to quantify the earthquake resistance capacity of structures. However, in order for the PML to become the industry standard for rating buildings, the engineering profession must establish consensus guidelines. There are currently no accepted guidelines for the calculation of PML’s for the insurance and lending industries to use as standards.

The construction industry plays an essential part in a successful earthquake mitigation program. While builders have a very good understanding of the vertical, or gravity, loads experienced by buildings, they have limited understanding of the lateral loads imposed on buildings by earthquakes. For earthquake risk mitigation to be successful, the construction industry must improve educational programs for the trades with regards to the impact of construction quality on the earthquake resistance of structures.

The insurance industry has the potential for having the most dramatic effect on earthquake risk mitigation by the introduction of mitigation incentives. If insurance policies require an evaluation of the expected seismic performance of the structure, insurance premiums will reflect the expected seismic risk posed by the structure. The result would be a strong incentive for mitigation by building owners.

Other incentive policies include tax benefits for buildings that have been evaluated and rated as having high performance level structures. Other policies could include the reduction of building permit fees and availability of low interest loans for the retrofitting of buildings. Building permit cost reductions for the implementation of retrofitting are currently implemented in the city of Berkeley, California. These incentives would be more appealing if the availability of federal and state post-disaster funding was reduced or eliminated. Relief funds could be shifted to funding for the establishment of PML guidelines, low interest loans for retrofitting, construction quality education and construction inspection.

History has shown that earthquake risk mitigation will not happen without incentives or mandates. As an example, the Hospital Safety Act was passed in California in the early 1970’s. The intent of the bill was to ensure that the essential hospital services would be available following a major earthquake. Consequently, new hospital buildings were constructed under the strict requirements of the act. The recent implementation of Senate Bill (SB)1953, however, indicates that the majority of hospital buildings in use in California were constructed prior to the Hospital Safety Act and have not been retrofitted. The result is that many hospitals are not only incapable of providing essential emergency services following an earthquake, they place the occupants at great risk from falling hazards and possibly collapse. This dangerous situation exists in the general population of buildings as well. The building and insurance industries must work together with public policy makers to implement incentives that will expedite earthquake risk mitigation in high seismic regions.

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The Mitigation Demand Survey

by Steven Ganz

I propose that before any major new mitigation initiatives are undertaken, an governmental agency should conduct or contract a comprehensive survey. This survey would serve as a basis for priorities and levels of support. Given the scope of such a survey, it would be appropriate for the federal government to underwrite this activity.

The target populations of this study can be grouped into four categories — 1. Governments, 2. Private Companies, 3. Non-profits and 4. Individuals.

1. The survey should include all the state governments and a sampling of the numerous local governmental units. According to the United States Census Bureau more than 83,000 of these local governments exist in five categories. These include counties (including boroughs and parishes); municipalities (including cities, towns and villages); townships (areas outside incorporated municipalities); school districts; and special districts (including fire protection, water or sewer service, toll road and parks).

2. A sampling of various types of private companies must be targeted. This includes companies on the Fortune 500 (both publicly and privately held), and companies of Inc. 500 (small businesses), companies in key industrial sectors such as utilities, lifelines, construction and real estate development.

3. The non-profit organizations that should be included are those that have a direct role in the reduction of the effects of earthquake hazards and those involved in providing social services and maintaining buildings or domiciles. The first group includes organizations such as the American Red Cross, the regional multistate earthquake consortia, and the members of the Earthquake Information Providers’ Group (EqIP). Although these groups do not operate facilities per se, they do offer many programs to encourage mitigation be enhanced or replicated. The other group of non-profits should include organizations such as Catholic Charities, the Salvation Army, local homeless groups, and other community-based organizations that operate in large facilities and serve hundreds of people a day. The protection of these facilities is critical not only for the individuals who are in them on a day to day basis, but for the role they play in post-disaster activities.

4. The survey should include a broad cross-section of individuals. Understanding the behavior and motivation of individuals is essential before any incentive programs are put into place.

A survey of these groups and individuals must include what structural and non-structural mitigation efforts they have undertaken in the past, what efforts they are undertaking currently and what efforts they are planning to undertake in the future. The survey should offer the opportunity to obtain the details of these projects, including the costs and any measures of success. Since many forms of mitigation are not broadly known, it is also important to ascertain the willingness of these organizations and individuals to undertake future mitigation efforts that are not currently planned. This section of the survey would include the role of government subsidies in their decision-making process.

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WSSPC Board Corner

As the Board of Directors prepares for the WSSPC Annual Conference it is keeping its plate full. At its last meeting, the Board created two new policy committees - the Ad-Hoc Committees for Public Policy Regarding Economic Impacts of Earthquake Disasters and for Engineering, Construction and Building Codes. These committees will both review and initiate policy recommendations in their respective issue areas. Full details and membership for these committees will be described in the next issue of EQ.

The Board also made some changes to the WSSPC Affiliate Members’ Program. The most significant change has been to addthe two new categories of "Local Government/ Department of Local Government" and "University/Department of University". It is our hope that by creating these two new categories we can broaden the multidisciplinary involvement in our policy making.

 

Changes at WSSPC - The Board welcomes its newest member, Donald A. Hull, who was approved during the last meeting to assume one of the three geoscience seats. Dr. Hull serves as the State Geologist from the Oregon Department of Geology and Mineral Industries.

We would also like to welcome Gary Brown as the new Earthquake Program Manager for the Alaska Division of Emergency Services. We are sure the Mr. Brown will be an excellent addition to the staff in Alaska and a representative to WSSPC. On the same note, we would like to offer a fond farewell to Gary Mike Webb. Mr. Webb has been a valuable asset to his state and as a WSSPC state director for many years. We send him our best wishes for his retirement and hope that he will visit us at the WSSPC Annual Conferences in the future.

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