TX Insurance Commissioner Defends Mold Decision

Strategies For Indoor Bioterrorism Likely To Come From Industry

OSHA Throws In The Towel On Proposed IAQ Rule

With a simple notice in the Federal Register, OSHA withdrew its Indoor Air Quality proposal and terminated the rulemaking proceedings to regulate indoor air quality in workplaces across the country. This action by Assistant Secretary of Labor John L. Henshaw, quietly closes the book on the agency’s most commented proposal– a story that made headlines everywhere beginning in March 1994.

The proposed rule addressed any and all indoor contaminants, but its most significant provision was that employers must ban smoking in the workplace or restrict it to specially-designed lounges exhausted directly to the outside.

In the years since the proposal was issued, many state and local governments and private employers have already taken action to curtail smoking in public areas and in workplaces. OSHA officials have said in the past that since the IAQ portion of the proposal not related to environmental tobacco smoke (ETS) received little attention during the rulemaking proceedings, and much of that consisted of commenters calling into question significant portions of the proposal, there was little reason for the agency to pursue the proposal through the arduous rulemaking process. In the Federal Register notice, OSHA officials stated that record evidence supporting the non-ETS portion of the proposal is sparse.

Withdrawal of this proposal will also allow OSHA to devote its resources to other projects. The agency's current regulatory priorities, as set forth in the Regulatory Agenda, include a number of important occupational safety and health standards. The notice on the IAQ proposal, according to the Federal Register, does not preclude any agency action that OSHA may find to be appropriate in the future.

Back In 1994...

Then OSHA chief Joseph Dear announced the proposed rule on IAQ March 25, 1994. The proposal would garner more than 100,000 comments during the first and only public review, and the OSHA held public hearings on the proposed rule for more than two months. Indeed, Tom Lauria of the now defunct Tobacco Institute stated that the industry would make “extensive” comments. Indeed, more than 90 percent of the comments concentrated on the smoking issues in the proposal and most of those were created through a nationwide campaign from the tobacco industry. At the time, the tobacco industry was already reeling from months of smoking bans and legislative threats. They maintained that OSHA could not restrict smoking without proof that ETS posed a significant health risk in the workplace.

On the IAQ side, many industry experts had predicted the rule would create a real stimulus for the environmental consulting market.

TX Insurance Commissioner Defends Mold Decision
By Willard Thomas

In his testimony on December 11 before the State of Texas, Jose Montemayor, Insurance Commissioner of the State of Texas, implied that indoor environmental specialists and mold remediators were at least partially responsible for the growth and effects of mold in Texas. He also implied that mold was not perceived as a problem in Texas until the middle of last year, and that insured policy holders are to be given the responsibility of paying for the costs of investigations, laboratories and mold remediation procedures. He emphasized that no other states had similar mold insurance coverage.

Montemayor agreed to reduce the coverage in all state homeowner policies and eliminate mold coverage without reduction in premiums. He allowed insurance companies to add a percentage increase mold endorsement to their policy for an additional premium to be determined by the insurance company. The coverage will be limited to sudden and accidental discharges of water, if reported within 30 days. He also eliminated the insurance company requirement to test to see if spores had spread contamination to other locations in the home from known sources or reservoirs.

Under the new plan, insurance companies would not be responsible for quality control and containment during remediation to protect uncontaminated areas of the house during repairs. Additionally, Montemayor eliminated the insurance company requirement to test the building after mold removal to ensure that conditions were back to normal.

During questioning from the committee, the Commissioner admitted that his decision might have an effect on the cost or availability of home mortgages, but that this was not in his area of authority. He was concerned that all the insurance companies would stop providing homeowner’s insurance in the state. Montemayor added that insurance companies usually lost money on homeowners’ policies in Texas, even though the rates are among the highest in the country.

Montemayor also stated that the state Attorney General was conducting a criminal investigation against a group of individuals who were making too much money by scaring people about mold, stacking multiple claims and then charging exorbitant fees for remediation. His intention is to educate the public, but he said he has only a very small budget to fund this or any investigative effort.

A representative of Farmer’s Insurance announced that the company would continue to write homeowners polices in Texas according to the new framework established by the recent commissioner decision.

Long Insurance History

Texas has a long history of differences with insurance companies and once required that insurance could only be written in the state by Texas owned companies. During the recent administration of Governor Anne Richards, a group called the Public Insurance Council was established to provide analysis of the claims of insurance companies for higher rates. A representative of the council, Teresa Hankins, testified following the insurance advocates that the companies had lost money in some years, but not all and that their claims about the “losses” caused by mold coverage could not be verified. Also, the amount of the losses attributed to natural disasters and poor weather in 2000 and 2001 was not isolated. Most insurance companies have moved their writing to Lloyds companies, which are not price regulated. It was recommended that these companies be brought under price regulation requirements.

The final witness in the public hearing was, Rob Schneider, a representative of the Consumers Union in Texas. He thought mold was definitely a problem because he and his staff could not use their office for about a month, due to the removal of mold from the building. He also urged the committee to heed the warnings and advice of consumers who had been impacted by mold, had done the research that the committee was told was lacking and to question the data from the insurance companies.

The committee members took a keen interest in the testimony of all four witnesses, and as their interim charge from the Speaker of the House, will begin trying to find methods for dealing with the problem. They asked for more information from the commissioner, and wanted research information that they could rely upon. They seemed to indicate a move toward the licensing of environmental and remediation specialists and the setting of standards for mold exposure.

The committee has a challenging task in doing the job of preparing legislative action and especially in allocation of funds for research and management of a viable program in the state. The committee members can see that the problem involves other individuals and organizations beside the insurance industry.

The committee seemed to be saying, through their questions and comments, that insurance companies are not the only ones to blame and should not be expected to pay for all the changes that will be needed in homeowner education, building codes, medical diagnosis, and environmentalist certification law. However, they seemed to recognize that mold is a problem and reasonable solutions to protect the public health need to be found.

A reasonable solution was found at the turn of the century with the introduction of electricity into buildings. When houses and buildings started burning down from faulty wiring and appliances, the solution was found in setting up the Underwriters Laboratory, and getting states to license electricians. “A similar approach is needed now,” said Gary Bryan, president of Airtech Environmental and Bio-Air Laboratory. “With the introduction of energy efficient building methods and air-conditioning systems, we have created a very different air quality environment in our homes and buildings,” he added. “This new environment is conducive to mold reproduction. We need state standards and licensing procedures for those in the air quality profession. When the state ensures that the air quality professionals are truly professionals, the problem of overcharging and over-repairing will go away.”

Bryan is chairman of a new political action committee of indoor air professionals, which has raised money from the members to hire a former speaker of the Texas House of Representatives to work toward a reasonable solution that does not use the “shoot-the-messenger” technique against the indoor air quality professionals.

Also, after the hearing, Melinda Ballard, president of United Policyholders of America, and the plaintiff who won the case for $32 million against Farmers Insurance, stated that the insurance companies should reduce their premiums by 70 percent.

“This is the amount of the premiums the companies now contend is going for mold claims, and they should be willing to reduce their premiums by the same amount when they drop mold coverage,” she explained.

Strategies For Indoor Bioterrorism Likely To Come From Industry
By Farzana Shakir

As concerns about Bioterrorism continue, government officials met in Washington, D.C., early last month to discuss the security of U.S. natural resources. The program was presented by the Environmental Foundation of the States and the National Environmental Policy Institute, a nonprofit, bipartisan organization of environmental leaders dedicated to the development of beneficial environmental policies. According to program organizers, the event would also address protection of the indoor environment.

The panel discussion was moderated by Massachusetts State Sen. Marc Pacheco, Chairman of the Joint Committee on Natural Resources and Illinois State Rep. Terry Parke, a member of the House Environmental & Energy Committee. They brought together different organizations focused on the issue of environmental protection. Mayor Pat McCrory, of Charlotte, N.C., chair of the Conference of Mayors Environmental Committee, began by outlining the risks, methods of communication and finances necessary to prevent further attacks by air or water from potential terrorists. He specifically mentioned the need to heighten security around water plants to prevent outbreaks of waterborne diseases and pesticide contaminants.

Judge Robert Eckels, chairman of the National Association of County Officials (NACO) and head of the NACO Taskforce on Homeland Security, explained the requirement of a single national strategy executed by state, local and federal government cooperation for emergency management. He emphasized the role of county fire, police and hazmat teams who are the first to respond in times of crisis.

U.S. Rep. Jane Harman, Ranking Minority Member, Subcommittee on Terrorism and Homeland Security stressed that “prevention (of environmental terrorism) is better than response. The key is organization.” She strongly supported the need for a fully funded national security plan that will apply resources to our U.S. vulnerabilities.

EPA Administrator Christie Todd Whitman ended the discussion with ways EPA works to protect the water infrastructure and the nation from potential biological attacks. Although the current role of EPA is strictly advisory, she commended the work and cooperation of water utility companies and incident managers at bioattack sites.

Despite the number of prominent regulatory authorities at the panel discussion, the speakers failed to discuss indoor air quality issues aside from alluding to the general concern of monitoring air. However, specific answers to the issues on indoor air quality are expected at the “National HVACR Security Summit” co-sponsored by the Air Conditioning Contractors of America (ACCA) and the Air Conditioning, Heating & Refrigeration News on Saturday, Jan. 26, 2002.

“HVACR contractors are confronting a whole new set of challenges, and dealing with questions from customers that demand answers,” said Lee Rosenberg, chairman of ACCA’s Environmental Systems Security Task Force. “At this summit we will bring together contractors, manufacturers, government officials, and academics to analyze the current situation, determine the extent of potential risks, and help contractors help their customers maintain safe and secure environments.”

Anticipated panelists include representatives from the Office of Homeland Defense, manufacturers, commercial contractors, as well as important legal and educational professionals. Topics for the national emergency summit include identifying and minimizing the potential risks of air handling systems and liabilities that could occur. The summit will illustrate ways for contractors of heating, ventilation, air conditioning and refrigeration (HVACR) systems to ensure protection from terrorist attacks. Panelists will discuss methods for contractors to improve their internal processes and assist them to help their customers keep safe environments. In addition, participants will be informed of technical improvements explored by HVAC manufacturers and the research community.

Information about the National HVACR Security Summit is available at the ACCA website, www.acca.org.