NAIC to Insurance Companies: Report on Climate Change

December 19, 2008

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Insurance providers and the bodies that regulate them are trying to come to an agreement as to what kind of information would be required from them concerning climate change – and where it would be revealed, writes National Underwriter.

The original white paper, written by the National Association of Insurance Commissioners, said insurers should be asked about climate risk in their internal risk-assessment process – how they inform and provide incentives for policyholders to deal with climate risk, how insurer boards are informed on climate risk, and what steps carriers are taking to mitigate their own and policyholders’ climate risks.

Climate change can affect mortality and thus impact life insurers’ investments, regulators said. But the insurance companies, as represented by trade groups like the American Council of Life Insurers, the National Association of Mutual Insurance Companies, and the Property Casualty Insurers Association of America, disagreed. Requiring filings forces them to make statements and hazard guesses, which would invite lawsuits, they said.

A possible compromise is that the new survey (pdf) will not be part of the annual statement filing requirement, but rather a separate survey. The results would be then be reported to the regulator of the holding company’s state.

All eight questions in the survey, however, would be public, whereas previously just three of nine questions answered were public.

The new revisions were discussed on Dec. 17 on a conference call for the Climate Change and Global Warming Task Force, but the force said it will not take action on the proposal until after a comment period and the interim meeting/teleconference call of the Climate Risk Disclosure Working Group.

See a summary of a previous (Dec. 5) meeting.

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