Insurers Released From Mandatory, Public Climate Change Risk Disclosures
Now, NAIC is going to a voluntary, confidential disclosure system, instead of the previously announced mandatory public disclosure.
Last year, NAIC voted to require companies to tell regulators about financial risks brought on by climate change, as well as to tell regulators what they are doing to respond to those risks.
The decision required any insurance company with premiums of more than $500 million annually to file an Insurer Climate Risk Disclosure Survey once a year. The initial reporting deadline was to have been May 1, 2010.
Now, the reporting system is voluntary on a national basis, but each state may choose institute mandatory reporting. NAIC is still suggesting that insurers complete the risk disclosures.
For states that do adopt mandatory reporting, NAIC is suggesting that any insurance company with 2010 premiums totaling more than $300 million should be prepared to disclose risks, whether in narrative form or otherwise.
NAIC’s decision last year came against a backdrop of a cataclysmic 2008, which for the insurance industry was the third most expensive year on record. The high rate of payouts was attributed to catastrophe damage, which insurers say is linked to climate change.
For a list of questions that insurers would answer, see the above image.
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