Insurance Commissioners Take Aim At Climate Change

DES MOINES, Iowa -- State insurance commissioners have added climate change to their agenda, which is already overflowing with hot-button issues that include life insurance illustrations and reserving requirements, among others.

The potential divide on climate change was evident during today's commissioner panel discussion at the Global Insurance Symposium.

"I just hope we don’t go down the road on a broader topic of trading one disaster for another," said Jon Godfread, North Dakota insurance commissioner. "If we don't have cheap, affordable, reliable electricity, you can look to Texas and see what happened there. You can look at other states, even during the heat wave. That's another catastrophe that we could have.

"You can't just flip the switch away from what we've been doing before to what's new," he added. "You can’t paint every state with the same brush."

North Dakota is an "energy development state," Godfread noted, and home to coal, oil and gas production.

The National Association of Insurance Commissioners created the Climate & Resiliency Executive Task Force in July 2020. The task force has started slowly and its mission is "to serve as the coordinating NAIC body for discussion and engagement on climate-related risk and resiliency issues, including dialogue among state insurance regulators, industry, and other stakeholders."

Big Florida Issue

Based on storm damage, climate change is likely felt more in Florida than any other state. Florida Insurance Commissioner David Altmaier is the current NAIC president and sat on today's panel. He suggested a myriad of ways to tackle climate change, from building codes to boosting general awareness.

But it is a growing issue that isn’t going away, Altmaier said.

“This is a risk. We are going to have more natural catastrophes for whatever reason,” he said. “Catastrophes are no longer going to be happening in the places we consider to be catastrophe prone, like Florida and some of my southeastern [states]. They’re happening everywhere.”

The NAIC climate change task force has met quarterly and, so far, has not proposed significant rules or regulations.

The NAIC Center for Insurance Policy and Research conducts an annual Insurer Climate Risk Disclosure Data Survey. CIPR’s most recent survey findings included:

• Few insurers report altering their investment strategy in response to considerations of the impact of climate change on its investment portfolio.
• More than half of all companies report at least some engagement in enterprise-wide climate risk management.
• A majority of insurers across every line of business reported similar levels of engagement with internal greenhouse gas management.
• Given a global push toward adopting the reporting guidelines proposed by the Financial Stability Board’s Task Force on Climate-related Financial Disclosures, opportunity exists to bring the survey into alignment with other climate risk disclosures and to improve the ability to analyze the survey’s results by adopting a multiple choice format.
• Reported engagement in climate-related activities has increased over the years that the survey has been collected.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.

© Entire contents copyright 2021 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.