CALIFORNIA INSURANCE REGULATOR SHOULD PROTECT HOUSEHOLDS BY REDUCING LONG-TERM RISKS IN PROPERTY INSURANCE MARKETS

The following information was released by Public Citizen:

Eleven groups today called on the California Department of Insurance (CDI) to strengthen its long-term solvency planning proposed regulation to require insurers to meaningfully address climate-related risks and protect households and communities from insurance market destabilization. In June, CDI published a proposed regulation that would require large domestic insurers in California to assess and mitigate long-term risks to their solvency from climate change, technological innovation, and other emerging risks.

The comment letter calls on CDI to strengthen the proposed regulation by:

Limiting insurer discretion in assessing risk materiality;

Mandating insurers set long-term strategy targets across their underwriting, investments, and operations;

Establishing long-term target setting metrics; and

Requiring insurers to consider alternatives to withdrawing from communities when mitigating physical risk.

"CDI must do more than protect the bottom line of insurers," said Elyse Schupak, climate policy advocate for Public Citizen. "As climate impacts financially imperil households and communities, CDI should prioritize keeping property insurance affordable and available across California. The long-term solvency planning proposal should be strengthened to ensure it not only protects insurers from climate-related and other emerging risks but keeps insurance markets as a whole viable and prevents insurers from passing these risks through to policyholders as excessive rate increases or by withdrawing from communities."

"As climate costs continue to rise, insurance companies have sustained huge profits nationwide through withdrawals and claims denials, practices that leave the public less protected and make it hard for households to make ends meet," said Alex Martin, climate finance policy director at Americans for Financial Reform Education Fund. "To preserve affordable access to property insurance in the long-term, CDI should require insurance companies to set targets to lower their greenhouse gas emissions and contribute to climate adaptation."