Consumer Watchdog Issues Public Comment on Treasury Notice

WASHINGTON, Nov. 20 -- Carmen Balber, executive director at Consumer Watchdog, Los Angeles, California, has issued a public comment on the Department of the Treasury notice entitled "Federal Insurance Office Request for Information on the Insurance Sector and Climate-Related Financial Risks". The comment was written on Nov. 15, 2021, and posted on Nov. 16, 2021:

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Thank you for the opportunity to provide comments on the climate-related financial risks posed to, and by, the insurance industry.

By insuring the fossil fuel projects responsible for the increased intensity of wildfires, mudslides and flooding, insurance companies fuel the very disasters they are insuring against. Rather than drawing down their support of the fossil fuel industry, the insurance industry's response to increased risk from climate events has been to raise premiums for consumers and property owners, or to limit who they will sell to by refusing to insure whole ZIP Codes communities. That forces consumers to bear all of the cost of climate change while the insurance industry protects its outsized profits.

It is outrageous and unsustainable for survivors of wildfires and other disasters to have to fight with their insurance companies for claims payments, and for countless more to struggle to find affordable coverage, while insurers continue to cover the fossil fuel companies responsible for exacerbating climate change and causing those losses.

Consumer Watchdog has joined comments in response to this request for information submitted by Public Citizen on behalf of public interest organizations across the country. We submit this supplemental letter to stress the urgency of leadership by the Federal Insurance Office to expose the risks posed by the insurance industry's contribution to climate change by underwriting fossil fuel projects.

As our joint letter stresses: State and federal regulators aren't doing enough to oversee insurers' climate risks. Insurance companies, abetted by state regulators, refuse even requests for transparency about their underwriting exposure to fossil fuels.

In March 2019, Consumer Watchdog joined sixty environmental, consumer and social justice organizations in a petition to California Insurance Commissioner Ricardo Lara seeking first-in-the-nation emergency regulations to require insurance companies to disclose the fossil fuel projects they insure, even as climate change-exacerbated catastrophes are costing insurance companies billions.

California Insurance Commissioner Ricardo Lara has positioned himself as a climate champion, yet he rejected the petition, stating that he sought a more "collaborative" and "comprehensive" approach in an effort to "bring insurance companies into the fight against climate change."

In the two and a half years since Commissioner Lara denied the petition, the California Department of Insurance has held workshops, convened working groups, issued white papers, proposed legislation and produced countless press releases on climate change. Yet it has never once addressed how insurance companies contribute to climate change by insuring the fossil fuel industry.

Transparency is the first and most important weapon in a financial regulator's arsenal to help protect the financial solvency of insurers and the interests of consumers. States cannot meaningfully assess the climate risk borne by insurers without disclosure of these companies' fossil fuel underwriting. Yet the concrete financial threat of insurance companies' underwriting climate change has been swept under the rug in California and across the country.

National leadership is needed to highlight the critical role insurers have in causing their own catastrophe losses by contributing to climate change because the states have failed to act. The Federal Insurance Office must provide that national spotlight.

We enclose as background Consumer Watchdog's petition to the California Department of Insurance with 60+ public interest organizations for disclosure of fossil fuel underwriting, and the Insurance Commissioner's rejection.

View attachment at https://downloads.regulations.gov/TREAS-DO-2021-0014-0012/attachment_1.pdf

Sincerely,

Carmen Balber

Executive Director

Consumer Watchdog

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The notice can be viewed at https://www.regulations.gov/document/TREAS-DO-2021-0014-0001

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