Jones to Oil State AGs Threatening Lawsuit Against Climate Initiative – Bring It On

SACRAMENTO, Calif., July 27 -- The California Department of Insurance issued the following news release:

California Insurance Commissioner Dave Jones fired back, in a strongly worded letter, to the 12 oil state attorneys general and one governor from oil and coal states such as Texas and Oklahoma who recently threatened to sue him if he did not stop his Climate Risk Carbon Initiative asking insurers to voluntarily divest from thermal coal investments and requiring that insurers publicly disclose their investments in coal, oil, gas, and utilities, which face climate-related risks.

"I am not deterred by threats of lawsuits from attorneys general of 12 oil and coal states who find it politically popular to deny the reality of climate change," said Insurance Commissioner Dave Jones. "We will continue our Climate Risk Carbon Initiative--it is a sound regulatory effort based on considerable evidence of climate-related financial risks to fossil fuel investments."

As the regulator of the nation's largest insurance market, one of Commissioner Jones' primary responsibilities includes making sure insurance companies are financially sound and able to deliver on their promises to pay policyholder claims. That responsibility, coupled with the volatility of carbon-based investments, in particular coal, has led him to request insurers to publicly disclose investments that are at risk of becoming "stranded assets" as governments may increasingly restrict the use of fossil fuels, and consumers and businesses potentially move away from relying on fossil fuels.

Jones is not the only financial regulator with concerns about climate related financial risks, although he is one of the first to require public disclosure of fossil fuel invests and to ask insurers to voluntarily divest. The G-20 Financial Stability Board, the Prudential Regulatory Authority of the Bank of England, insurance regulators across the globe, institutional and private investors, and many others, have called for disclosure by insurers of climate-related risks. Just this week, the Sustainable Insurance Forum issued a statement from international insurance regulators announcing support the Financial Stability Board's climate disclosure recommendations.