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NAIC Insurer Climate Risk Disclosure Survey Resource Center

For more than two years, NAMIC has been fighting an effort by the National Association of Insurance Commissioner to use insurance regulation is an instrument of anti-global warming policy. At this resource center, we'll provide the latest updates related to this issue.

Regulators Repudiate Forced Public Disclosure of Insurer ‘Climate Risk’

The grand finale of every NAIC national meeting is the Joint Executive Committee/Plenary session. It’s usually a dull affair in which the entire membership votes to adopt a series of well-vetted reports, guidelines, and amendments developed by the NAIC’s various committees. There is typically little discussion and rarely any debate. This time was different.

After the group worked its way through its formal agenda, South Carolina Commissioner Scott Richardson moved to adopt a revised version of the Insurer Climate Risk Disclosure Survey to replace the original version that had been unanimously adopted by the same group exactly one year ago. After a protracted and unusually acrimonious debate, the motion passed by a vote of 27-22.

The revised survey, which Richardson referred to as “version three,” was not included in the meeting materials made available to interested parties, nor was it included in the materials for last Thursday’s Climate Change and Global Warming Task Force meeting. The revised survey was apparently the product of a series of private conversations and meetings among regulators that had occurred over the course of several days, if not weeks, prior to the Denver meeting.

Whatever one thinks of the less than transparent process that led to this coup, the revised survey is a vast improvement over the original. While the questions from the original version remain intact, the new version’s application and instructions differ from the original in three very significant respects:

  • The revised survey carries a disclaimer stating that the survey questions “do not endorse, reject or otherwise express an opinion on the existence or absence of climate change” or on the science pertaining to climate change.
  • The revised survey states that the decision to administer the survey “is at the discretion of each state,” officially recognizing the prerogative of states not to participate.
  • The revised survey says that, with respect to those states that do choose to administer the survey, responses shall be confidential. Moreover, whereas previously the NAIC was to gather responses submitted by insurers throughout the country and post them on a public website -- with respondent companies identified by name -- the new version limits the NAIC to “giving information in the aggregate regarding insurer responses.” Presumably this means that NAIC staff will compile a synthesized summary of insurer responses to the questions. Companies will not be identified in any way.

Regulators from Illinois and Washington, as well as Ario of Pennsylvania, declared before and after the vote that they would administer the original mandatory survey and publicly disclose the responses, notwithstanding the plenary vote.

It remains to be seen which states will administer which version of the survey. Another question is whether one or more of the militantly pro-original survey states (e.g., Wisconsin, Washington, California, Florida, and Pennsylvania) will administer the original survey to domestic companies that are part of groups whose “lead regulator” administers the revised version of the survey, or declines to administer any version.

NAMIC will continue its effort to persuade individual states to exercise their discretion not to administer the survey, a task they should be made easier by the fact that 27 states voted to scrap the original survey in favor of a far more benign version.

Scrutiny from the Wall Street Journal

In the paper’s March 5 edition, weekly columnist Kimberley Strassel describes the machinations of a special NAIC task force on climate change and insurance. Strassel explains how the task force was commandeered by a small clique of crusading insurance commissioners and global warming activists, and examines their handiwork: a “climate risk disclosure survey” for insurance companies. She explains how the group planned to use the auspices of the NAIC to cajole state insurance departments into forcing insurance companies to publicly respond to the survey’s eight loaded questions. The clear objective of the survey, Strassel observes, is to pressure insurers into changing their underwriting practices and investment strategies to favor “green” initiatives and to disfavor industries and behaviors frowned on by activists.

Strassel notes that the maneuver now threatens to implode. Some regulators and governors, mindful of state sovereignty and perplexed by doubts about the validity of climate science, are resisting the proposal.. Strassel highlights NAMIC’s prominent role in mounting opposition to the survey, and quotes NAMIC President and CEO Chuck Chamness criticizing the scheme to press the insurance industry into service as an “environmental traffic cop.”

NAIC Insurer Climate Risk Disclosure Survey

The goal of the Insurer Climate Risk Disclosure Survey is to provide regulators, shareholders and the public with substantive information about the risks posed by climate change to insurers and the actions insurers are taking in response to their understanding of climate change risks. Disclosure of climate change risks is important because of the potential impact of climate change on insurer solvency and insurance availability and affordability across all major categories of insurance: property casualty, life and health. The Insurer Climate Risk Disclosure Survey contains a set of questions to help regulators assess insurers’ risk assessment and management efforts and follow up with questions as necessary, subject to applicable examination and confidentiality provisions. It will also provide additional information for consumers to incorporate into their purchasing decisions. The proposed disclosure builds upon existing climate risk disclosure mechanisms, but has an increased focus on issues related to insurer solvency and insurance availability and affordability. The objective is for initial disclosure by some insurers for Financial Reporting Year 2009. More...

News Coverage

The Climate Rules Weren't From Us (Wall Street Journal, March 13, 2010)

Opinion, POTOMAC WATCH By Kimberly Strassel
Carbon Caps Through the Backdoor (Wall Street Journal, March 5, 2010)

NAIC’s Climate Dogma Is Putting Insurers At Risk (National Underwriter, Jan. 25, 2010)

Insurance Group Says Stolen E-Mails Show Risk in Accepting Climate Science (The New York Times, Jan. 13, 2010)

NAMIC Rep Calls Regulators’ Costly Event Invite Questionable (National Underwriter, Sept. 16, 2009)

NAMIC Correspondence

Jan. 12, 2010, NAMIC Comment on Climate Risk Disclosure Survey Documents

Ceres Position

Regulators Require Insurers to Disclose Climate Change Risks and Strategies (CERES News Release, March 17, 2009)