NAIC Documents Potential Impacts of Climate Change on Insurance Regulation

The National Association of Insurance Commissioners (“NAIC”) today, June 2, 2008, adopted a new white paper, “The Potential Impacts of Climate Change on Insurance Regulation.” This paper documents the potential insurance-related impacts of climate change on insurance consumers, insurers and insurance regulators.

To view a copy of the white paper, click here.

The NAIC press release is reprinted below.

 

Should you have any questions or comments, please do not hesitate to contact Colodny Fass.

 

Climate Change Study Focuses on Insurance Impact

SAN FRANCISCO (June 2, 2008) — The National Association of Insurance Commissioners (NAIC) today adopted a new white paper, The Potential Impacts of Climate Change on Insurance Regulation. It documents the potential insurance-related impacts of climate change on insurance consumers, insurers and insurance regulators.

“Nearly anything that is insured — property, crops and livestock, business operations or human life and health — is vulnerable to weather-related events,” said NAIC President and Kansas Insurance Commissioner Sandy Praeger. “State insurance regulators are aggressively moving forward to influence greater industry attention and action relative to climate change-related risk.”

The white paper thoroughly examines climate change and the corresponding issues faced by insurance regulators, including:

• Solvency Overview
• Property/Casualty Insurer and Regulatory Challenges
• Life Insurer Issues
• Health Insurer Issues
• Government Role

“Climate change is a complex issue — and this white paper merely serves as the beginning of a process, rather than the end,” Praeger said. “The growing consensus about climate change requires responsible business decisions to address the issue.”

Specifically, the white paper recommends that state insurance regulators develop standardized climate risk dislosures that answer the following questions:

• Are insurers adequately including climate risk, and climate risk changes, in their internal risk assessment process?
• Are insurers adequately informing and incentivizing policyholders as to their risks?
• Are the insurers’ governance structures sufficient to keep its board members informed about climate risk?
• Are insurers taking adequate steps to mitigate their own risks and to foster policyholder mitigation?

“The disclosure proposal is a minimum first step toward obtaining the information regulators need to determine the impact climate change will have on insurance consumers,” Praeger added.

Click HERE for more information about the NAIC Climate Change and Global Warming Task Force.

 

To unsubscribe from this newsletter, please send an e-mail to ccochran@cftlaw.com