Federal Insurance Office urged to push climate risk disclosure
Federal and state regulators must push insurance companies to disclose more information on climate-related risk and their role in underwriting the fossil fuel industry, investors and advocates said in comment letters to the Treasury Department’s Federal Insurance Office.
Without such efforts, some investment advisers fear that regulators will lack the information needed to formulate and implement policies that would shield policyholders from skyrocketing claims due to extreme weather events exacerbated by climate change. They may also lack understanding of which market participants are making fossil fuel projects economically feasible amid the government and private sector’s push toward net-zero emissions.
“We have a difficult time assessing the proportion of premiums insurers receive from different sectors and therefore, we only have anecdotal data on what percent of insurers’ premiums come from the fossil fuel industry,” Leslie Samuelrich, president of Green Century Capital Management, said in a letter. “Nor do we have an insight into what types of fossil fuel operations and infrastructure these companies are insuring.”
Green Century Capital Management advises Green Century Funds, a sustainability mutual fund company based in Boston.
Established under the 2010 Dodd-frank financial overhaul, the FIO monitors the U.S. insurance industry. It identifies gaps in current regulations that could lead to a systemic crisis in the insurance sector or the overall financial system. It also examines whether insurance products are available and affordable for minorities and low-income communities.
The FIO does not adopt regulations, but the office collects data and analyzes information on the insurance sector, coordinates federal efforts and develops policy on prudential aspects of international insurance matters, including climate change.
The FIO asked stakeholders for comments on actions it should take to tackle climate change as part of its efforts to implement President
Joe Biden’s executive order in May directing federal agencies to develop “a whole-of-government approach” to mitigate climate risks to the U.S. financial system. The comment period for the request for information closed Monday.
In the letters, ESG investment advisers and progressive groups called on the FIO to work with states to gather information on insurance companies’ insured and financed emissions. This includes their underwriting premiums from and investment in fossil fuel companies and projects.
“FIO can use its convening and data collection authorities to encourage insurers to make and follow through on meaningful net zero commitments, including reductions to their financed and insured emissions,” Samuelrich said.
all ages)
Food & Clothes Pantry
Friday 10am-12pm