A white paper examining the potential impact of climate change on the insurance industry has recently been approved by the National Association of Insurance Commissioners’ (“NAIC”) Climate Change and Global Warming Task Force (the “Task Force”).  The white paper is intended to begin a process of encouraging, or even requiring, insurers to address climate change risk in order to protect consumer and insurer solvency.   A copy of the white paper can be found by clicking here.

The Task Force approved the white paper with little opposition; however, it deferred the details of the study’s most controversial aspects, contained in the Climate Risk Disclosure Proposal (the “Proposal”), until the NAIC meeting in September.  The Proposal, which is widely criticized by insurers, contains a set of detailed interrogatories that would supplement insurers’ annual statements.  The interrogatories would ask insurers to report:  what actions they have taken to assess the impact of climate risk and global warming on their operations and the results of such assessments; whether there are geographic locations in which they have increased rates or limited sales because of climate change effects; and what steps they have taken to encourage policyholders to reduce the losses caused by climate change-influenced events.

The Task Force will be accepting written comments on the Proposal until June 30th.  We will continue to monitor these developments and provide updates at InsureReinsure.com.