On March 12, 2021, the Connecticut Committee on Insurance and Real Estate introduced S.B. No. 1047, An Act Concerning Insurance And Climate Change. The stated purpose of the bill is to require (1) the Insurance Commissioner to (A) develop and implement criteria for each insurer doing business in this state to annually submit a report to the commissioner concerning climate risk, and (B) annually submit a report to the joint standing committee of the General Assembly having cognizance of matters relating to insurance; and (2) each insurer doing business in this state to annually submit a report to the commissioner concerning climate risk. This bill would impose new reporting requirements on all insurers doing business in Connecticut regarding the insurer’s investments in fossil fuels, the degree in which the insurer’s investments are exposed to climate risk and the insurer’s gross premium underwriting for insureds involved in the fossil fuel industry and related industries.
During the March 18, 2021 public hearing a number of parties provided testimony including the American Property Casualty Insurance Association (APCIA), the Insurance Association of Connecticut and the National Association of Mutual Insurance Companies (NAMIC). While each of the insurance associations opposed the bill, environmental groups applauded Connecticut’s initiative. Below are some testimony highlights from the public hearing.
“The specific disclosures in this bill may be overly burdensome for some companies. The commissioner already has the authority, and does require, confidential reporting that reflects the material risks of each of company and how they are managing them. In fact, rather than helping regulators and insurers continue on our mutual journey to better manage and reduce climate risk, this bill could have the unintended result of wasting company and regulatory resources that would be much better used to actually address climate risk through mitigation and other proactive steps, including how to strengthen building codes and otherwise make the state more resilient and sustainable.” APCIA
Connecticut has long been a leader in the effort to address climate change, passing one of the first laws in the nation to reduce greenhouse gas emissions, the Global Warming Solutions Act. But while our state has taken action to address climate change, our flagship insurance industry has largely not taken action. It continues to play an outsized role in climate-destroying fossil fuel production by providing insurance to and by investing assets in fossil fuel companies. In 2020, Sierra Club Connecticut joined with other organizations to release a report “Connecticut Insurers: Ensuring the Climate Crisis” that shows insurers operating in Connecticut are some of the biggest investors in fossil fuels with over $220 billion invested in fossil fuel companies. Underwriting figures are unknown.” Sierra Club
“NAMIC agrees that climate change could well have insurance implications, but NAMIC does not support using the insurance industry as a lever to pursue a particular point of view as it relates to climate change. Given the number of other state-regulated industries, NAMIC also questions why the insurance industry is singled-out in this bill.” NAMIC
“As the unofficial “insurance capitol of the world,” Connecticut is uniquely positioned to take steps to establish transparency and reporting requirements related to the climate-risk of underwriting activities that place the environment, public health, and the economy at risk.” Save the Sound
We will continue to monitor this bill.