Insurance Regulators Vote to Weaken Climate Disclosure Rules
Just over a year ago, we noted the surprising, unanimous decision by the National Association of Insurance Commissioners (NAIC) to adopt rules requiring insurers to publicly disclose the impacts of climate change on their business decisions, to begin May 1, 2010. Well, not so fast. As Climate Wire reported, at Sunday's NAIC meeting, a the commissioners voted 27-22 to make the disclosure rules optional for states to adopt, submissions to be voluntary, and insurers' survey answers to be kept confidential.
The revised questionnaire adopted by NAIC includes the same 8 questions that were endorsed at last year's meeting, but notes that submission of the survey is at each state's discretion and that insurers' responses will be considered confidential. Instead of publishing all responses, as originally envisioned, participating states will work with NAIC to develop a public report which will give information about insurers' responses in the aggregate.
Now that the states may have different requirements, NAIC set out rules for what happens when an insurer serves multiple states with different disclosure rules -- the surveys are intended to be submitted to the regulator of the insurer group's lead state (i.e. the one with the largest direct written premium). Such a rule could make disclosure particularly interesting if California goes ahead with its own set of proposed rules and mandatory disclosures, as California controls a large segment of the insurance industry.
NAIC's seemingly abrupt policy change comes on the heels of the SEC's interpretive release requiring companies to disclose climate change risks when appropriate, which might have created some overlap with mandatory insurer disclosures. Per the NAIC Task Force's January minutes, it seems like the commissioners may have decided to let the SEC regulate instead.
Another interesting update is the revised questionnaire's disclaimer denying that the survey expresses an opinion on the existence or absence of climate change. Was the disclaimer motivated in part by the National Association of Mutual Insurance Companies' comments to NAIC about the "questionable integrity" of contemporary climate science in the wake of the release of emails from the University of East Anglia's Climate Research Unit?
