19 March 2009 | Luca Del Buono

 

For the first time insurers must disclose climate change risks to investors and regulators beginning in 2010.

The National Association of Insurance Commissioners (NAIC) voted Tuesday to require the annual filing of Insurer Climate Risk Disclosure Surveys for insurance companies with annual premiums topping $500 million.

The new rule, set to begin May 1, 2010, is the world's first climate risk disclosure requirement, according to Ceres, the investor advocacy nonprofit that worked with NAIC over the past two years to develop the disclosure framework. Ceres President Mindy Lubber called Tuesday's vote a "wake-up call" about the climate change-related challenges faced by an insurance industry whose worldwide managed assets exceed $16 trillion.

"The fact that the regulators responsible for overseeing the solvency of the world's largest industry have taken the significant step of requiring climate risk disclosure should send a clear signal to policymakers in Washington that the time to deal with climate change is now," Lubber said in a statement.

The move will help regulators assess the solvency of their states' insurance companies and their exposure to risk from extreme weather events linked to climate change, such as wildfires, drought or flooding. They must also report: changes in risk management and catastrophic modeling to account for climate change; how they're engaging customers and policymakers on the issue; and whether climate change risks are impacting their investment strategies.

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Source: Greenbiz

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