A compromise may be near on a proposal by insurance regulators–one that's met stiff industry opposition–to have carriers assemble and disclose information related to the impact of climate change on their organizations, trade groups say.

Indeed, a new direction for filing such data could be established during a conference call of the Climate Change and Global Warming Task Force on Dec. 17, according to insurance organizations that attended the National Association of Insurance Commissioners meeting here.

Among the groups lobbying on the issue at the meeting were representatives of the National Association of Mutual Insurance Companies, the Property Casualty Insurers Association of America, and the American Council of Life Insurers.

The latest draft of the survey of climate change items was made public on Dec. 3. The document, after the Dec. 17 conference call, would move out of the task force chaired by Wisconsin Insurance Commissioner Sean Dilweg, and could possibly be voted on by the NAIC's Executive Committee by year's end, the insurer groups said.

In one major compromise, insurer representatives are pleased the new survey will not be part of the Annual Statement filing requirement, but rather would be collected in a separate survey.

Robert Detlefsen, NAMIC's vice president of public policy, said insurers will have to respond to eight questions and provide them to the regulator in the company's domiciliary state. If a company has a number of subsidiaries, the regulator of the holding company's state would receive the information, he noted.

(For a sample of the questions regulators will likely ask insurers, see the accompanying infographic.)

Insurers said requiring filings forcing them to make statements and hazard guesses would be an invitation for lawsuits.

Andrew Melnyk, ACLI's managing director of research, said that removal of the survey from the Annual Statement filing was a positive development. Other positives he cited include the fact that there is not a requirement for quantitative information, and that the document is forward looking.

One compromise insurers agreed to, he said, is that the eight questions insurers answer will be made public. Previously, insurers would have been required to answer nine questions–three of which would have been public.

Mr. Melnyk said ACLI had contended that climate change really did not affect life insurers, but noted regulators had countered that it could impact life insurer investments, and could affect mortality if there were extreme climate changes.

David Kodama, director of policy analysis for PCI, noted in a statement that the task force would not be taking action on the latest climate data proposal until after a comment period and the interim meeting/teleconference call of the Climate Risk Disclosure Working Group.

“Though PCI still questions the general regulatory relevance of such disclosure requirements, in terms of insurer solvency and consumer protection, we do acknowledge the positive revisions to the latest draft,” he said. “The proposed disclosure via a state-conducted survey–rather than through a supplement to the Annual Statement filing–addresses a critical element of PCI's adamant opposition to prior versions.”

Meanwhile, the NAIC last week adopted a conflict-of-interest policy for consumer representatives whose expenses to attend its meetings are funded by the regulator group.

The proposal was unanimously passed by the NAIC's Executive Committee and Plenary–and the possibility of taking further action on the issue is being left open, according to statements made during the discussion of the topic.

A policy statement on conflicts was developed by the Consumer Board of Trustees (CBOT), which includes NAIC-funded consumer representatives and regulators led by Wisconsin Commissioner Dilweg. The policy states that representatives who take compensation from a company or organization defined as “a regulated entity” may compromise effective funded consumer representation.

It goes on to say that if a consumer rep or an immediate family member receives compensation, then it must notify the CBOT and the NAIC staff person within seven days of the receipt of the compensation, or agreement to receive compensation. Items that will be looked at include expense reimbursement, employment income, receipt of gifts and honoraria.

During the NAIC's discussion of the issue, Connecticut Insurance Commissioner Tom Sullivan called the document “a good first step,” and mentioned the possibility of expanding the statement beyond “regulated entities”–given the fact that “every one of us lives in a transparent world.”

Although there is no formal charge to expand the conflict statement, the possibility of raising the issue at the next CBOT meeting was mentioned.

Following the vote, Birny Birnbaum–executive director of the Center for Economic Justice in Austin, Texas, as well as an NAIC-funded consumer representative–said: “We'll be happy to talk about this when it comes up. I wish that the commissioners could devote the same time and effort in responding to recommendations made by consumer advocates as they do worrying about a handful of consumer advocates who volunteer their time to come to the NAIC.”

Mr. Birnbaum–who was part of the CBOT during the conflict statement's development–asked whether industry groups such as NAMIC are required by the NAIC to reveal what individual member companies contribute in dues.

NAMIC sent a letter on Nov. 24 applauding a consumer conflict statement and calling on the NAIC to make it more comprehensive by going beyond disclosing associations with “regulated entities” to include any organization with an interest in insurance regulation.

Special Reports /

NAIC Modifies Climate Change Data Call

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