(Bloomberg) -- California Insurance Commissioner Dave Jones is urging insurers to voluntarily divest from thermal coal, citing the risks of climate change and the danger of losses on assets backing policyholder obligations.
Jones, who oversees the sixth-largest insurance marketplace in the world, is the first U.S. state regulator of the industry to call for the divestment of such assets, the California Department of Insurance said Monday in a statement. The commissioner is also requiring insurers to annually disclose their carbon-based investments, including holdings in oil, gas and coal.
Political leaders met in Paris last month to endorse an international agreement that would limit fossil-fuel pollution, with French President Francois Hollande hailing the deal as “a major leap for mankind.” Insurers including France’s Axa SA and London-based Aviva Plc have announced plans to either divest from some fossil fuels or target more investments in renewable energy.
“The movement away from coal and the rest of the carbon economy poses a potential financial risk to insurance companies,” Jones said in the statement. “The potential risk of continuing such investments is that they lose value over time or that they lose value quickly. In either case, such investments pose a potential financial risk to those who invest in them.”
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