WASHINGTON–Consumer advocates told the nation's insurance regulators at a meeting here that insurers should be made to disclose information related to the potential impact of climate change on their annual financial disclosure forms–a suggestion that industry representatives said is premature.

Their rival viewpoints were delivered at the fall gathering of the National Association of Insurance Commissioners, which concluded yesterday.

NAIC's Global Warming (EX) Task force, heard from the two sides in the course of considering a proposal to require insurers to answer questions relating to climate change and its potential effect on their business and their policyholders' businesses on their annual financial disclosure statement.

The proposal came from the Center for Economic Justice, the Natural Resources Defense Council and a network of investors, environmental organizations and other public interest groups known as CERES.

Birny Birnbaum, executive director of the Center for Economic Justice, characterized the proposal as a “litmus test for whether the NAIC is serious about climate change or not,” and challenged the panel to actively seek out information from insurers.

But, David Snyder, vice president and assistant general counsel for the American Insurance Association, argued that climate change science is something that is “rapidly emerging,” and insurers and their policyholders are “grappling” with issues and science that are changing almost daily.

Mr. Snyder questioned the proposal, both in form and substance, arguing that the information being sought, which is long term in nature, does not fit the format of a financial disclosure statement, which is designed to provide a “snapshot” of a company.

Additionally, he said the proposed disclosure would require companies to make public “competitively sensitive” information. The proposal, he said, was made up of “obviously pre-litigation type questions.”

Mr. Snyder said the NAIC should take a “more deliberative approach” and work with companies to determine what disclosures may ultimately be necessary and what form they should take.

The proposal, he said, “unconstructive, unproductive and puts us in a situation where we can't work together for the common good.”

Ultimately, Mr. Snyder said, “our basic view is that we're not there yet.” Mandatory disclosures, he said, is something the industry doesn't need, “perhaps not ever, but certainly not now.”

Mr. Birnbaum argued that the AIA was effectively asking the NAIC to “do nothing,” and David Tuft, campaign director for the NRDC, argued that far from “emerging,” climate change science has been around for 20 years and has been relatively stable.

“This body of science cannot be considered as changing, only as a strengthening of the evidence,” he said.

Members of the panel seemed alternately skeptical of both sides. Florida Insurance Commissioner Kevin McCarty questioned if any voluntary disclosures would actually prove effective, while Tim Wagner, Nebraska insurance commissioner and a co-chair of the task force, questioned if the annual disclosure statement was the proper place for such disclosures.

On the latter, issue, Mr. Birnbaum said that the proposal was made to ensure that regulators would receive the information on a timely basis, and that it would be open for public consumption. Provided those two criteria were met, he said the groups were not “wedded” to putting it in the annual disclosure and would accept it in another form.

Special Reports /

Global Warming Issue Heats Up NAIC

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