NU Online News Service, Dec.10, 2:37 p.m.EST

SAN FRANCISCO–Insurers are increasingly offeringproducts and promoting behavior that address the growing risk ofclimate change, according to presentations delivered at aninsurance regulators' Climate Risk Summit.

The meeting here during which the science of and responses toglobal warming were discussed was sponsored by the NationalAssociation of Insurance Commissioners Climate Change and GlobalWarming Task Force.

At one point the sessions was enlivened with some debateconcerning the disclosures from what some call "Climategate."

Insurers outlined an array of products and initiatives in whichthey are involved, and offered projections on how the industry canconstructively participate in a warming global environment goingforward.

Stephen Bushnell, product director at Fireman's Fund InsuranceCompany, which is an Allianz company, outlined products his companyhas designed to address energy emission-driven climate change,including coverage for certified green buildings and a greenhomeowners product in 2008, as well as variety of other greenproducts ranging from coverages for manufacturers toautomobiles.

Looking forward, he said insurers and policymakers can worktogether to build and rebuild property intelligently – updatingbuilding codes to reflect exposure to natural disaster risksassociated with climate change.

Additionally, he said they can combine to promote energyefficient buildings as a priority in climate and energy policy.

Areas for cooperation were perhaps highlighted by two experts inseparate fields citing different flaws with building codes.

Mr. Bushnell noted that energy efficient buildings, such asthose that are certified under the Leadership in Energy andEnvironmental Design (LEED) rating system, do nothing for improvingcoastal, wind and fire resistance.

Meanwhile, Evan Mills, of the U.S. Department of Energy'sLawrence Berkeley National Laboratory, in an earlier presentationpointed out that structures built outside of flood zones anddesigned to withstand wind damage are not always the most energyefficient.

Mr. Bushnell recommended building codes that promote bothsustainable and resilient buildings.

Lindene Patton, climate product officer of Zurich, said theinsurance industry has a long history of reducing risks, and can doso again with climate change if insurers are allowed to priceaccording to the risks they assume.

Her presentation noted, "No amount of insurance will make a poorproject/site/product/operation good." Ms. Patton added,"Policymakers should engage insurance industry expertise andcapital to most efficiently and effectively adapt to and mitigaterisks of climate change."

But she said insurers must be allowed to use their core skillsto "send risk based price signals."

Government indemnity or pools that spread or mask risks, shesaid, "may inadvertently increase moral hazard and overallrisk."

Panelists also discussed Pay As You Drive (PAYD) insuranceproducts – which price auto insurance policies according to milesdriven – as a way to decrease driving and therefore cut autoemissions.

Justin Horner, transportation policy analyst for the NaturalResources Defense Council said 14 percent of total emissions comefrom light duty vehicles. Reducing that number, he said, requiresless driving, lower emission cars and cleaner fuels.

PAYD insurance products, he said addresses the "less driving"part of the equation, he said, noting that drivers who choose suchproducts have been shown to reduce their driving by an average of 5percent.

It was pointed out that there is some controversy concerning howand what insurers may monitor when using telemetry devices with thePAYD products. Devices installed in cars can track how, where, andwhen a driver drives in addition to the miles logged.

In California, consumer advocates effectively lobbied to ban theuse of GPS capabilities that can monitor where a driver is driving,related Adam Cole, California Insurance Department generalcounsel.

A representative from the Reinsurance Association of Americaheld up his Blackberry and noted that it has GPS, and he can betracked through the device, and questioned why such capabilities intelemetry devices was different.

Mr. Cole said the California department wanted the regulationauthorizing the sale of PAYD products to be popular with everyone.If tracking a driver's location makes consumers uncomfortable, hesaid, the department was willing to ban it for now to gain wideacceptance.

California Insurance Commissioner Steve Poizner, Mr. Cole said,wanted the products authorized and used as much as possible for itsenvironmental benefits.

Mr. Mills offered statistics showing the effects of climatechange between the 1997 meetings in Kyoto, and the current summitin Copenhagen. In 1997, he said, scientists offered variousprojections regarding emissions. We have outpaced even the high-endprojections, Mr. Mills said. The world is now pumping 90 milliontons of carbon dioxide into the air per day, he said.

Climate related impacts are happening now, he said, and willonly increase. He said it is the extremes in temperatures that arebecoming dangerous, even if the average temperature is notnecessarily changing a lot.

Aside from temperature-related impacts, the CO₂ isacidifying the ocean, which is eating away the shells of animalsand impacting coral reefs, he said.

Mr. Mills from the Department of Energy addressed thecontroversy surrounding the so-called "Climategate scandal," wherescientist's e-mails denigrating global warming opponents andadvocating blocking their efforts were revealed.

He said the "illegal breach" that exposed the emails representsa "desperate resurgence" of contrarian views, and he contended thatit was an act of desperation.

He also said the "debate" around the scandal seems to be about"fear and ideology."

As for the substance in the emails, Mr. Mills said it showsscientists are human, get frustrated, and say bad things about eachother.

But Bob Detlefsen, vice president of public policy for theNational Association of Mutual Insurance Companies (NAMIC),commented to Mr. Mills that he was disappointed by the "frivolousattempt" to explain away the emails.

He called it "remarkable evasion" to dismiss the content of theemails, and cited a Wall Street Journal article that contended theemails showed the lengths some will go to in order to blacklistdissent, and that the computer models used to understand climatechange are poorly designed.

Mr. Mills said if he was trying to evade the issue, he would nothave brought it up in the first place.

Mr. Cole said the California Insurance Department will provide aguidance document online to assist insurers as they complete theClimate Risk Disclosure Survey developed by the NAIC.

Although the NAIC said it will not provide any further guidance,Mr. Cole said the California department will make available afour-page guidance document to help spell out what the surveyquestions mean. Some questions, he said, are notself-explanatory.