NAIC Approves Climate Survey Of Insurers

SAN DIEGO–The National Association of Insurance Commissioners gave final approval yesterday to a climate risk disclosure survey that has received mixed support among the insurance industry.

The survey was approved by the NAIC in plenary session during the organization's 2009 Spring Meeting here.

Insurers are asked in the survey to answer eight questions designed, according to the survey draft, "to provide regulators, shareholders and the public with substantive information about the risks posed by climate change to insurers and the actions insurers are taking in response to their understanding of climate change risks."

Insurer associations such as the Property Casualty Insurers Association of America (PCI) and the National Association of Mutual Insurance Companies (NAMIC) have opposed the survey because they argue that answers could be made public exposing insurers to lawsuits depending on how those responses are perceived and used by interested parties.

Others, such as the American Insurance Association (AIA) accept the survey in its current form because it is the result of compromises made by the industry and consumer groups.

As noted Monday by Commissioner Joel Ario of Pennsylvania, who chairs the Climate Change and Global Warming Task Force, the original survey proposal called for the survey to be included in the annual financial statements that insurers are required to file. Additionally, the questions were precise and specific, he said.

The industry had said the annual statement was not an appropriate vehicle for the questions and also expressed fears of litigation, which consumer advocates have dismissed as unlikely argument designed to stymie an environmentally important effort.

Commissioner Ario said the final survey version removes the questions from the annual financial statements and asks more general questions.

Commissioner Ario said NAMIC has remained the most vocal opponent of the survey. He added that the life and health industry has also expressed opposition, believing the survey is not applicable to its companies.

But the life and health industry has agreed to go along with the survey's final version, Commissioner Ario noted.

Connecticut Insurance Commissioner Tom Sullivan said he supported the current survey version because the reporting requirements seem to be "relatively benign." He did, though, express opposition to any further "rigid encroachment" by the NAIC on the subject of climate change. "I view this very much as a ceiling now," he said.

Commissioner Ario said the Climate Change Task Force would not be looking to drill down anymore on this issue. He also said the goal of the survey is to promote coordination among the states. Without a uniform NAIC survey, he said, individual states would have taken separate actions on this issue, creating multiple surveys with different questions.

The survey would require insurers to submit answers by May 1, 2010 for the 2009 reporting year, a PCI brief noted.