NAIC Ponders Climate Change

At the March 12th hearing titled "Climate Science: Empowering Our Response to Climate Change," Wisconsin Insurance Commissioner Sean Dilweg spoke about the impact of climate change on the insurance sector. Testifying on behalf of the National Association of Insurance Commissioners (NAIC), Dilweg stated that insurers and consumers will be among the first to feel the effects of a shift in weather patterns.

"[This means that] the evolution of climate science is of keen interest to us as regulators, and is a key tool for the companies we regulate," he told members of the U.S. Senate Committee on Commerce, Science and Transportation. "The NAIC has taken a forward-looking approach to developing assessment tools that identify the potential impact climate change has on insurers and how insurers are assessing those risks."

Dilweg discussed the work of the NAIC Climate Change and Global Warming Task Force, specifically highlighting the force's white paper, The Potential Impact of Climate Change on Insurance Regulation. The paper discusses the effects of climate change on insurance industry investment decisions, disclosures, and underwriting practices. The paper also stresses the need for improved mitigation programs and land-use policies that reflect the potential for climate change impact.

In addition, insurance regulators, working together through the NAIC, have drafted an Insurance Climate Risk Disclosure Survey. The survey is a uniform tool that was developed to help regulators measure the impact of climate change on policyholders and insurer operations.

During his appearance, Dilweg stressed that although the NAIC has taken some important first steps, more can be done. "We are encouraged that the Committee shares our common interest in having accurate, objective climate science to back up critical policy decisions," he concluded.

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