Commissioners Defend NAIC Climate Change Survey

Robert Detlefsen, vice president of public policy for the National Association of Mutual Insurance Companies (NAMIC) wrote the WLF paper, which argues that the NAIC's decision to make insurers' answers publicly available leaves carriers open to both condemnation by global warming activists and legal action by plaintiffs' attorneys.

Mr. Detlefsen also said the survey asks insurers for information about their response to a climate change risk that is not yet well-defined or understood by the science community.

Pennsylvania Commissioner Joel Ario, who chairs the NAIC's Climate Change and Global Warming Task Force said, "If Mr. Detlefsen is suggesting that insurer action on climate change would be premature at this point, he is playing ideological games with an issue that most companies are moving forward to address for the simple reason that they have no choice but to assess the risk in order to protect themselves."

He agreed with Mr. Detlefsen that the effects of climate change are uncertain, but said that is why the survey is important: "to learn what insurers, whose business requires them to quantify risks that typically include uncertainties, are doing to assess the climate change risk and take appropriate action."

Wisconsin Insurance Commissioner Sean Dilweg, who is the previous chair of the task force, noted the original survey proposal was a lot stronger than the current version, consisting of more questions, requiring sign-offs by chief executives and finance officers, and designed to be included as part of insurers' annual financial statements.

He said without the NAIC survey, states would have gone in their own directions on this issue, and he added it is an important role of the NAIC to seek uniformity.

Regarding the possibility of lawsuits against insurers, Commissioner Dilweg said he has spoken with Commissioner Ario about having sample answers prepared to give insurers an idea of what commissioners will be looking for.

He said while the survey results are public, individual commissioners may want to follow up privately on any answers in need of clarification.

At the end of his paper, Mr. Detlefsen urged individual state insurance departments, which have the authority to decide whether to administer the survey or to ignore it.

He told NU Online that to prevent insurance companies from being subjected to the survey questions the NAMIC strategy will be to take his objections to individual states.

Mr. Detlefsen said it was never determined that states must administer the questions, adding that states are not threatened with losing their NAIC accreditation if they ignore the survey.

Pennsylvania, Wisconsin, and Washington will almost certainly go forward with the survey, Mr. Detlefsen said. Mr. Ario, Mr. Dilweg, and Washington Commissioner Mike Kreidler have all been vocal supporters of the survey, Mr. Detlefsen noted.

He cited California as another likely candidate to go forward with the survey.

Others, though, have been less enthusiastic, Mr. Detlefsen said. He explained a task force teleconference vote held late February on the survey was the second attempt at a vote, as the task force could not even reach a quorum the first time.

Commissioner Dilweg said he expects all states to comply with the survey.