NU Online News Service, Sept. 16, 3:59 p.m. EDT

An insurance industry trade group representative is questioning the propriety of three top regulators inviting insurers to attend an expensive charity event.

The issue is being raised by Bob Detlefsen, vice president of public policy for the National Association of Mutual Insurance Companies (NAMIC), who suggests that insurers may conclude that by attending they will get favorable treatment on the issue of their activities concerning climate change.

The event being endorsed by insurance commissioners–Joel Ario of Pennsylvania, Mike Kreidler of Washington and Ralph Tyler of Maryland–is a Sept 29 fundraiser in New York for the Tropics Foundation.

A spokesman for Commissioner Kreidler said the three regulators will likely speak at the event on the issue of climate change and Mr. Detlefsen said he expects it to be addressed.

The National Association of Insurance Commissioners recently voted a requirement that insurers disclose their activity to deal with climate change but issued no guidelines.

Mr. Detlefsen said attending the fundraiser could be seen as a way to obtain a form of guidance on the NAIC's Climate Risk Disclosure Survey regarding what kind of actions on climate change will be looked on favorably by regulators.

The Tropics Foundation, which describes itself as "a U.S. nonprofit charitable corporation created to support sustainable rural development and conservation of the environment in Latin America and the Caribbean."

Commissioner Kreidler sits on the board of the Tropics Foundation, according to the organization's Web site.

Mr. Detlefsen said asking insurers to attend is an issue because commissioners had opted not to provide guidance for the Climate Risk Disclosure Survey when it was approved by the NAIC earlier this year.

Under the survey, insurers are required to answer nine questions about climate change and submit those answers to their state regulator. The answers will be made publicly available.

Since no guidance was provided, Mr. Detlefsen wondered whether this fundraiser, with "suggested sponsorship levels" of $1,000 up to $10,000, is some kind of substitute for guidance.

He also said insurers could be under the impression that their answers would be more favorably reviewed if they attend the fundraiser and donate money to a group like the Tropics Foundation.

Mr. Detlefsen said NAMIC submitted comments on the Climate Risk Disclosure Survey stating that the questions seem to suggest that insurers ought to be supporting a particular agenda with respect to climate change. "One way of interpreting this invitation–it confirms that hypothesis to some extent," he said.

Essentially, Mr. Detlefsen questioned whether it is proper for regulators to lend their names and presence to a fundraiser for a group where they will speak with respect to climate change, and then invite insurers to participate and discuss a matter on which they are about to be regulated at that venue.

He asked, "What if banks received an invitation to a fundraising drive" where they could contribute $5,000 and have private discussions with Sheila Bair, chairperson of the U.S. Federal Deposit Insurance Corporation (FDIC), to discuss a new regulation. "Would that raise eyebrows in Washington?" Mr. Detlefsen asked. "I think it would."

Responding via e-mail, Commissioner Ario, who chairs the NAIC Climate Change and Global Warming Task Force, said there is no intention to make insurers feel they have to pay to speak with him. He also disputed that attending a fundraiser for the Tropics Foundation could be seen as guidance on right or wrong actions insurers could take with respect to the survey.

He said, "I signed up for this event primarily to support a charity that I understand to be doing good work in Latin America. The irony is that my secondary purpose was to create another opportunity for me to do outreach to insurers rather than vice versa. The furthest thing from my mind was that anyone would see this as suggesting that insurers have to pay to have access to me.

"I have been a strong advocate of insurers taking voluntary actions to mitigate the climate change risks as they see them in relation to their book of business. I have publicly expressed my willingness to meet with insurers, individually or in groups, to discuss initiatives like pay as you drive (PAYD) auto insurance and discounts for green buildings.

"As to the survey, the suggestion that there are preconceived 'right' and 'wrong' answers misses the point of the survey. In fact, the survey simply asks insurers to report on how they assess this risk and what they are doing to address it so that all parties will have an enhanced understanding of the issues.

"It may be that some consensus 'best practices' will emerge from the survey, but it is more likely that a range of differences will be identified and that future dialogue about the issue will be informed by these differences."

Commissioner Kreidler's spokesperson said the commissioner views the event simply as a fundraiser for a nonprofit that he supports–specifically for its work on sustainable agriculture in Latin America.

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