In the latest example of how far-reaching the issue of climate change has become, insurance companies are now required to report to state regulators how climate change affects their businesses. Today’s Wall Street Journal reports,
The National Association of Insurance Commissioners voted to require insurers to submit annual “climate-risk” reports, an unusually aggressive stance on the environmental issue from industry regulators.
The officials acted after concluding that climate change threatens insurers in two ways. It increases the risk of extreme weather events such as floods and wildfires, which would boost claims. And it is prompting governments to cap industrial carbon emissions that contribute to global warming — a move threatens the profits of companies such as coal-fired utilities in which insurers commonly invest.
What information insurers choose to disclose will become public next year. Insurance companies with annual premiums totaling more than $500 million must submit their first annual climate-risk disclosure reports by May 1, 2010.
Some carriers aren’t happy with the regulators’ decision. David Kodama, director of policy analysis for the Property Casualty Insurers Association of America, which represents more than 1,000 insurance companies, said his group is concerned that insurers that provide climate-risk information could face lawsuits alleging that their information isn’t detailed enough.
Sounds like a great way to angle for some of Obama’s bailout green — but beware, insurers, it’s more than likely that more green strings will be attached, quite apart from the regulatory ones.