New York, N.Y. — A coalition of five attorneys general led by New York Attorney General Letitia James filed comments yesterday in response to a request for information on climate-related financial risks by the Department of Treasury’s Federal Insurance Office. The comments highlighted the connection between communities who are most affected by climate disasters and those with limited access to insurance; it is more difficult for those who are underinsured to recover from climate disasters, making them even more vulnerable to future climate harms, which will only intensify. The AGs called on the Office “to focus on how insurers and insurance products are being made available (or less so) to our most vulnerable communities and to facilitate [the] expansion of insurance products to help these communities build financial resilience to climate change.” The comments also called on the Office to increase and standardize the collection of financial risk data, and to make this information available to states through a centralized database so that it can be used for policymaking.
The AGs spelled out the two-fold responsibility of the insurance industry to address climate-related financial risks, noting the industry’s fiduciary responsibility to consider the long-term instability of investing in fossil fuels, as well as the responsibility to protect its customers who will increasingly rely on insurance as climate-related harms intensify. The AGs noted that some states are already enacting laws and releasing guidance for the insurance industry around climate risk.
“Climate change will continue to harm our most vulnerable communities,” said Bethany Davis Noll, Executive Director of the State Energy & Environmental Impact Center. “In showing the clear connection between climate and financial resilience, AGs are fighting to ensure that there are multiple layers of protection at this pivotal time.”
Background — To carry out Executive Order 14030 (Climate-Related Financial Risk), the Federal Insurance Office of the U.S. Department of Treasury issued a request for information on August 31, 2021. The Office listed the following as its top climate-related priorities: including climate concerns in the supervision and regulation of insurers; facilitating the mitigation of climate financial impacts and the resilience of insurance markets; and increasing engagement with the Office. The Office’s request for information solicited input on how it should best implement the Executive Order, whether its three climate-related priorities are sufficient, how its data collection could be improved, and how it should engage with and regulate the insurance sector, among other questions.
The attorneys general of Connecticut, Maryland, Massachusetts, and Oregon joined AG James in filing yesterday’s comments.
About the State Energy & Environmental Impact Center
The State Energy & Environmental Impact Center at the NYU School of Law is a non-partisan academic center dedicated to the study and support of state attorneys general in their work defending and promoting clean energy, climate and environmental laws and policies.