A group of state insurance regulators in the US has adopted a new standard for insurance companies to report their climate-related risks, in alignment with the international Task Force on Climate-Related Financial Disclosures (TCFD).
The announcement, made during the National Association of Insurance Commissioners’ (NAIC) spring meeting in Kansas City, is of a bipartisan effort to produce a standard that aligns with the Task Force on Climate-Related Financial Disclosure (TCFD).
Under the new standard, insurance companies required to respond to the annual NAIC Climate Risk Disclosure Survey will need to comply with TCFD reporting by November 2022.
Fifteen states – including California, Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, Minnesota, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Vermont, and Washington – have committed to utilize the NAIC survey in 2022 for insurance companies licensed in their jurisdictions, representing nearly 80 percent of the U.S. insurance market.
A statement from the regulators says that a task force determined that implementing a TCFD-aligned disclosure framework would enhance transparency about how insurance companies manage climate-related risks and opportunities and incorporate international best practices, among other benefits that the Task Force identified in the new standard.
Ricardo Lara, California Insurance Commissioner, was one of a number of commissioners who provided statement.
Lara said: “Our global climate crisis affects every state, requiring us to reach across partisan divides to find solutions that protect all people. By holding insurance companies to this global standard for climate disclosure, insurance regulators are showing the power of united leadership in our efforts to address climate change and reduce the negative impacts on insurance consumers.”
