The National Association of Insurance Commissioners (NAIC) today adopted a new white paper, The Potential Impacts of Climate Change on Insurance Regulation. It documents the potential insurance-related impacts of climate change on insurance consumers, insurers and insurance regulators.

“Nearly anything that is insured — property, crops and livestock, business operations or human life and health — is vulnerable to weather-related events,” said NAIC President and Kansas Insurance Commissioner Sandy Praeger. “State insurance regulators are aggressively moving forward to influence greater industry attention and action relative to climate change-related risk.”

The white paper thoroughly examines climate change and the corresponding issues faced by insurance regulators, including:

* Solvency Overview
* Property/Casualty Insurer and Regulatory Challenges
* Life Insurer Issues
* Health Insurer Issues
* Government Role

“Climate change is a complex issue — and this white paper merely serves as the beginning of a process, rather than the end,” Praeger said. “The growing consensus about climate change requires responsible business decisions to address the issue.”

Specifically, the white paper recommends that state insurance regulators develop standardized climate risk dislosures that answer the following questions:

* Are insurers adequately including climate risk, and climate risk changes, in their internal risk assessment process?
* Are insurers adequately informing and incentivizing policyholders as to their risks?
* Are the insurers’ governance structures sufficient to keep its board members informed about climate risk?
* Are insurers taking adequate steps to mitigate their own risks and to foster policyholder mitigation?

“The disclosure proposal is a minimum first step toward obtaining the information regulators need to determine the impact climate change will have on insurance consumers,” Praeger added.

About the NAIC

Headquartered in Kansas City, Mo., the National Association of Insurance Commissioners (NAIC) is a voluntary organization of the chief insurance regulatory officials of the 50 states, the District of Columbia and five U.S. territories. The NAIC’s overriding objective is to assist state insurance regulators in protecting consumers and helping maintain the financial stability of the insurance industry by offering financial, actuarial, legal, computer, research, market conduct and economic expertise. Formed in 1871, the NAIC is the oldest association of state officials. For more than 135 years, state-based insurance supervision has served the needs of consumers, industry and the business of insurance at-large by ensuring hands-on, frontline protection for consumers, while providing insurers the uniform platforms and coordinated systems they need to compete effectively in an ever-changing marketplace. For more information, visit www.naic.org/press_home.htm.