California Regulator Is Urged to Address Insurers’ Climate Risks

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By Katherine Chiglinsky, BLOOMBERG

March 21, 2019

(Bloomberg) — Consumer and environmental groups are pushing for newly elected California Insurance Commissioner Ricardo Lara to require insurers to disclose their ties to fossil fuel companies and projects.

The organizations want insurers to report the underwriting of fossil fuel-related companies, as well as the investments in those types of entities, according to a letter sent Thursday from groups including Consumer Watchdog. The previous commissioner said in 2017 that insurers surveyed in the state had $521 billion of investments in fossil fuel-related securities.

More than 60 organizations signed Thursday’s letter, demanding that the industry address climate-related risks.

European insurers have taken such steps, with Italy’s Assicurazioni Generali SpA pledging last year to stop
underwriting new coal construction or taking on new coal clients and France’s Axa SA divesting some holdings in fossil fuel-tied securities.

The groups argued in the letter Thursday that disclosing ties to fossil fuel-related entities can help the regulator
better understand the risks. They urged the commissioner to follow through on an effort to require that such investments be reported.

Lara, who took office earlier this year, said in January that he was creating a role for a deputy commissioner of climate and sustainability. Under the previous commissioner, the department addressed the fallout from the deadly wildfires that hit the state last year. The regulator moved to take control of an insurance company, Merced Property & Casualty Co., that was allegedly overwhelmed by claims from the deadly Camp Fire, which burned hundreds of thousands of acres in Northern California last year.

To contact the reporter on this story:
Katherine Chiglinsky in New York at [email protected]
To contact the editors responsible for this story:
Michael J. Moore at [email protected]
Dan Reichl, Daniel Taub

Consumer Watchdog
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