By Staff Reporters, INSURANCE JOURNAL
March 21, 2019
More than 60 environmental, consumer and social justice organizations on Thursday delivered a petition to California Insurance Commissioner Ricardo Lara seeking what is believed would be the first regulations in the nation requiring insurance companies to disclose the fossil fuel projects they insure.
The petition states in part: “To ensure the solvency of the insurance industry and protect consumers in California, we request that you immediately initiate a rulemaking proceeding and promulgate emergency regulations to require all insurance companies licensed to conduct business in California to fully disclose: (1) all their investments in fossil fuel-related entities, and (2) all the fossil fuel-related companies and projects that they underwrite or otherwise insure.”
The petition, which seeks to reach much further than several climate change-related mandates issued by former Insurance Commissioner Dave Jones, was first outlined in a webcast a few weeks ago. During the webcast activists laid out plans to beef up their pressure on the industry to stop investing in and insuring fossil fuel companies and projects.
Some of the same groups behind this new push have been behind pressuring the financial industry to get out of fossil. They were behind efforts to get the Norwegian Sovereign Wealth Fund in 2015 to divest an estimated $8 billion from the coal sector, and more recently BNP Paribas Asset Management, became the last of more than 100 major financial institutions to divest from coal, a total of $1 billion in their case.
The groups drew broad attention to their new focus on the insurance industry in 2018 by protesting outside the National Association of Insurance Commissioners meeting in San Francisco in insurance industry mascot costumes, including Flo, Jake, and the Gecko, to call out the industry for its investments in fossil fuel assets and its coverage of companies and projects that produce carbon.
“Insurance companies are supposed to be the last line of defense against calamitous weather events like hurricanes and fires,” Annie Leonard, executive director, of Greenpeace, said in a statement. “But by continuing to invest in fossil fuel companies and underwriting their operations the U.S. insurance industry appears to just blithely continue to throw fuel on the source of the problem. Unless they start taking decisive actions to ditch coal, oil and gas – as many of Europe’s largest insurers and reinsurers have done – U.S. insurers risk being flooded by increasing claims, litigation and public indignation.”
If the groups are successful, California would be the first state in the nation to mandate disclosure of insurance companies’ fossil fuel underwriting.
The petition also asks Lara to expand disclosure of insurance companies’ fossil fuel-related investments. The California Department of Insurance’s Climate Risk Carbon Initiative currently requires disclosure of fossil fuel-related investments by insurance companies writing more than $100 million in premiums.
This excludes half of the insurance companies in California, the groups have noted.
Public interest organizations signing the petition include: California Environmental Justice Alliance; Center for Biological Diversity; Center for International Environmental Law; Coalition for Clean Air; Consumer Watchdog; Greenpeace; Rainforest Action Network; Sierra Club California; Sunrise Project; and Sustainable Energy & Economy Network.