By Colby Bermel, POLITICO PRO
April 18, 2022
A new fossil fuel investments disclosure tool unveiled Monday by Insurance Commissioner Ricardo Lara won out over a competing legislative proposal from his primary challenger, fellow Democrat Marc Levine, who accused Lara's staff of working against the bill.
Lara's spokesperson denied that agency staff fought Levine's proposal, calling the accusation "absurd."
Impact: Insurance companies' fossil fuel and green investments are now publicly available under the new site by the California Department of Insurance. Levine (D-Greenbrae) proposed a more comprehensive policy in January, but Lara launched his program before Levine's bill could get a legislative hearing. Levine also criticized Lara's move as a "merely symbolic action" that the incumbent made "only after we made it a centerpiece of our campaign."
Details: A new analysis conducted for the state by S&P Global Market Intelligence found that in 2019, the most recent year of data available, CDI-regulated insurers invested $536.1 billion in fossil fuels compared to just $11.4 billion in green bonds. It found that insurers' fossil fuel investments made up 9.4 percent of their overall assets under management.
The insurance department previously analyzed insurers' 2015-17 fossil fuel investments using a different scope and methodology. Monday's announcement added figures for tar sands and green investments.
Lara touted his "continued comprehensive strategy to address insurance companies' fossil fuel exposures and hold them accountable," including his role earlier this month in state insurance regulators approving climate risk reporting rules.
Reaction: Consumer Watchdog, a frequent critic of Lara's, wasn't satisfied with the commissioner's action. Executive Director Carmen Balber pointed out that Lara's site did not include the provision in Levine's CA AB1694 (21R) that would have required disclosures for insurers' underwriting of — not just investments in — fossil fuel companies and their projects. Lara's office responded that his department two years ago introduced the country's first "climate smart" insurance product database to help increase green underwriting.
In a message to POLITICO about the fate of his bill, Levine wrote that "I always knew it was an uphill battle and that Lara's staff was working against the bill. I had hoped it would be set for a vote, but came to the realization today that it wasn't going to happen."
What's next: Lara, Levine and other candidates for insurance commissioner will face off in the June 7 primary. The top two vote-getters advance to the November general election.
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