Insurance companies give the cold shoulder to demand climate risk data

  • The Treasury wants a five-year report from homeowners’ insurers by zip code as financial regulators begin to look into the effects of global warming

(Reuters) – The federal government’s proposed plan to force homeowners’ insurers nationwide to provide detailed data on their climate-related damage experiences has been warmly welcomed by consumer advocates but met with frosty responses from insurance associations and state regulators.

The public comment period ends Tuesday on the proposal, a “data call” by the US Treasury Department’s Financial Insurance Office, one of the first specific actions by US financial regulators in a new push to combat global warming.

FIO is seeking five-year zip code-level data from 213 private insurers that collectively represent at least 80 percent of the homeowner insurance market in each state.

US Treasury Secretary Janet Yellen announced the proposal in October, weeks after Hurricane Ian devastated the Florida coast, with projected insured losses of more than $60 billion, according to trade group Insurance Information Institute. Yellen said the “granular” data would help the FIO assess the impact of climate-related disasters on insurance availability and affordability for millions of Americans.

Public Citizen’s Climate Program policy director Yevgeny Shrago and Consumer Watchdog executive director Carmen Balber hailed the federal effort. They said state regulators have failed to protect consumers in low-income communities, communities of color and other demographics at risk from extreme weather events.

“There is no question that everyone is concerned about climate change and its impact on insurance coverage,” said Laura Foggan, Chair of Crowell & Moring’s Insurance/Reinsurance Group. “The question is whether this particular data call proposal is well designed to address these issues.”

For the insurance industry, the key sticking points are “the burden of the data call; the overlap between the state and federal investigations and concerns about factors not mentioned in the data call, such as: B. Fraudulent Claims; and a desire to focus less on collecting data and more on dialogue about innovative solutions to close protection gaps.”

The data call would require between 100 and 350 man-hours per insurer, FIO said. Insurers already report statewide data to their state insurance regulators, but do not break it down by zip code. FIO also wants information that government regulators don’t need, including the replacement value of the insured property and insurance policy deductibles and coverage limits.


The National Association of Insurance Commissioners (NAIC), the support organization for the top insurance regulators in all 50 states, the District of Columbia and five US territories, has publicly criticized the proposal. It said FIO had not made a “good faith” effort to cooperate with government regulators, instead “stating its intention not to cooperate.” As a result, the proposal inadvertently adds non-climate variables, such as social inflation and “the legal environment”; ignores nuances in state insurance laws and “will likely … lead to fallacious results when trying to identify climate risks,” the commentary says.

NAIC and the Insurance Information Institute each urged the FIO to abandon their current proposal and start over with a more collaborative approach and rely on publicly available information rather than new reports.

“Additionally, it would be a better use of the resources of the (FIO)”, Sean Kevelighan, CEO of the institute, to help bring greater focus to risk management by improving systems and processes that are already under existing federal oversight, such as B. Real Estate Finance and Community Development said in an email.

But not all insurance companies want a complete realignment. The Centers for Better Insurance, which examines regulatory proposals, generally favors FIO’s approach, but proposed several changes, including the addition of “special perils” insurers and all remaining “insurers of last resort,” regardless of size or ownership market share.

The American Property Casualty Insurance Association is also “committed to working with the FIO,” although it has “several significant concerns about the proposed data call as proposed,” Nat Wienecke, senior vice president of federal government relations at APCIA, wrote on Friday in an email.

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