Insurance Blog

The Securities and Exchange Commission (SEC) yesterday voted to provide public companies, including insurers, with interpretive guidance on existing disclosure requirements as they apply to business or legal developments relating to the issue of climate change. In doing so, the SEC made clear it is neither weighing in on the global warming debate nor considering amending well-defined rules concerning public company reporting obligations. “These rules and interpretations have served investors well for decades, and provide both the framework and flexibility necessary to apply to changing facts and circumstances. If something has a material impact on a company then it is something that needs to be disclosed – that has always been the case,” said SEC chairman Mary Schapiro. Nevertheless, articles in the Wall Street Journal and the New York Times noted this is the first time the SEC has said that public companies should warn investors of any serious risks […]

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Yesterday’s announcement by the Environmental Protection Agency (EPA) that greenhouse gases threaten the public health and welfare of the American people has drawn a wide range of responses in the media. In its comments, the EPA also said it found that greenhouse gas emissions from on-road vehicles contribute to that threat. The findings respond to the 2007 U.S. Supreme Court decision that greenhouse gases fit within the Clean Air Act definition of air pollutants. While the findings do not in and of themselves impose any emission reduction requirements, it’s seems likely that the decision may lead to new emissions rules and regulations. The EPA announcement also comes as the UN climate change summit opens in Copenhagen. An item on the Wall Street Journal’s Washington Wire blog makes the interesting point that of the 380,000 public comments received by the EPA in response to its proposed finding, more than 70 percent […]

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Just days ahead of the UN climate change summit in Copenhagen, two leading climate scientists from the Obama administration today will give testimony at a hearing before the House Select Committee on Energy Independence and Global Warming. According to the media advisory, the Select Committee will explore “the urgent, consensus view on our planetary problem: that global warming is real, and the science indicates that it is getting worse.” Testimony will be provided by Dr. John Holdren, director of the Office of Science and Technology Policy, and Dr. Jane Lubchenco, administrator of the National Oceanic and Atmospheric Administration (NOAA). Meanwhile, in a presentation at the annual conference of the Institute for Business and Home Safety (IBHS) earlier this week, I.I.I. president Dr. Robert Hartwig said the role played by insurers in the climate movement and the process of pricing “green” or “climate” or “environmental” risks is no different than any […]

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We picked up a couple of tidbits on the topic of climate change at the Casualty Actuarial Society (CAS) annual meeting that are worth sharing. A session yesterday on climate risk reporting and monitoring was headed up by Joel Ario, Pennsylvania insurance commissioner and Andrew Logan, of Ceres. Both anticipate a high likelihood that the Securities and Exchange Commission (SEC) will act in 2010 to require all public companies, including insurers, to disclose their climate change risks. A recent article by Evan Lehmann of ClimateWire in the New York Times has more on the potential SEC climate disclosure rules. As some of you know, state insurance regulators earlier this year adopted a mandatory requirement that insurers disclose the financial risks they face from climate change, as well as actions they are taking to respond to those risks. As a result, all insurers with annual premiums of $500 million or more […]

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A few weeks ago we blogged about a decision by the Second U.S. Circuit Court of Appeals in New York that would enable public nuisance claims to proceed against businesses for their contributions to global warming. Two similar cases have now been decided that offer starkly different opinions in the area of climate change litigation. On Friday the Fifth U.S. Circuit Court of Appeals in New Orleans reversed the dismissal of a climate change class action brought by Mississippi property owners who claim that greenhouse gases emitted by oil and gas companies contributed to global warming that added to the ferocity of Hurricane Katrina that caused damage to their properties. Hat tip to the Wall Street Journal Law Blog for its post on the decision which cites J. Russell Jackson, a partner at law firm Skadden Arps saying that at a minimum the ruling will invite more climate change litigation […]

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A decision by the 2nd U.S. Circuit Court of Appeals in New York earlier this week would enable public nuisance claims to proceed against businesses for their contributions to global warming. In Connecticut v. American Electric Power, the 2nd Circuit reversed the district court’s decision, effectively giving the green light to a public nuisance lawsuit filed by eight state attorneys general, New York City and three land trusts against six electric power companies based on greenhouse gas emissions. Public nuisance is a common law tort that imposes liability on an individual or entity that interferes with a public right – to health and safety, for example. The 2nd Circuit decision would effectively reverse the judicial trend on the public nuisance theory. We recall that in July 2008, the Rhode Island Supreme Court overturned a landmark case against three former lead paint manufacturers, refusing to allow the expansion of the public nuisance […]

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World leaders gather at the United Nations HQ in New York City this week for what is being billed as the highest-level conference yet on climate change. According to the UN this is the largest gathering to-date of heads of state and government on climate change. The meeting comes ahead of the UN climate change conference in Copenhagen in December at which leaders are expected to reach a new global agreement to address climate change.  A recent survey by the Carbon Disclosure Project indicated that despite the economic downturn, climate change remains high on the agenda of the world’s largest 500 companies. Some 82 percent of companies responded to the survey this year – the highest response rate ever from global 500 corporations – up from 77 percent last year. The report also showed significant improvements in the key areas of disclosure of greenhouse gas emissions data and targets to […]

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Climate change is changing both the economic and the natural environment and in both cases the insurance industry can turn these changes into opportunities, according to a new report by the Geneva Association. Release of the report comes as leaders from the Group of Eight (G8) industrialized nations and the main developing economies are due to meet in Italy this week to try to reach consensus on various issues, including how to tackle climate change. The Geneva Association says that insurers have a key role to play in encouraging the general economy and society to develop solutions to minimize climate change impacts by: designing insurance products that incentivize actions to raise resilience; creating innovative products and adapting existing insurance policies to climate change; and as underwriters of, and investors in, future technology. To seize the opportunities to these changes insurers should proactively discover the risk at an early stage, work […]

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Climate change will increase water scarcity, alter food production and dramatically change energy supply and migration patterns, according to a new report from Lloyd’s and the International Institute for Strategic Studies (IISS). The report, titled Climate Change and Security: Risks and Opportunities for Businesses, finds that businesses have a vital role to play in the mitigation of and adaptation to climate change. There are many ways that business can protect itself from the adverse effects of climate change and adapt to the new conditions, but business can also contribute to the goal of minimizing climate change. Boards should consider four key points: awareness and information; risk assessment and analysis of vulnerabilities; awareness of opportunities as well as risks; and spreading best practice. The report concludes that significant changes in the natural and political environment will place great stresses on businesses of every sort, but they will also create opportunities for […]

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Environmental risk management is among the many topics up for discussion at this week’s Risk and Insurance Management Society (RIMS) 2009 Annual Conference in Orlando, Florida. On Friday the Environmental Protection Agency (EPA) confirmed that greenhouse gases are air pollutants that may endanger public health or welfare. The proposed finding, which now moves to a public comment period, identified six greenhouse gases (carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride) that pose a potential threat. As an April 17 New York Times article notes, this basically sets in motion a process that will lead to regulation of greenhouse gases for the first time in the United States. It follows a landmark April 2007 U.S. Supreme Court decision that greenhouse gases fit well within the Clean Air Act’s definition of air pollutant and that the EPA has the authority to regulate emissions. Check out I.I.I. information on climate change […]

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