Climate dislosure imposed on insurers

March 18, 2009

The Wall Street Journal reported this morning that,

Insurance companies must start disclosing how climate change is likely to affect their businesses, state insurance regulators decided Tuesday.

The National Association of Insurance Commissioners voted to require insurers to submit annual “climate-risk” reports, an unusually aggressive stance on the environmental issue from industry regulators.

The officials acted after concluding that climate change threatens insurers in two ways. It increases the risk of extreme weather events such as floods and wildfires, which would boost claims. And it is prompting governments to cap industrial carbon emissions that contribute to global warming — a move threatens the profits of companies such as coal-fired utilities in which insurers commonly invest.

But as to climate change boosting claims, a Science and Public Policy Institute report concludes,

Despite the lack of any trends in hurricane landfalls along the U.S. and Florida coasts, or damage to U.S. coastlines when population demographics are taken into account, the impact from a single storm can be enormous. The massive population and infrastructure build-up of the US coastline has vastly raised the potential damage that a storm can inflict. It is stunningly dishonest and irresponsibly dangerous to insinuate, let alone assert, that CO2 mitigation policies could cage the destructiveness of nature, particularly in hurricane-prone Florida.

As to insurance industry investments in the coal industry being threatened by climate regulation, why would the insurance industry want to fan the flames of such financially harmful regulation in the first place by falling for climate alarmism?

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