The Department of the Treasury, via the Federal Insurance Office (FIO), is requesting information and soliciting public input regarding insurance sector and climate-related financial risks.
The effort stems from President Joe Biden’s May 2021 executive order on climate change. The focus would be on assessing climate-related issues or gaps in the supervision and regulation of insurers; assessing the potential for major disruptions of private insurance coverage in domestic markets vulnerable to climate change impacts; and increasing FIO’s engagement on climate-related issues and leveraging the insurance sector’s ability to help achieve climate-related goals.
“Over the past 30 years, the incidence of natural disasters has dramatically increased and the actual and future potential cost to the economy has skyrocketed,” Treasury Secretary Janet Yellen said. “We are now in a situation where climate change is an existential risk to our future economy and way of life. Ensuring that consumers have adequate information and that the insurance industry is appropriately assessing climate-related financial risk is essential as we work to address the climate crisis.”
According to Yellen, the filing in the Federal Register serves as a key step toward assessing climate-related financial risk in the insurance sector. Per authorities, public comments must be received within 75 days of the request for information’s publication in the Federal Register.