Attorneys general from five states responded to a request for information from the Department of Treasury’s Federal Insurance Office on how it should best implement President Joe Biden’s Executive Order on Climate-Related Financial Risk.
In their response, the AGs from New York, Connecticut, Maryland, Massachusetts, and Oregon said it needs to address the insurance needs of communities that are most affected by climate disasters. The joint statement, led by New York AG Letitia James, said it was more difficult for those who are underinsured to recover from climate disasters, making them even more vulnerable to future climate harm.
The AGs called on the Treasury “to focus on how insurers and insurance products are being made available (or less so) to our most vulnerable communities and to facilitate [the] expansion of insurance products to help these communities build financial resilience to climate change.” They also called on the Treasury Department to increase and standardize the collection of financial risk data and make it available to states through a centralized database so that it can be used for policymaking.
Further, the AGs said it was the responsibility of the insurance industry to address climate-related financial risks. They noted the insurance industry’s fiduciary responsibility to consider the long-term instability of investing in fossil fuels, as well as the responsibility to protect its customers who will increasingly rely on insurance as climate-related harms intensify.
“Climate change will continue to harm our most vulnerable communities,” Bethany Davis Noll, executive director of the State Energy & Environmental Impact Center, an organization that supports climate-related action by state AGs, said. “In showing the clear connection between climate and financial resilience, AGs are fighting to ensure that there are multiple layers of protection at this pivotal time.”
The AGs noted that some states are already enacting laws and releasing guidance for the insurance industry around climate risk.