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Earlier this month, Colorado Governor Jared Polis (D) signed S.B. 16 [1], mandating the Colorado Insurance coverage Commissioner to undertake guidelines such that insurance coverage carriers licensed in Colorado take part within the NAIC Local weather Threat Disclosure Survey starting in 2024.
The NAIC launched its Local weather Threat Disclosure Survey in 2010. Initially over two dozen states participated within the survey . In 2021, fifteen states [2] participated, growing participation from a current low of solely six taking part states. Every insurance coverage firm licensed in a taking part state that studies greater than $100 million on its annual “Schedule T” should take part. Firms that don’t meet the $100 million threshold will not be obligated however could take part voluntarily. Final yr, the NAIC permitted insurance coverage carriers to supply submissions made to the Worldwide Job Power on Local weather-Associated Monetary Disclosures (“TCFD”) in lieu of the Local weather Threat Disclosure Survey. The TCFD framework is structured round 4 thematic areas: governance, technique, threat administration, and metrics and targets.
The impression on insurance coverage carriers is more likely to be slight as most carriers licensed in Colorado will almost certainly even be licensed in one other taking part state. Greater than 1,400 corporations reported in 2020, capturing roughly 80% of the admitted insurance coverage market. Unlicensed carriers, corresponding to surplus traces carriers, will not be implicated. The choice by Colorado policymakers to cross laws relatively than make the most of administrative motion could converse to a dedication by Colorado policymakers to fulfill local weather targets.
[1] https://leg.colorado.gov/sites/default/files/2023a_016_signed.pdf
[2] Collaborating states: California, Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, Minnesota, New Mexico, New York, Oregon, Rhode Island, Vermont and Washington https://content.naic.org/sites/default/files/inline-files/2022ProposedClimateRiskSurvey_0.pdf?msclkid=e24cf6f2b47211eca09ac1c752e22857
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* With appreciation for the contributions of our summer time affiliate Brooke Labonski of the Brooklyn Regulation Faculty Class of 2024.
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