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NAIC Body Acts On IAIS, Climate

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San Diego

Members of the National Association of Insurance Commissioners Executive Committee have acted on an international staffiing decision and a climate risk disclosure survey.

Members of the committee voted here at the spring meeting of the NAIC, San Diego, to appoint a staff designee to the Executive Committee of the International Association of Insurance Supervisors, Basel, Switzerland.

All members present voted in favor of the measure.

Committee members said they were making the move to bring consistency to NAIC messages to the IAIS.

Kansas Insurance Commissioner Sandy Praeger said now is a “critically important” time for the NAIC to be involved in IAIS discussions.

New Jersey Department of Banking and Insurance Commissioner Steven Goldman said having a representative on the IAIS Executive Committee will put the NAIC on a more equal footing with European regulators.

The NAIC’s IAIS representative would be NAIC International Counsel George Brady, an NAIC representative says.

The IAIS Executive Committee will still have to vote to approve the measure, but an NAIC Executive Committee vote puts the NAIC in a stronger position, the NAIC representative says.

In a separate action, members of the NAIC Executive Committee voted to approve a climate risk disclosure survey that has received mixed support among the insurance industry.

The survey asks individual insurers eight questions designed, according to the survey draft, “to provide regulators, shareholders and the public with substantive information about the risks posed by climate change to insurers and the actions insurers are taking in response to their understanding of climate change risks.”

Insurer associations such as the Property Casualty Insurers Association of America, Des Plaines, Ill., and the National Association of Mutual Insurance Companies, Indianapolis, have opposed the survey.

The answers would be made public, and that could expose insurers to lawsuits, NAMIC and the PCI contend.

Other groups, such as the American Insurance Association, Washington, say they accept the survey in its current form because it is the result of compromises made by the industry and consumer groups.

In the past, the life and health industry also has expressed opposition, asserting that the survey is not applicable to its companies, according to Joel Ario, the Pennsylvania insurance commissioner, who chairs the Climate Change and Global Warming Task Force.

But the life and health industry now has agreed to go along with the survey’s final version, Ario said.

The authors of the original draft called for the survey results to be included in the annual financial statements that insurers are required to file.

The questions also were more precise and more specific, Ario said.

Now, Ario said, the survey results will not go into the annual financial statements, and the questions on the survey are more general.

The survey passed with approval from all present Executive Committee members. It must now be adopted by the NAIC Plenary later during the spring meeting, according to PCI spokesman Jeff Brewer.

The Plenary includes all voting members of the NAIC.

If the Plenary adopts the proposed survey program as is, the NAIC would require insurers to submit answers for the 2009 reporting year by May 1, 2010, according to the PCI.

Connecticut Insurance Commissioner Tom Sullivan said he supports the current survey version because the reporting requirements seem to be “relatively benign.” He said he opposes any further “rigid encroachment” by the NAIC on the subject of climate change. “I view this very much as a ceiling now,” he said.

Ario said the Climate Change Task Force would not be looking to drill down any more on this issue. He said the goal of the survey is to promote coordination among the states. Without a uniform NAIC survey, he said, individual states would have taken separate actions on this issue, creating multiple surveys with different questions.


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