Connecticut Insurance Commissioner Thomas B. Leonardi today announced that Connecticut-based insurance companies will now be required to complete the annual Climate Risk Survey that was initially adopted in 2009 as a voluntary report by the National Association of Insurance Commissioners (NAIC).
"As regulators, it is important that we identify those climate-related factors that can affect the marketplace and in particular the availability and cost of insurance. These surveys give us another window into the industry's risk management practices as they relate to changing weather patterns," Commissioner Leonardi said. "This is also a transparent process and the surveys will be made available to the public."
Connecticut has joined with four other states - California, Minnesota, New York and Washington in making the survey response mandatory for licensed companies that are writing annual premiums of more than $100 million. In Connecticut, approximately 110 insurance companies meet that criteria and will be required to complete the survey.
The eight-question survey must be completed and submitted to regulators by Aug. 30, 2013. The survey requires insurers to provide a description of the steps taken with respect to climate-related risks.
Topics include helping policyholders mitigate potential losses, identifying geographical areas of business at risk and describing the use of computer modeling. Carriers are also asked to summarize any climate-related policy the company may have with respect to investment management.
"I also believe that this information will be a help to the industry itself, its investors and its reinsurers, the sector of the industry that bears a great deal of risk by underwriting losses for the traditional carriers," Commissioner Leonardi said. "Carriers are the specialists in risk management and have successfully advocated for safer automobiles and homes to reduce loss.
This is another opportunity for the industry to help us all chart a safer and more prepared approach for significant weather events to ultimately mitigate damage and reduce costs for the consumer." California, New York and Washington had mandatory reporting requirements since 2009 for companies writing more than $300 million in premium. The new $100 million premium threshold could double the number of respondents. Those reports from 2009-2012 can be found at Climate Risk Disclosure Survey.