3 states to require insurers’ responses to climate change survey
Posted February 8, 2012
On February 1, 2012, Insurance Commissioner Dave Jones announced that the California Department of Insurance (CDI) has joined with Washington State and New York to require insurers to respond to the Climate Risk Survey adopted in 2009 by the National Association of Insurance Commissioners (NAIC).
Calif. was the only state to administer the survey in both 2009 and 2010, and has joined with the other states in order to continue the survey first established by the NAIC in 2009. Calif. and the other two states joining this initiative will require all companies that write in excess of $300 million in direct written premiums to respond to the climate change survey.
According to industry sources (AM Best newsletter), 2011 set a record for catastrophic losses for insurers. A significant portion of those losses were due to severe storms and flooding. Insurers in the U.S. saw claims from nearly 2,000 tornadoes, plus thousands of hail and high wind events. If the spring 2011 tornado and storm season were to be considered a single event, it would have cost $21.3 billion in insured losses, making it the fourth-costliest insured event in U.S. history, behind Hurricane Katrina ($47.6 billion), Hurricane Andrew ($25 billion), and the Sept. 11, 2001, terrorist attacks ($24 billion).
In 2011, crop insurers paid out a record $9.1 billion in claims on U.S. crop damage. That total could exceed $10 billion when all claims resulting from damage from drought, flooding, and freezing weather are tallied. The previous record was $8.7 billion in 2008. In fact, the cost of the federal program has more than doubled in a decade.
The Commissioner said Calif. and the other two states sponsoring this data collection will continue to work cooperatively with other NAIC member states and jurisdictions participating in the NAIC Climate Change and Global Warming Working Group to revise and improve the survey and its application and to also consider revisions to the risk focused financial surveillance process.
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