Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

New York Regulator Wants Insurers to Disclose Climate Risks

Published 11/15/2021, 09:30 AM
Updated 11/15/2021, 09:54 AM
© Bloomberg. A man wades through flood waters on Hylan Boulevard in the Staten Island borough of New York in 2012.

© Bloomberg. A man wades through flood waters on Hylan Boulevard in the Staten Island borough of New York in 2012.

(Bloomberg) -- New York State’s financial regulator called on insurers to consider climate-related risks in their business planning and provide related disclosures.

The guidance published Monday by the Department of Financial Services directs insurers based in the state to account for their exposure to rising sea levels and climbing global temperatures. That includes disclosing climate risk and incorporating the dangers posed by climate change into risk-management frameworks.

“Climate change is an urgent issue that poses wide-ranging and material risks to the financial system,” DFS Acting Superintendent Adrienne Harris said Monday in a statement. “Insurers, which are uniquely impacted as climate change affects both sides of their balance sheets, also play a critical role in managing climate risks.”

The guidelines build on proposals outlined in March, adjusted through feedback from groups including insurers and climate experts. They arrive as regulators across the globe implement or consider implementing measures that would help to quantify how exposed financial institutions are to climate change.

In June, the Bank of England introduced a stress test of the country’s biggest lenders and insurers to judge how resilient they are to climate change. While officials at the U.S. central bank have resisted the idea of integrating climate-related tests in their annual stress tests of the largest banks, Federal Reserve Chair Jerome Powell has said he sees “climate scenario analysis” as an area of emerging study.

Among New York-based underwriters are MetLife Inc (NYSE:MET)., the largest U.S. life insurer, and American International Group Inc (NYSE:AIG)., one of the nation’s largest providers of property and casualty coverage.

In a statement announcing the guidance, the DFS identified itself as the first U.S. regulator to “issue a holistic set of expectations on managing the financial risks from climate change.” The move carries particular weight because the agency oversees major Wall Street firms and other significant financial institutions.

The guidance represents the agency’s latest action on climate change. Earlier this month, the DFS announced it had formed a climate division.

©2021 Bloomberg L.P.

© Bloomberg. A man wades through flood waters on Hylan Boulevard in the Staten Island borough of New York in 2012.

Latest comments

NY the head of socialism in America where rats live with community and homelessness is normal occurence.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.