US Authorities to Address Climate Risks in Insurance Sector
The U.S. Department of the Treasury’s Federal Insurance Office (FIO) announced that it has joined the Network of Central Banks and Supervisors for Greening the Financial System (NGFS). In addition, the Federal Advisory Committee on Insurance (FACI), to further enhance FIO’s climate work, launched the Climate-Related Financial Risk Subcommittee, which will support FACI in providing expert advice and recommendations relevant to the work on climate-related risks in the insurance sector.
FIO in collaboration with NGFS and its global membership, will work on assessing climate-related financial risks and their effects on the insurance sector. Previously, in August 2021, FIO issued a request for information on the insurance sector and climate-related financial risks, in which three climate-related priorities were outlined. The priorities were:
- assessing climate-related issues or gaps in the supervision and regulation of insurers, including their potential impacts on U.S. financial stability
- assessing the potential for major disruptions of private insurance coverage in U.S. markets that are particularly vulnerable to climate change impact as well as facilitating mitigation and resilience for disasters
- increasing FIO’s engagement on climate-related issues and leveraging the insurance sector’s ability to help achieve climate-related goals
To advance these priorities, FIO will publish a climate report by the end of the year, with a focus on insurance supervision and regulation and an assessment of climate-related issues or gaps in the supervision and regulation of insurers, including the potential impact of climate change on the U.S. financial stability. In addition, the report will include an analysis of climate-related disclosures for the insurance sector and might also include initial analyses of the selected at-risk insurance markets.
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Keywords: Americas, US, Insurance, Climate Change Risk, ESG, Disclosures, NGFS, FIO, FACI, US Treasury
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