TRENTON — New Jersey Department of Banking and Insurance Acting Commissioner Justin Zimmerman today announced that certain insurance carriers licensed in New Jersey will now be required to publicly report information on how they are addressing and preparing for increasing climate change impacts.
Using the Climate Risk Disclosure Survey, insurers will report on climate-related risks and opportunities, which will provide the department with valuable information to evaluate insurance company risks and activities.
“The Department is committed to Governor Murphy’s vision to ensure New Jersey remains a leader in combating climate change, preparing for its impact and mitigating environmental harms,” said Acting Commissioner Zimmerman. “By joining states from across the country in this important effort, the department will gain additional regulatory tools to protect New Jersey consumers. This initiative will improve transparency of insurers’ business activities and enhance the department’s ability to assess an insurers preparedness and resiliency related to climate-related risks.”
With this requirement, New Jersey joins insurance regulators from 26 other United States jurisdictions that are implementing the National Association of Insurance Commissioners’ (NAIC) Climate Risk Disclosure Survey. The recently revised NAIC Climate Risk Survey aligns with the guidelines of the Task Force on Climate-related Financial Disclosures (TCFD). The TCFD standard is the international benchmark for climate risk disclosure and will help insurance regulators and the public to better understand the climate-related risks to the U.S. insurance market, which is the largest in the world.
The information gathered in the survey will provide insight on the importance that a carrier places on their financial stability and business model related to impacts of climate change. The information will provide a better understanding of insurers’ underwriting guidelines and policy pricing. Additionally, the data will enable the department to better evaluate potential risks and losses and identify factors that could either increase or reduce risks, which will inform the department’s ability to protect New Jersey policyholders and strengthen the industry. The department will review the responses provided by New Jersey licensed insurers alongside the country’s leading carriers to evaluate efficacy, innovation and preparedness.
The department has been an active member of NAIC task forces and work streams to innovate and advance better regulating approaches to evaluate the private insurance climate risk readiness.
All insurance companies who are licensed in the State of New Jersey and that collected direct written premium amounts of more than $100 million dollars nationwide during 2022 must respond to the survey for New Jersey. Insurers required to respond to the survey by another partner state or jurisdiction may instead respond to that particular state or jurisdiction. The completed survey responses are due August 31, 2023.
The multi-state initiative is led by the California Department of Insurance. Climate Risk Disclosure Survey responses will be available to the public on California’s Department of Insurance website. Additional information related to the survey can be found on California’s Department of Insurance Climate Risk Disclosure website.
To read the department’s bulletin, issued Friday, go to: https://www.state.nj.us/dobi/bulletins/blt23_06.pdf. |
