The US Department of the Treasury’s FIO is accelerating its efforts to collect and assess data on the impact of climate-related financial risks on the insurance industry.
The FIO has undertaken this effort in collaboration with the state insurance regulators and the NAIC.
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The collaboration, a continuation of the FIO’s efforts announced over a year ago, will involve gathering ZIP Code-level data from the largest homeowners’ insurers through the NAIC.
Under this effort, the NAIC, representing participating state insurance regulators, will compile this detailed information and coordinate with the FIO, which plans to use the data for a nationwide assessment of climate-related financial risks to consumers in the US.
The FIO’s original proposal to collect climate-related data directly from insurance companies was approved by the Office of Management and Budget earlier this year.
However, the agreement with the NAIC and state insurance regulators to provide timely comparable data has led the FIO to join this collaborative effort instead of conducting a separate data collection.
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By GlobalDataThe data sharing between the NAIC and FIO is set to commence in June this year following the conclusion of the NAIC’s data collection period.
The NAIC has also committed to delivering the final data to the FIO by late September of the same year.
The FIO’s analysis of this data is intended to address President Joe Biden’s Executive Order on Climate-related Financial Risk, EO 14030, which urges the FIO to evaluate the potential for significant disruptions in private insurance coverage in areas highly susceptible to climate change.
Additionally, the data will support the FIO’s statutory obligations to monitor the availability of affordable insurance products for underserved communities, minorities, and low and moderate-income individuals, as well as to oversee the insurance industry.
Commenting on the US Treasury’s move, consumer advocacy group Public Citizen said that this collaboration will not provide a complete picture of risk if disclosures are selective.
Public Citizen Climate Program insurance policy advocate Carly Fabian said: “For financial regulators, comprehensive, granular data is key to understanding the localised and nation-wide risks posed by impacts caused by climate change.
“The success of the NAIC’s efforts, and Treasury’s reliance on them, hinges on an accessible data source that is updated regularly with data from every state.”
