Declarations

Shock to the System

“Climate-related shocks are likely to be wide-reaching and secular, rather than narrow and cyclical. There’s a long-term trend, certainly on the physical risk side, that could impact bank business models.”

— Kevin Stiroh, who left the Fed earlier this year after it wound down large parts of its work on monitoring how global warming is impacting financial stability, speaking on how banks should expect to see the fallout “materialize” in balance sheets and income statements. Despite those risks, banks and investors have yet to properly map out how climate-related losses will be distributed, Stiroh said. Those at risk include homeowners, banks, insurers, and the holders of securitized financial instruments.

Fraud Squad

“The cost of insurance is something all families must be concerned with. Insurance fraud only adds to that cost. In this case, the defendant is someone who worked in the industry. We need to be able to trust the people who are working for insurers to do their jobs fairly and honestly.”

— New Jersey Attorney General Matthew J. Platkin speaking on the case of a former New Jersey insurance adjuster charged with creating and submitting phony claims, approving them himself, and directing nearly $200,000 in payments to bank accounts he controlled. John Philbin, of Clementon, has been charged with insurance fraud and theft by deception.

Small Hail, Bigger Claims?

“This data challenges long-standing opinions by insurance company experts that have denied or minimized damage from small hail. If the science says these storms age shingles years ahead of schedule and set the stage for catastrophic failure in later storms, then dismissing that damage at the claims desk is at odds with the evidence.”

— Attorney Chip Merlin, commenting on a new study by the Insurance Institute for Business and Home Safety that found roof damage from smaller hailstones may be more significant than previously believed. Insurance policies generally consider minor hail damage as normal wear and tear, requiring a singular event causing actual physical damage for a claim.

Data Out to Dry

“These new data centers are enormous. I don’t know where you get the water to do that in a state that’s already water-stressed, not only from drought but also rapid population growth in both the population and industry.”

— Robert Mace, executive director of the Meadows Center, speaking on water supply concerns and the plans for more Texas data centers. There are four data centers planned for the state’s Panhandle region, including in Amarillo, Turkey, Pampa, and Claude, and across the state as AI campuses expand in the Permian Basin, and 30 data centers are planned for Sulphur Springs, a small town in East Texas.

Human Rules Apply

“If a practice is prohibited for a human to do on behalf of an insurance company, it is prohibited for AI to do. Artificial intelligence is not an end run for insurance companies around a state’s statutes or its regulations.”

— Paul Martin, vice president of state affairs for the National Association of Mutual Insurance Companies, testifying before the Florida House Subcommittee on Insurance and Banking ahead of the 2026 legislative session. Despite the rapid rise of AI in the insurance sector and claims of widespread errors and even discrimination by algorithms, insureds will be protected by existing statutes, insurance advocates told Florida lawmakers.

No Driver, No Ticket

“That’s right … no driver, no hands, no clue.”

— A post written by the San Bruno Police Department in Northern California, when they pulled over a Waymo taxi after it made an illegal U-turn, only to find no driver behind the wheel and, therefore, no one to ticket. Officers were conducting a DUI operation early Saturday morning when a self-driving Waymo made an illegal turn in front of them. Officers contacted Waymo to report what they called a “glitch,” and, in the post, they said they hope reprogramming will deter more illegal moves.