Insurance and Climate Change column

One U.S. State May Look at Insurers’ Fossil Fuel Investments and Underwriting to Combat Climate Change

By | March 5, 2020

A Connecticut lawmaker has plans for a bill that not only calls for the state to look at which insurers have fossil fuel investments – a growing trend among government entities as of late – but also which ones are underwriting such projects.

The bill, being introduced by state Sen. Matt Lesser, a Democrat from Middletown and chair of the Senate Insurance Committee, would require the insurance commissioner to at least annually conduct a study to determine whether each insurer licensed or domiciled in the state has any investment in fossil fuels, including a coal or tar sands projects, or is engaged in underwriting for a coal or tar sands project.

The bill also calls for the commissioner to engage a third party to perform an analysis to assess each insurer’s investment portfolio for exposure to climate risk.

The Insurance Association of Connecticut has not taken a stance on the bill. Neither has the largest trade group representing the insurance industry, the American Property Casualty Insurance Association.

“It’s a study bill and we are monitoring it,” was the reply from APCIA spokesman Jeffrey Brewer when asked for a comment for this story.

Three government entities to date have passed resolutions or adopted local policy on insurance and fossil fuels.

Paris was the first to do so in 2018. Later that year the San Francisco Board of Supervisors voted unanimously in favor of a resolution to urge the city to screen insurers for their investments in coal and tar sands. Commissioners in Boulder, Colo., in February passed a resolution to screen potential county insurance providers for those that support fossil fuels without phaseout plans.

Nearly half-a-dozen government entities are considering or actively working on similar actions, according to the climate change activist group, the Sunrise Project. They include Los Angeles, Calif., New York, N.Y., Seattle, Wash., Oakland, Calif., and Cambridge, Mass.

“They are at different stages,” explained Mary Sweeters, with the Sunrise Project. “Some are actively working on a resolution or drafting policy, some are considering what local advocates are proposing to them.”

California Bond Measure

A $5.5-billion bond measure proposed in the California Senate has the goal of combating climate change by funding various environmental preservation and expansion projects throughout the state.

Senate Bill 45, also known as the Wildfire Prevention, Safe Drinking Water, Drought Preparation and Flood Protection Bond Act of 2020, would allocate the money based on environmental hazards faced in California, the LA Times is reporting.

The bill, which must pass the full Legislature to get placed on the November ballot, proposes that $2.2 billion be allocated for wildfire prevention, $1.47 billion to ensure safe drinking water, $620 million to protect fish and wildlife, $190 million for agricultural protections, $970 million to protect the coastline and around $60 million toward workforce development and education efforts, according to the article.

The bill would declare that it is to take effect immediately as an urgency statute.

“California’s changing climate creates increased risks of catastrophic wildfire, drought, floods, severe heat events, intense rain events, and sea level rise that will impact California’s residents, agriculture, water supply, water quality, and the health of forests, watersheds, fish and wildlife, our biodiversity, and our economy,” the text of the bill states.

The bill notes that investment of public funds “will result in public benefits that will address the most critical statewide needs and priorities for public funding” and save local and state agencies “billions of dollars.”


One program that has produced billions of dollars of investment in solar power and hurricane readiness across Florida, as well as what’s reported to be a reported significant cut in carbon emissions, now has a rising number of critics, who contend the program may hurt some consumers – particularly the elderly and low-income.

The Property Assessed Clean Energy program, best known as PACE, enables homeowners to borrow tens of thousands of dollars for energy-efficient or hurricane-resistant improvements to their home with no money down and no credit check required. Instead, a new type of private lending industry collects payments through property tax bills.

Many business and political leaders have embraced the program as a key to covering the cost of adapting to climate change.

However, critics contend these agreements amount to a lien on a home, and there are no state laws requiring PACE providers to explain the costs of the improvements, check if the people who sign up can actually afford to pay back the money or understand the terms, an Associated Press story in Insurance Journal this week explains.

In California, which pioneered the product, major new regulations have emerged, which include designating a state body to oversee the program and requiring lenders to make sure homeowners can afford the tax.

That’s not the case in Florida, where some local governments have begun to take action. Some Florida counties have taken steps to guard consumers against the pitfalls of the program, which has included at least one ban on all residential PACE activity.

In Pasco County, the tax collector received so many complaints about the program that his office hired someone to contact every new person who signs up and explain PACE in more detail.

In Miami-Dade, the largest PACE market in the state, the tax collector’s office shows the number of people who fell behind on their taxes after getting a PACE lien has steadily, but the total number of people in distress has hovered around 1%, the story on Insurance Journal states.

In 2018, roughly 8,000 residents had PACE liens and 103 fell behind in their taxes, while the office estimates that of the nearly 12,000 homeowners who had PACE liens in 2019, about 141 will have trouble with their taxes, according to the article.

Climate Change Australia

Climate change has increased bushfire risk by 30% or more, according to a new report.

The report is from World Weather Attribution, which can be described as an international effort to analyze and communicate the possible influence of climate change on extreme weather events.

It shows global warming boosted the risk of the hot, dry weather that’s likely to cause bushfires.

The study also suggests the figure is likely to be much greater. If global temperatures rise by 2C, such conditions would occur at least four times more often, according to the report, “Attribution of the Australian bushfire risk to anthropogenic climate change.”

The report computes the change in probability of a Fire Weather Index (FWI), extreme heat or drought as high as was observed in the 2019-20 season in the current climate compared to the climate of around 1900.

“Four climate models for which FWI could be calculated show that the probability of a Fire Weather Index this high has increased by at least 30% since 1900 as a result of anthropogenic climate change,” the report states. “As the trend in extreme heat is one of the main factors behind this increase and the models underestimate the observed trend in heat, the real increase could be much higher.”

The FWI shows a significant trend towards higher fire weather risk since 1979, according to the report.

The Insurance Council of Australia has noted that at least 20,000 claims had been filed, with insured losses reaching A$1.65 billion. These totals inevitably will rise further.

Elizabeth Blosfield, Insurance Journal’s East editor, contributed to this report.

Past columns:

Topics USA Carriers California Florida Underwriting Wildfire Agribusiness Energy Oil Gas Climate Change Australia Numbers

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Latest Comments

  • March 11, 2020 at 11:38 am
    Jon says:
    So once again, you're making blanket statements about "facts" despite a lack of evidence. How about the fact that carbon emissions on the current levels were not a part of the... read more
  • March 11, 2020 at 7:20 am
    PolarBeaRepeal says:
    You can reiterate anything you want to reiterate. Facts are facts that the Earth has cycles over LONG time periods, not decades. And the Earth has gone through ice ages and tr... read more
  • March 10, 2020 at 10:30 am
    Jon says:
    So, just to reiterate, you're refusing to provide evidence. Like you always do when you can't prove something you've been claiming as fact. Thanks.

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