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NAIC Releases Report Describing State Insurance Regulators’ Efforts to Manage Climate-Related Risks and Promote Resiliency
State insurance regulators play a crucial role in managing climate-related risks. They are on the front lines of natural catastrophe preparedness and response, protecting policyholders and maintaining well-functioning insurance markets. To outline the work state insurance regulators have been doing for years to regulate the industry and protect consumers, the National Association of Insurance Commissioners (NAIC) today released the report, Adaptable to Emerging Risks: The State-Based Insurance Regulatory System is Focused on Climate-Related Risk and Resiliency.
The NAIC and state insurance regulators are addressing climate-related risks through the three main pillars of insurance regulation: financial risk analysis; insurance market availability and affordability; and consumer education and outreach.
The report summarizes past, present and future programs and actions by the NAIC and state insurance regulators to help the insurance industry respond to increasing natural hazards including flooding, wildfires and extreme weather.
The initiatives focus on five main areas:
- Measuring the financial impact of climate related risks
- Identifying how carriers are managing their climate risks
- Focusing on mitigation as a way to reduce the protection gap
- Increasing consumer and stakeholder awareness
- Engaging in domestic and international partnerships
“When disaster strikes, long after the news coverage dies down and national attention turns elsewhere, state insurance regulators remain on the ground helping policyholders and local communities recover in the wake of climate-related loss. This is personal for NAIC members. They are part of the communities where these events take place,” said Mike Consedine, NAIC CEO. “This report details progress we have made and highlights the work that still needs to be done. The NAIC and state insurance regulators are committed to keeping pace with the challenges, leveraging existing tools and creating new ones, working together to address climate-related risks domestically and internationally.”
About the National Association of Insurance Commissioners
As part of our state-based system of insurance regulation in the United States, the National Association of Insurance Commissioners (NAIC) provides expertise, data, and analysis for insurance commissioners to effectively regulate the industry and protect consumers. The U.S. standard-setting organization is governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer reviews, and coordinate regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally.