At Hearing, Senator Warren Highlights Heightened Risk from Climate-Related Disasters, Calls for Transparency, Oversight from Insurance Industry and Regulators

Hearing

"Thank you, Mr. Chairman.

Insurance is there for natural disasters like floods, fires, or storms. But climate change means that natural disasters are hitting harder and more frequently than ever before, and that is upending the insurance market and pushing insurers out of entire cities or even entire states.

Without insurance, millions of families will be at greater risk for climate crises. And, as whole communities lose access to insurance, the impact is going to be felt all the way through our economy.

Let's talk about what some of the tools are to make some changes here. More than two years ago, President Biden issued an Executive Order telling the Federal Insurance Office (FIO), whose job it is to monitor the insurance industry, to examine the impact of climate change on private insurance in the U.S.

So FIO proposed to collect new data from insurers that would help the federal government better understand climate-related financial risk and to assess the potential for major disruptions of private insurance coverage across the country.

Mr. Heller, would the data that FIO is proposing to collect help identify the threats to consumers and the economy from climate change? Would these data be useful?"

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"Okay, so I can tell I'm talking to another data nerd. We want the numbers because they are helpful in helping us understand and assess risk. If the information is important and we need the information, the president has asked for the information, why don't we have it? This has been more than two years now. It turns out that the insurers and the regulators, state regulators, are pushing back on this. They say that collecting this information is unnecessary -- I'm just going to quote them here -- "ill-advised," and burdensome.

They've claimed that this data call would threaten so-called "existing efforts" that insurers have made to mitigate the risks of climate change on policyholders. They're even saying that the FIO and the Biden administration is "strong-arming" insurers and regulators to adopt climate-risk mitigating strategies, and that this could lead to higher compliance costs on insurers and higher premiums on Americans.

Now, it seems to me here that the insurers and regulators are going out of their way to hide information about premiums, claims, profits, and coverage. Without that information, consumers have no way of knowing if a hiked premium is justified or if it's just padding an insurance company's profits.

Mr. Heller, you explained why we need the data. So why are the insurance companies resisting so hard on providing these data? What are they trying to hide?"

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"Well, I very much appreciate the notion and I've seen nods here. I take it, Ms. Norris, that you would agree with this that we need the data and the data are essential, both for making good policy and just evaluating what the insurance companies are up to?"

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"Well, I'm all for transparency in this. I appreciate the work that you're doing here. This is just a reminder that the insurance companies have kind of been playing every part of this game. They've underwritten financing fossil fuels, and then they profit from selling protection from the impacts of those fossil fuels on climate. And now when climate risks are rising, they're trying to hang American families out to dry here and demanding either higher premiums or to get out of the market altogether. So there's a lot that's going on here that poses real risk to our economy. We need these data and we need them now. Thank you. Thank you, Mr. Chairman."

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