On Earth Day, California Insurance Commissioner Ricardo Lara chose “collaboration” with the insurance industry over urgent climate action. Commissioner Lara rejected a petition from 60 environmental, consumer and social justice groups that sought to make insurers disclose the fossil fuel projects they insure. The Commissioner’s refusal to act allows insurers to keep their complicity in global warming secret, said Consumer Watchdog.
"It’s shocking that Commissioner Lara, who positions himself as a climate champion, rejected a simple step towards transparency. Every new scientific study finds the climate threat is more urgent than the last. In denying this petition, Commissioner Lara denies that urgency in favour of more talk and ‘collaboration’ with the insurance industry and refuses to acknowledge the insurance industry's role in causing global warming."
Climate change-exacerbated catastrophes are costing insurance companies billions, making extreme weather events worse and exposing the industry to financial and physical risks. The November 2018 wildfires alone, including the Camp and Woolsey fires, have caused more than $11.4 billion in insured losses, according to the California Department of Insurance.
"Insurance Commissioner Lara’s decision is a concession to the fossil fuel companies that are fueling catastrophic climate change. The insurance companies that underwrite coal, oil and gas need to be named and shamed for their short-sightedness and complicity.”
The Insurance Commissioner in California has broad authority to require insurance companies to disclose any information necessary to ensure consumers’ access to insurance and a responsibility to ensure the financial stability of the companies it oversees.
The disclosures sought by the petition would have covered all underwriting of and investment in fossil fuel projects by the 1,300 insurance companies that do business in California, the largest insurance market in the nation.
U.S. insurance companies are lagging behind their European counterparts when it comes to addressing the risks posed by fossil fuels. 22 major European insurers have divested from coal and tar sands companies and 11 have stopped or limited underwriting for the coal and tar sands industries. No major U.S. insurance company has so far pledged to divest its holdings in fossil fuel companies or restrict underwriting for fossil fuel projects.
Some insurers have begun to argue that the extreme weather events caused by climate change will make property insurance increasingly unavailable to all but the wealthiest consumers. To preserve consumers’ access to insurance, companies should be cutting ties with the fossil fuel industry, not raising prices and refusing to sell coverage, said Consumer Watchdog.
The California Department of Insurance’s Climate Risk Carbon Initiative currently requires disclosure of fossil fuel-related investments by insurance companies writing more than $100 million in premiums, but does not require disclosure of underwriting by any company, or of investments by insurance companies with less than $100 million in premiums.
The public interest organizations signing the petition include:
1000 Grandmothers for Future Generations 350 Bay Area 350 Chico 350 Conejo/San Fernando Valley 350 Maine 350 Silicon Valley 350 South Bay Los Angeles 350.org 350 Marin Alameda County Interfaith Climate Action Network Amazon Watch Asian Pacific Environmental Network Climate Resolve Coalition for Clean Air Communities for a Better Environment (CBE) Connecticut Citizens Action Group Courage Campaign Divest Invest Earthworks Filipino/American Coalition for Environmental Solidarity (FACES) Food & Water Watch Fossil Free California Fox Valley Citizens for Peace & Justice Friends of the Earth U.S. Fundacja “Rozwój TAK – Odkrywki NIE” Greenaction for Health and Environmental Justice Greenpeace Indivisible South Bay LA Market Forces Movement for a People’s Party Avaaz Azul Bay Area-System Change not Climate Change Beyond Extreme Energy Bold Alliance California Environmental Justice Alliance Californians Against Fracking and Dangerous Drilling Center for Biological Diversity Center for International Environmental Law ClientEarth Climate Hawks Vote No Coal Alliance No Coal in Oakland No Coal in Richmond No Coal Vallejo Oil Change International Presente.org Public Citizen Rainforest Action Network Rootskeeper San Francisco Baykeeper Sierra Club California SoCal 350 Climate Action Stand.earth SumOfUs.org Sunflower Alliance Sunrise Project Sustainable Energy & Economy Network urgewald Waterkeeper Alliance