As homeowners and businesses continue to tally losses from Hurricane Ian, the Treasury Department’s insurance division exercised its power for the first time on Tuesday to collect data from insurers on climate-related financial risks.
In the proposal, the Federal Insurance Administration gathered information from major insurance companies in every zip code across the country over the past five years to find out how climate change has made insurance affordable or inaccessible for property owners. He said he plans to identify where he is. The power to collect data on climate-related financial risks was granted under the Dodd-Frank Act of 2010, which introduced new regulations on Wall Street.
“The recent impact of Hurricane Ian on Florida demonstrates the importance of this work and the need to better understand the vulnerabilities of insurance markets,” Treasury Secretary Janet L. Yellen said in a statement. . This proposal is open for public comment for 60 days.
“This is an important new step that paves the way for a significant analysis of climate-related risks to the insurance sector that no one has ever done on a national scale,” said Graham Steele, Undersecretary for Financial Institutions at the Treasury Department. It’s a step,” he said. in a statement. This information is “important for understanding the impact on the monthly cost of living for American families, which greatly increases financial stability,” he said.
Last year, the Financial Stability Oversight Council (the group of regulators tasked with assessing risks to post-financial crisis stability) identified climate change as an “emerging and growing threat.” The federal government is working to mitigate these risks, but is facing challenges.
In July, the Federal Insurance Administration asked states to provide information on local underwriting trends to determine changes in homeowners’ insurance affordability and availability, but states did not have the information. They expect the new proposal to face some resistance, but they limited information to the past five years and Hurricane Ian, which made landfall in Florida and South Carolina in September. It sought to minimize the burden on insurers by citing recent damage by as evidence.This move is guaranteed.
On Tuesday, insurer Swiss Re said told investors The company expects to receive $1.3 billion in claims related to Hurricane Ian, leading to losses of $500 million each quarter. According to him, in 2022 there will be 15 weather and climate disasters that will hit the United States with losses exceeding $1 billion. National Environmental Information Center, and these figures do not necessarily reflect the full range of losses due to incomplete data. Hurricane Ian has the potential to be one of the most expensive of these events for him, and Florida is one of the places he finds it harder to get insurance..
Experts say pricing climate risk will become more difficult as extreme weather events become more frequent, but the Treasury Department said it could help the federal government by getting more information from insurers. says it can help them better manage climate risks.