State instructs insurance coverage firms to report local weather dangers as a part of nationwide survey

The Michigan Division of Insurance coverage and Monetary Providers (DIFS) will now require insurance coverage firms primarily based throughout the state to report their climate-related dangers and mitigation methods to the nationwide local weather threat disclosure survey. 

Michigan will be a part of 26 different states who require suppliers to fill out the survey from the Nationwide Affiliation of Insurance coverage Commissioners. In accordance with an announcement from DIFS, this survey will assist insurance coverage firms and clients put together for short- and long-term local weather dangers. 

“Throughout the nation, we’re seeing extra frequent and extra extreme climate occasions, and that is inflicting some insurers to exit the market in coastal states,” DIFS Director Anita Fox stated in an announcement. “Fortunately, our climate patterns in Michigan have been extra constant, however we should be proactive to make sure that the long run outlook for Michigan’s insurance coverage market stays steady for Michigan customers and companies.”

In June, State Farm and Allstate, a few of the nation’s largest insurance coverage firms, introduced they have been pausing the sale of property and casualty protection in California, citing rising prices and wildfires as a part of their choice. Insurance coverage firms have additionally pulled out of states like Florida and Louisiana as a result of risk of climate-related disasters. 

The local weather threat disclosure survey has been carried out yearly since 2010 and covers about 80% of the nationwide insurance coverage market. The survey consists of firms with greater than $100 million in premiums throughout a number of traces together with well being, life, property and casualty insurance coverage. It additionally has sections on governance, technique threat administration, funding, metrics and requires the surveyed firms to measure their progress in decreasing local weather dangers throughout all areas of their enterprise.

In accordance with the DIFS, insurance coverage regulators in France, Switzerland and the UK require firms to file comparable studies. Monetary regulators within the U.S. such because the U.S. Securities and Alternate Fee are additionally working to require local weather threat disclosures for monetary establishments. 

“By remaining vigilant and focusing our insurers on the dangers posed by local weather change, we will help be sure that Michigan stays an important place to stay, work, and do enterprise,” Fox stated.

DIFS presents recommendation on making ready for extreme climate on its catastrophe preparedness webpage. It additionally supplies shopper safety, outreach, and monetary literacy and schooling companies for Michigan residents.