California Insurance Commissioner Launches Report and Site Outlining Insurer Fossil Fuel Investments

Article

California Insurance Commissioner Ricardo Lara on Monday issued a new report and webpage detailing insurer investments in fossil fuels.

The report is a study of fossil fuel investments by insurers, identifying insurance company holdings in green bonds that support clean energy investments and other environmental projects.

“We need more climate-focused investments to solve our climate crisis, including from insurance companies that must do more to protect consumers and the environment,” Insurance Commissioner Ricardo Lara said in a statement.

California Insurance Commissioner Ricardo Lara

Visitors to the California Department of Insurance website can type in the name of their insurance company to find out what percentage of their premiums are invested in fossil fuels.

The American Property Casualty Insurance Association, reached out to for comment, noted that insurers doubled their investments in green bonds in just one year, and that insurers have a unique role in fostering development of more green technologies and tools by making capital and protection available to industries as they transition to a lower carbon future.

Denni Ritter, assistant vice president for state government relations for APCIA, in an emailed response said the new CDI report provides useful data but that is shouldn’t be used exclusively in evaluating the climate-related investment or commitments of any particular company, nor should the report be taken as a company’s current investment strategy given the lag in reporting time cycles.

“The strength of the insurance industry and its ability to fulfill the commitments to its policyholders relies on a robust and resilient investment strategy. Each insurer incorporates its own strategy in managing their investment portfolio,” the statement continue. “This diversity of investment strategies is reflected in insurers’ governance practices, investments and underwriting decision-making process, resulting in insurers taking very different approaches to their investments and business practices. This diversity brings strength and stability to the industry overall by avoiding concentration of investment risks.”

Lara is working with other states to beef up climate disclosures at the national level. He led a bipartisan effort by the National Association of Insurance Commissioners to adopt a new global standard for reporting insurance company climate risks on April 8 in alignment with the Task Force on Climate-Related Financial Disclosures, or TCFD. Insurance regulators from France, Switzerland, and the United Kingdom currently require TCFD-aligned reports.

U.S. financial regulators such as the U.S. Securities and Exchange Commission are also taking steps toward requiring TCFD-aligned disclosures for other financial institutions.

The CDI’s new website and report are part of a “Sustainable Insurance Roadmap” that Lara is finalizing with the United Nations that includes increasing green investments, sustainable insurance products, and nature-based solutions as the core of the strategy.