Treasury's Federal Insurance Office Seeks Feedback on Approach to Climate-Related Financial Risks

The Treasury's Federal Insurance Office ("FIO") requested public input to help "inform FIO’s assessment of the implications of climate-related financial risks for the insurance sector." The request for information was published in the Federal Register and follows President Joseph R. Biden's Executive Order directing federal financial regulatory agencies to develop a comprehensive strategy to reduce climate change and associated financial risks.

In the request, FIO stated that the information requested would help with FIO's focus on three "climate related" priorities:

• evaluating deficiencies in insurer regulation and supervision, and their effect on the stability of the U.S. financial system;

• determining the possibility of "major disruptions" with respect to the private insurance coverage of markets that are especially susceptible to the effects of climate change; and

• improving FIO's and the insurance sector's efforts to satisfy climate-related objectives.

FIO also stated that the feedback it receives will help it better assess the necessity for and existence of "high-quality, reliable, and consistent data" relating to the financial risks posed by climate change and how FIO could collect this data and make it available to stakeholders as needed.

FIO added that it will "issue recommendations on individual actions that can be taken by various insurance sector stakeholders (such as state insurance regulators, insurers, and policyholders) to address climate-related financial risks and facilitate the U.S. insurance sector’s transition to a more sustainable future."

Comments must be submitted by November 15, 2021.