NAIC Adopts New Climate Risk Disclosure Standard for its Survey

The NAIC adopted at its April 7 meeting the recommendations of its Climate Risk & Resiliency Task Force to revise its Climate Risk Disclosure Survey.  As we described in our Locke Lord QuickStudy: Insurers Hit with Two Climate Disclosure Developments on the Same Day, the revisions make the Survey consistent with the international Task Force on Climate-Related Financial Disclosures (TCFD) disclosure framework.  Fourteen states and the District of Columbia require domestic insurance companies to submit the Survey.

Although insurers responding to the NAIC Survey have had the option of submitting TCFD-compliant reports for the last two years, only 28 did so last year.  The NAIC estimates that now as many as 400 insurance companies will be required to submit TCFD-compliant reports by November 30, 2022.

Insurance companies required to submit the Survey will need to develop new reporting processes and establish mechanisms to gather the data necessary to complete the reports.  A responding insurer will also need to ensure that the data, commitments and actions that they report are consistent with other information that they make publicly available regarding climate risk, such as web posts, sustainability reports, any materials designed to promote the insurer’s climate-related programs and, for public companies their SEC filings.

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