NAIC Addresses ESG in Insurance
The National Association of Insurance Commissioners (NAIC) has ratified the NAIC Statement on Environmental, Social, and Governance Policies for the insurance sector.
The statement, unanimously adopted by members, reflects the following stance:
In recent times, Environmental, Social, and Governance policies (ESG) have garnered increasing attention and scrutiny within the financial sector, regulatory bodies, and stakeholders both nationally and globally.
Addressing queries regarding the relevance of ESG policies to the U.S. insurance sector and its oversight, the NAIC, comprising the primary insurance regulators from all 50 states, the District of Columbia, and the five United States Territories, offers the following perspective.
The NAIC does not foresee the formulation of regulatory measures mandating or prohibiting insurance companies from embracing ESG policies governing underwriting, investments, or other business decisions.
However, ongoing efforts are dedicated to examining climate risk, race and insurance, corporate governance, and other pertinent factors directly associated with its duty to safeguard policyholders and oversee insurers' financial well-being.
Encouragement is extended by the NAIC to insurers, regulatory bodies, standard setters, and policymakers to assess the reliability of metrics and the implications of ESG policies on insurers' financial stability, as well as the accessibility and affordability of insurance products and services, should such policies be adopted.
The NAIC extends an invitation and encouragement to legislators, policymakers, and stakeholders to engage with state insurance regulators when contemplating ESG-related legislative initiatives or executive actions to explore the potential ramifications of proposals on the solvency and financial resilience of the insurance sector.
Committed to fostering an open dialogue, the NAIC is dedicated to providing a platform for its members and stakeholders to address significant issues, including ESG considerations, which may influence our sector.
The evolution of this statement on ESG stemmed from discussions initiated by state insurance commissioners in recent years, prompted by feedback and engagement from diverse stakeholders and the public.
Source: NAIC
