California Insurance Commissioner Ricardo Lara has turned down the recent move by activists.
Activists may have thought that they had Earth Day on their side when California Insurance Commissioner Ricardo Lara considered the fossil fuel underwriting disclosure petition. However, Lara rejected the petition urging him to implement the new regulations over insurance companies.
Commissioner Lara underscored climate change as a top priority as a part of his election platform.
The petition would have required insurance companies into fossil fuel underwriting disclosure. That is, they would need to disclose the fossil fuel industry projects for which they were providing coverage.
The petition was delivered to Commissioner Lara by over 60 consumer, social justice and environmental organizations in March.
Since Lara took office at the start of the year, the new commissioner pledged to battle the climate change threat and to provide residents recovering from wildfires with assistance. He also created a new role within his team: the deputy commissioner for climate and sustainability. Equally, he used Earth Day for the launch of Climate Smart 2020, as a specific effort to decrease the carbon footprint of his own department.
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On that same day, Lara rejected the petition for fossil fuel underwriting disclosure requirements.
The petition called for the insurance commissioner to begin a rulemaking proceeding and to launch emergency regulations. These would be requirements for all insurance companies licensed for operations in California. It would require those insurers to openly disclose all investments they have made into fossil fuel-related companies, projects and other related entities, as well as all the fossil fuel-related projects and companies they have underwritten or otherwise provided insurance coverage.
The petition also reached as wide as to require insurance companies to disclose their investments into fossil fuel-related activities, projects and companies. Currently, the California Department of Insurance maintains the Climate Risk Carbon Initiative, which requires insurance companies to disclose their fossil fuel-related investments when it brings in over $100 million in premiums, said the Insurance Journal.
Insurance Commissioner Lara described his reasons for rejecting the petition. This included a need for a broader approach to fossil fuel underwriting disclosure. He also sees a stronger requirement for collaboration across the industry, climate change activists and the California Department of Insurance.