July 26, 2017
Contact: Richard Loconte, 212-709-1691
DFS SUPERINTENDENT VULLO URGES INSURERS TO PROMOTE GREEN PRACTICES TO PROTECT THE ENVIRONMENT
DFS Encourages Insurers to Promote Environmentally Friendly Practices Among Their Customers To Help Combat Climate Change
Urges Insurers to Develop and File Programs and Rules Related to Energy Efficient Equipment and Devices for Insurance Premium Discounts
Requests Participation in DFS Climate Risk Disclosure Survey to Help Insurers Identify Short- and Long-Term Exposures to Climate Change
Building on New York State’s commitment to take aggressive action on climate change, Financial Services Superintendent Maria T. Vullo is urging insurers to promote, adopt, manage, and maintain practices to protect the environment. In a circular letter issued today, the Department of Financial Services (DFS) is encouraging all life, property and casualty, and health insurers authorized to do business in New York to promote their customers’ compliance with clean energy and environment-friendly practices, while managing their own corporate resources to combat the negative effects of global warming and climate change. In addition, insurers are urged to participate in an annual Climate Risk Disclosure Survey to identify the short-term and long-term exposures they face from the myriad ways climate change affects financial, underwriting, and operational strategies.
“Rising global temperatures and their effect on the world’s climate have affected our nation in many ways and the insurance industry is well-positioned to help,” said Financial Services Superintendent Vullo. “Unusual weather patterns, severe storms and flooding, and coastal beach erosion show that climate change is real and must be addressed to protect our planet and New York’s economy. New York calls on the insurance industry to assist in this important effort to address the economic effects of climate change and influence potential solutions.”
DFS urges insurers to promote customers’ compliance with clean energy and environment-friendly practices. Policyholders that invest in energy efficient equipment and devices might simultaneously reduce potential loss exposure that can be reflected in lower insurance premiums. Insurers are encouraged to develop and file programs and rules in respect of such equipment and devices for insurance premium discounts.
DFS suggested the following examples of measures for which property and casualty insurers should consider offering incentives to automobile and home owners insurance policyholders:
- Purchase of hybrid and electric vehicles
- Vehicles with efficient engines/power trains that achieve superior fuel economy
- Use of telematics devices and participation in usage based insurance programs, in each case only where the device or program has been approved by the Department of Financial Services
- Verified reduction of vehicle usage by policyholders
- Upgraded HVAC systems or water heaters that earn superior Energy Star ratings
- Conversion from oil to natural gas or geothermal heating systems
- Installation of solar panels
- Installation of programmable thermostats or Smart home devices
DFS also encouraged all insurers to manage their own resources prudently, which can have a positive effect on the environment and on their bottom line. Examples include:
- Implementing rigorous recycling programs in offices and throughout operations
- Conserving energy in offices and physical plants, and deployment of energy efficient vehicles in vehicle fleets
- Identifying potential exposure to climate related risk in corporate and financial operations
- Reducing the use of paper in daily operations, and conversion to a paperless environment to save natural resources
- Using electronic file systems and digital storage to save space and energy.
- Managing risk as an integral part of underwriting activities by assisting and encouraging policyholders in developing and practicing prudent risk management in their personal and corporate conduct
New York State is at the forefront of addressing climate issues. Following the U.S. decision to withdraw from the Paris Climate Change Accord, Governor Andrew M. Cuomo signed an executive order to commit New York to uphold the standards set forth in the Paris Accord and announced a U.S. Climate Alliance, along with California Governor Edmund G. Brown Jr., and Washington State Governor Jay R. Inslee, to convene U.S. states committed to upholding the Paris Climate Agreement and taking aggressive action on climate change. He also announced the Clean Climate Careers initiative, a multi-pronged strategy, in partnership with the ILR School"s Worker Institute at Cornell University and Climate Jobs NY, to grow New York"s emerging clean energy economy and prepare the workforce for the long-term careers associated with this industry.
A copy of the circular letter sent to insurers can be found here.