Lara Rejected Petition from Over 60 Groups to Require Disclosure in 2019
LOS ANGELES, April 9, 2024 /PRNewswire/ -- Insurance Commissioner Ricardo Lara must hold insurance companies accountable for their contributions to the climate crisis by mandating disclosure of the fossil fuel projects they insure, said Consumer Watchdog today. Commissioner Lara is hosting a climate summit April 9-10 in Los Angeles.
The group renewed a call by more than 60 environmental, consumer and social justice organizations whose petition for regulations to mandate disclosure of fossil fuel underwriting and investments was rejected by Commissioner Lara in 2019. Last week, Insure Our Future reported that 12 California insurance companies that have announced coverage restrictions in the state made an estimated $3.6 billion by insuring fossil fuel infrastructure.
Read the 2019 petition and Commissioner Lara's rejection.
In refusing to even disclose fossil fuel underwriting United States insurers lag far behind Europe. With this week's announcement by Zurich, the world's 6th largest fossil fuel insurer, that it would no longer underwrite new oil and gas extraction and metallurgical coal projects, all big European insurers have stopped insuring new oil and gas extraction, according to Insure Our Future.
"Commissioner Lara can't position himself as a climate champion without making insurance companies come clean on their contributions to climate change. The insurance industry must be held accountable for pushing all of the costs of climate change onto consumers while continuing to reap billions in profits from investments in and underwriting the fossil fuel activities destroying the planet," said Carmen Balber executive director of Consumer Watchdog.
Consumer Watchdog said that insurance companies complicit in climate change should have added responsibilities for pulling us back from the brink. Lawmakers and public interest groups in Connecticut have proposed a fee on insurers that underwrite fossil fuel projects to fund disaster mitigation, a step California should follow.
The climate summit comes as insurance companies hold Californians over a barrel, with sales pauses and non-renewals that have made it increasingly difficult to access affordable home insurance in the state. However, Insurance Commissioner Lara's proposed solution to the crisis would fulfil an insurance industry wish list without guaranteeing a single new California homeowner access to coverage, said Consumer Watchdog.
Commissioner Lara announced he would deregulate key insurance consumer protections in return for a "commitment" from insurance companies to expand home insurance coverage in wildfire areas to 85% of their market share outside risky areas. Consumer Watchdog obtained documents through the Public Records Act that reveal two massive loopholes in the deal. First, insurers would be allowed to meet their commitment by offering bare bones policies – the type of policy homeowners already have access to under the FAIR Plan. Second, the commissioner could waive the "85% commitment" for any insurer that claims it cannot meet it.
View the documents obtained under the Public Records Act and an analysis of Commissioner Lara's plan here.
The Insure Our Future campaign, a national coalition of environmental, consumer and grassroots organizations, released a brief last week finding that the 'Dirty Dozen' insurers —those that have blamed climate risks for imposing coverage restrictions in California — have an estimated $113 billion of investments in and $3.6 billion in underwriting income from fossil fuels. Insure Our Future's analysis finds homeowners could lose between $9.87 to $32.1 billion in property value as a result of more than 100,000 non-renewals. Read the brief: https://us.insure-our-future.com/californias-dirty-dozen/.
SOURCE Consumer Watchdog