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Treasury seeks info on climate-related financial risks in the insurance sector

Agency Rule-Making & Guidance Department of Treasury Climate-Related Financial Risks Risk Management Insurance

Agency Rule-Making & Guidance

On August 31, the U.S. Treasury Department announced a request for information (RFI) seeking public comments on the Federal Insurance Office’s (FIO) future work related to the insurance sector and climate-related financial risks. The RFI is in response to an executive order issued by President Biden in May, which instructed financial regulators to take steps to mitigate, among other things, climate-related risk related to the financial system (covered by InfoBytes here). Among other things, the FIO will focus on the following initial climate-related priorities: (i) “assessing climate-related issues or gaps in the supervision and regulation of insurers, including their potential impacts on U.S. financial stability”; (ii) “assessing the potential for major disruptions of private insurance coverage in U.S. markets that are particularly vulnerable to climate change impacts, as well as facilitating mitigation and resilience for disasters”; and (iii) “increasing FIO’s engagement on climate-related issues and leveraging the insurance sector’s ability to help achieve climate-related goals.” Responses will help FIO monitor and assess the implications of climate-related financial risks for the insurance sector, and help FIO better understand how to collect “high-quality, reliable, and consistent data” required to accomplish FIO’s objectives.

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