CBI proposes a more focused approach to measure availability and affordability of insurance in the context of climate related catastrophes.
The President’s Executive Order 14030 (Climate Related Financial Risk) directs the Secretary of the Treasury to “direct the Federal Insurance Office to … assess, in consultation with States, the potential for major disruptions of private insurance coverage in regions of the country particularly vulnerable to climate change impacts.”
In response, FIO intends to collect data from the insurance industry in order to study the effect of climate-related catastrophes on insurance availability and affordability. Specifically, FIO intends to collect 5 years of policy and claims information from 80% of the homeowners’ insurance market.
In the attached comments, CBI proposes that an even more targeted data collection directed toward the insurance industry’s “relief value” mechanisms (residual market facilities, surplus lines insurance, and guaranty funds) would allow FIO to gain far deeper insights into changes in availability and affordability over a longer period of time while collecting less data and data that is readily available from fewer respondents.
CBI’s comments are available → here.