WASHINGTON— The U.S. Department of the Treasury’s Federal Insurance Office (FIO) today announced that it has joined the Network of Central Banks and Supervisors for Greening the Financial System (NGFS).
“FIO looks forward to working with its NGFS colleagues and to contributing to the NGFS’s important work and objectives,” said Director of the Federal Insurance Office Steven Seitz. “Because climate change presents new challenges and opportunities for the U.S. economy, FIO’s work on assessing climate-related financial risks and their effects on the insurance sector is a top priority for the Treasury Department.”
FIO’s engagement with the NGFS and its global membership will be an important element of FIO’s climate-related work. For more information on the NGFS, see here.
FIO’s outlined its three initial climate-related priorities in its Request for Information on the Insurance Sector and Climate-related Financial Risks issued in August 2021: (1) assessing climate-related issues or gaps in the supervision and regulation of insurers, including their potential impacts on U.S. financial stability; (2) 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 (3) increasing FIO’s engagement on climate-related issues and leveraging the insurance sector’s ability to help achieve climate-related goals.
To advance these priorities, FIO intends to publish a climate report by the year’s end focusing on insurance supervision and regulation, with an assessment of climate-related issues or gaps in the supervision and regulation of insurers, including their potential impacts on U.S. financial stability. In addition, the report will include an analysis of climate-related disclosures for the insurance sector. The report also may include initial analyses of selected at-risk insurance markets.
To further enhance FIO’s climate work, the Federal Advisory Committee on Insurance (FACI) today launched the Climate Related Financial Risk Subcommittee. FACI provides advice and recommendations to assist FIO in carrying out its statutory authorities. The Climate Related Financial Risk Subcommittee will support FACI in providing expert advice and recommendations relevant to FIO’s work on climate-related risks in the insurance sector. More information on FACI can be found here.