A new bill in the New York Legislature aims to stop insurance companies from making money on fossil fuels. The Insuring Our Future Act would prohibit insurers from writing policies for any new fossil fuel projects and mandate companies phase out underwriting of existing projects.
Within five years, the legislation would require any insurer doing business in New York to divest from companies with 10% or more revenue coming from fossil fuels as well as any individual projects.
The bill is in committee and could be taken up in the next legislative session.
“We know that insurance companies are making money off of the same things that’s hurting us, and then collecting profits on top of the hurt,” Assemblymember and bill sponsor Phara Souffrant Forrest (D-Brooklyn) told New York Focus.
Sweeping climate legislation
The legislation aims to “align insurer investment and underwriting activities with science-based climate mitigation targets consistent with the emissions limits” set by New York state law.
“The bill is among the first in the United States to address the predatory behavior of property insurers that are citing climate-driven disasters as a reason for raising homeowners’ premiums while simultaneously fueling the climate crisis by financing and underwriting fossil fuel projects,” staff at the Center for International Policy and Law wrote in a June article.
What will insurers do?
If approved, the legislation would significantly regulate insurers’ investments.
“Making insurance scarce or impossible to obtain for fossil fuel-related projects will not stop these projects from moving forward; it will only stop them from proceeding with the crucial protections provided by insurance,” Dave Snyder, vice president of the American Property Casualty Insurance Association, told Reason.
But proponents argue big action is necessary.
“There’s no real magic bullet to stopping the oil and gas beast … but to the extent that there is, it could be insurance,” Pete Sikora, climate and inequality campaigns director at New York Communities for Change, told New York Focus. “No insurance, no projects.”
What’s next?
State regulators would need to develop a way to certify insurers comply with the law’s criteria. If the bill becomes law, it would require insurers to disclose investments in companies and projects, submit financed emissions reports, and share gross underwriting information.
Souffrant Forrest filed the bill in the New York Assembly in April, which referred it to the Insurance Committee in May. She introduced it late in the state’s legislative session, which closed in June, so any advance would happen next year.
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