A new mandate that property-casualty insurers disclose their climate risk does nothing more than promote global warming advocacy since insurers cannot take action against something still not understood, according to a new paper from a public policy group.

Robert Detlefsen

The National Association of Insurance Commissioners’ recently adopted rules, requiring insurance companies to disclose information related to climate change, “serve mainly to promote the ideological objectives of global warming activists,” said Robert Detlefsen. He is vice president of public policy for the National Association of Mutual Insurance Companies, an insurance industry trade group, who wrote the paper published by the Washington Legal Foundation

The reporting mandate for insurers, Detlefsen writes, “requires much more than a straightforward disclosure of discrete, identifiable risks. By demanding that insurers disclose actions they are taking in response to their understanding of ‘climate change risks,’ the survey implies that insurers ought to take concrete action in response to risks they may not understand.”

NAIC officials did not respond to a request for comment.

The author suggests that policyholders and public interest “would be better served if insurers refrained from taking action in response to things they don’t understand.” The paper cites leading climate scientists who contend that the links between global warming and specific weather-related perils, such as hurricanes, are still uncertain.

Detlefsen notes that “even if the insurance risks stemming from global warming were fully understood, it is far from clear which actions available to insurers would actually be effective in combating global warming.”

The paper examines the potential impact of the NAIC’s recently adopted “Insurer Climate Risk Disclosure Survey,” which requires all insurers with annual premium of more than $300 million to submit the completed survey to the insurance department of the state in which they are domiciled beginning in May 2010.

The survey’s eight questions appear to be derived from a set of insurer “best practices” promulgated by Ceres, an activist group that helped draft the survey and lobbied strenuously for its adoption, according to Detlefsen.

He said he fears that “mere disclosure” could lead to “harmful consequences” from “implicitly coercing insurers into pursuing an agenda that conforms to the policy predilections of groups such as Ceres.”

Though the NAIC has instructed insurers to file the survey with the insurance department of their domiciliary state, Detlefsen notes that “the decision as to whether this requirement will be enforced ultimately rests with each state insurance department.”

The Washington Legal Foundation is a law and legal public policy center.