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These opportunities include helping communities be more resilient through inclusive and affordable
insurance, contributing to climate change adaptation and mitigation, and enhancing the insurability of
climate-related risks. To continue to thrive in the face of global competition, it is essential that New
York insurers both manage the financial risks and take advantage of the opportunities arising from
climate change.
2. The Sixth Assessment Report of the Intergovernmental Panel on Climate Change (“IPCC”) states that
“[t]he scale of recent changes across the climate system as a whole and the present state of many
aspects of the climate system are unprecedented over many centuries to many thousands of years.”
Climate-related risks present unique challenges and require a strategic response by the insurance
industry, including the acquisition of new knowledge, expertise, and tools. At the same time, general
principles and approaches of good governance and risk management laid out in the New York Insurance
Law and related regulations, and the guidance manuals of the National Association of Insurance
Commissioners (“NAIC”), apply to climate risks in the same way as other risks that may be more familiar
to insurers.
3. To support New York domestic insurers (“insurers”) in managing the financial risks from climate
change (“climate risks”), the New York State Department of Financial Services (“DFS”) solicited
comments on a proposed version of this guidance on March 25, 2021. DFS received detailed comments
from 45 parties, including industry trade groups, insurance companies, consumer advocates, climate
experts, rating agencies, financial regulators, and individual citizens. This final guidance reflects DFS’s
careful consideration of all comments received.
4. This guidance is informed by DFS’s ongoing dialogue with the insurance industry over the past year,
analysis of the potential climate risk exposure of insurers’ assets, and collaboration with international
and other U.S. regulatory bodies. This guidance also reflects DFS’s review of insurers’ enterprise risk
reports, Own Risk and Solvency Assessment (“ORSA”) summary reports, NAIC Climate Risk Disclosure
Survey responses, and other voluntarily filed disclosure materials, including Task Force on Climate-
related Financial Disclosures (“TCFD”) reports, sustainability reports, and disclosure questionnaires.
Based on this review, there is a wide range of levels of maturity and sophistication among insurers in
terms of understanding and managing climate risks, with larger insurers typically more advanced than
smaller ones, which in some cases have not yet considered climate risks.
5. This guidance builds on relevant provisions of the New York Insurance Law, NAIC Financial Condition
Examiners Handbook 2020 (“Handbook”), and NAIC ORSA Guidance Manual as of December 2017
(“ORSA Manual”). It is also modeled on publications, guidance, and supervisory statements issued by
international regulators and networks, such as the Bank of England Prudential Regulation Authority
(“PRA”), the International Association of Insurance Supervisors (“IAIS”), the Sustainable Insurance Forum
(“SIF”), the European Insurance and Occupational Pensions Authority (“EIOPA”), the European Central
Bank (“ECB”), the Network for Greening the Financial System (“NGFS”), and the Dutch Central Bank. DFS
is profoundly grateful for their work.
6. At a high level, international regulators’ expectations on managing climate risks are consistent,
including similar components, a focus on proportionality and long-term analysis, and the expectation of
an increasing level of sophistication over time. To ensure consistency across jurisdictions, international
regulators have engaged in meaningful collaboration and coordination to develop international best