Issue of Insurance for Climate Changing

Climate change has been an issue recent years. The world becomes hotter, and hotter everyday. And we can get fresh air easily now. Pollution, glasses house effect, and so many other reasons of this changing. Usually, we call this changing as global warming. So many researchers has been studied this changing and the causes. So, is this changing will affect the insurance industry? Let's check this out.

Insurance industry groups are studying the effects of climate change on the industry.  The Geneva Association, whose members represent the world’s largest insurers and reinsurers, agreed in May 2009 to continue its CC+I research project on climate change and its economic impact on insurance. In a comprehensive report, “The Insurance Industry and Climate Change–Contribution to the Global Debate,” the Association sets out the issues and the role insurance can play in the process of adapting to the negative effects of change, particularly in developing countries.  In 2009 also, the National Association of Insurance Commissioners adopted a climate risk disclosure survey.  In February 2012, three states, California, New York and Washington State, announced they will now require companies writing more than $300 million in premium to respond to the survey. Previously only about a third of the larger companies participated. For smaller insurers, providing information on climate change risk is voluntary.  Responses will be available to the public.    

Public concern about climate change has led to litigation over carbon dioxide emissions. In June 2011 the U.S. Supreme Court said that states and conservation groups do not have the right to sue power plants to reduce emissions of greenhouse gases. That authority lies with the Environmental Protection Agency, it said. This and other lawsuits moving through the court system are based on the notion that emissions are a public nuisance. 

Public nuisance is a common law tort that imposes liability on an individual or entity that interferes with a public right—to health and safety, for example. In the past, the concept has been used in tobacco and gun litigation. But in a lead paint ruling in July 2008 in a case seeking damages from several paint manufacturers and their trade association for potential lead paint poisoning, the Rhode Island Supreme Court refused to allow the expansion of the public nuisance law to environmental and product liability cases, saying “public nuisance law simply does not provide a remedy for this harm.”

Other judges have said that public nuisance claims in such cases require the courts to make a policy decision about who should pay for global warming when almost everyone is responsible to some degree.

Furthermore, insurers are not responsible for defending their power company policyholders in court for releasing greenhouse gases because the release is not accidental but part of their ongoing business practices, the Virginia Supreme Court said in September 2011. The commercial liability policy that businesses purchase covers only accidents or, in insurance jargon, occurrences.