New Jersey Requires Insurers to Publicly Disclose Climate Risk Information

The state joins 26 others in implementing the Climate Risk Disclosure Survey

TRENTON, NJ - The New Jersey Department of Banking and Insurance announced today that certain insurance carriers operating in the state will now be required to publicly disclose their strategies for managing and preparing for the increasing impacts of climate change.

The Climate Risk Disclosure Survey will be the main tool used to collect this information, offering insights into the risks and opportunities associated with climate change that insurers face. This will provide valuable data for the department to assess insurers' activities and risks.

The initiative aligns with Governor Murphy's commitment to leading the fight against climate change and reducing environmental harm, according to Justin Zimmerman, the Acting Commissioner for the New Jersey Department of Banking and Insurance.

"Joining states from across the country in this important effort will provide us with additional regulatory tools to protect New Jersey consumers. The initiative will improve the transparency of insurers’ business activities and enhance the department’s ability to assess insurers' preparedness and resilience to climate-related risks," Zimmerman stated.

New Jersey is the 27th jurisdiction in the United States to implement the National Association of Insurance Commissioners’ (NAIC) Climate Risk Disclosure Survey. This survey aligns with the Task Force on Climate-related Financial Disclosures (TCFD), which sets the international standard for climate risk disclosure.

The results from the survey will provide crucial insights into the extent to which insurers are considering climate change in their financial stability and business models. The collected data will inform understanding of insurers’ underwriting guidelines and policy pricing, as well as the department's ability to assess potential risks and losses.

All insurance companies licensed in New Jersey and that recorded direct written premium amounts exceeding $100 million nationwide in 2022 must complete the survey by August 31, 2023. Insurers who are required to respond to a similar survey by another state or jurisdiction can instead respond to that state or jurisdiction.

The initiative is led by the California Department of Insurance, and the responses to the Climate Risk Disclosure Survey will be made available to the public on California’s Department of Insurance website. More information about the survey can be found on California's Department of Insurance Climate Risk Disclosure website.