• * Integrate the consideration of climate risks into its governance structure at the group or insurer entity level;  

• * When making business decisions, consider the current and forward-looking impact of climate-related factors on its business using time horizons that are appropriately tailored to the insurer, its activities, and the decisions being made;  

• * Incorporate climate risks into the insurer’s existing financial risk management, including by embedding climate risks in its risk management framework and analyzing the impact of climate risks on existing risk factors;  

• * Use scenario analysis to inform business strategies and risk assessment and identification; and  

• * Disclose its climate risks and engage with the Task Force on Climate-related Financial Disclosures and other initiatives when developing its disclosure approaches. 

The DFS  expects insurers to implement its expectations relating to board governance (Section 3.6.1), and to have specific plans in place to implement the expectations relating to organizational structure (Section 3.6.3), by Aug.15, 2022. The DFS will be hosting a webinar explaining the new guidance on Nov. 22, 2021 at 9:30-10:30  Interested parties can register here with registration password ClimChg112221.  

“Climate change is an urgent issue that poses wide-ranging and material risks to the financial system. Insurers, which are uniquely impacted as climate change affects both sides of their balance sheets, also play a critical role in managing climate risks,” said Acting Superintendent Adrienne Harris. “The guidance is intended to support insurers’ efforts to manage the financial risks from climate change, bolstering the safety and soundness of the industry and the protection of consumers.  We are grateful to all commenters for their engagement and contributions to the final guidance.”