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Federal Register / Vol. 86, No. 166 / Tuesday, August 31, 2021 / Notices
Financial Risk emphasizes the important role that the insurance sector can play in combatting climate change.
It instructs the Secretary to task FIO to assess climate-related issues or gaps in the supervision and regulation of insurers, including as part of the Financial Stability Oversight Council FSOCs analysis of financial stability, and to further assess, in consultation with States, the potential for major disruptions of private insurance coverage in regions of the country particularly vulnerable to climate change impacts. 14
The May 20 Executive Order complements the Presidents January 27, 2021 Executive Order on Tackling the Climate Crisis at Home and Abroad, which set forth the Administrations policy to organize and deploy the full capacity of its agencies to combat the climate crisis to implement a Government-wide approach. The Presidents January 27 Executive Order puts the climate crisis at the center of U.S. foreign policy and national security and seeks to put the United States on a path to achieve net-zero emissions, economy-wide, by no later than 2050. 15
FIOs Authorities
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Title V of the Dodd-Frank Wall Street Reform and Consumer Protection Act established FIO within Treasury. FIOs statutory authorities include, among other things, monitoring all aspects of the insurance sector, including identifying issues or gaps in the regulation of insurers that could contribute to a systemic crisis in the insurance sector or the U.S. financial system. FIOs authorities also include monitoring the availability and affordability of insurance products for traditionally underserved communities and consumers, minorities, and lowand moderate-income persons.16 These segments of the population may be negatively and disproportionately impacted by climate change.17
In addition, FIO is authorized to collect data and information on and from the insurance sector, including 14 Exec. Order No. 14,030 3bi, 86 FR 27967
May 20, 2021, https www.federalregister.gov/
documents/2021/05/25/2021-11168/climaterelated-financial-risk.
15 Exec. Order No. 14,008 201, 86 FR 7619
January 27, 2021, https www.federalregister.gov/
documents/2021/02/01/2021-02177/tackling-theclimate-crisis-at-home-and-abroad.
16 31 U.S.C. 313c1AB.
17 See, e.g., Alexa Jay et al., Overview, in Impacts, Risks and Adaptation in the United States:
Fourth National Climate Assessment 2018, 36, https nca2018.globalchange.gov/downloads/
NCA4_Ch01_Overview.pdf.

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through the use of subpoenas.18 FIO is also authorized to analyze and disseminate data and information and issue reports on all lines of insurance, except health insurance.19
Because climate change is a global phenomenon, FIOs international insurance statutory authorities can help achieve U.S. goals in this area. FIO is authorized to coordinate federal efforts and develop federal policy on prudential aspects of international insurance matters, including representing the United States, as appropriate, in the International Association of Insurance Supervisors IAIS.20 Finally, the FIO Director also serves as a non-voting member of the FSOC.21 The May 20 Executive Order directs that FIO contribute to FSOCs analysis of financial stability related to climate change.22
FIOs Current Engagement on ClimateRelated Issues FIOs role and statutory authorities enable it to take a leadership position in analyzing how the insurance sector may be impacted by, and help mitigate, climate-related risks. FIO is engaging with the NAIC and state insurance regulators through their work on climate-related topics.23 FIO also represents the United States at the IAIS, is a member of the UNs Sustainable Insurance Forum, and is a member of the Organisation of Economic Cooperation and Developments Insurance and Private Pensions Committeeall of which are increasingly focused on climate-related issues. In addition, FIO is discussing climate-related issues with insurance authorities in both the United States and the European Union through the EUU.S. Insurance Project. FIO also represents Treasury in the federal Mitigation Framework Leadership Group, which is a national structure to coordinate disaster mitigation efforts across the federal government and with state, local, tribal, and territorial representatives. FIO is engaging with the Securities and Exchange Commission and other members of the FSOC on climate-related financial risks.
More generally, FIO provides insurance expertise and technical assistance within Treasury and to other federal 18 31

U.S.C. 313e6.
U.S.C. 313e1.
20 31 U.S.C. 313c1E.
21 12 U.S.C. 5321b2B.
22 Exec. Order No. 14,030 3bi.
23 See, e.g., David Altmaier, Presidential Address speech, NAIC Spring 2021 Opening Session, April 12, 2021, https content.naic.org/article/notice_
spring_2021_opening_session_prepared_
remarks.htm.
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agencies, including to the Federal Emergency Management Agency in connection with the National Flood Insurance Program NFIP. FIOs engagement on climate-related issues also includes the issuance of public reports addressing natural disasters, climate change, and insurance, including through its annual report to Congress and the President.24
FIOs Initial Climate-Related Priorities FIO intends for its climate-related work to respond not only to the Executive Orders, but also to provide an insurance-specific focus within Treasurys broader climate work, including working with Treasurys Climate Hub.25 In particular, FIO
intends to initially focus on the following three climate-related priorities:
1. Insurance Supervision and Regulation: Assess climate-related issues or gaps in the supervision and regulation of insurers, including their potential impacts on U.S. financial stability.
Maintaining the financial stability of the insurance sector will involve identifying and filling gaps if any in insurance supervision with a focus on assessing climate-related financial risks.
This will include monitoring the integration of climate-related financial risks into insurance supervisory practices and regulatory frameworks, as well as assessing whether sufficient data, methodologies, and tools exist to manage the solvency of insurers and to protect them against the long-term risk of climate change. To that end, FIO
plans to assess supervisory practices and resources, including but not limited to examination policies and procedures, solvency assessment and techniques, data availability and integrity, public disclosures, modeling, and forwardlooking assessments e.g., scenario analysis, stress testing. FIO will consult with individual state insurance regulators and the NAIC during its assessment of such supervisory practices and resources.
2. Insurance Markets and Mitigation/
Resilience: Assess the potential for 24 See, e.g., FIO, Report Providing an Assessment of the Current State of the Market for Natural Catastrophe Insurance in the United States 2015, https home.treasury.gov/system/files/311/
Natural%20Catastrophe%20Report.pdf. See also Reports and Notices, FIO, https
home.treasury.gov/policy-issues/financial-marketsfinancial-institutions-and-fiscal-service/federalinsurance-office/reports-notices providing links to all FIO Annual Reports and other reports.
25 See U.S. Department of the Treasury, Treasury Announces Coordinated Climate Policy Strategy with New Treasury Climate Hub and Climate Counselor, news release, April 19, 2021, https
home.treasury.gov/news/press-releases/jy0134.

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