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BMA issues discussion paper on climate risk disclosure

Discussion paper issued: the Bermuda Monetary Authority (File photograph)

The Bermuda Monetary Authority is asking for industry feedback about how insurers should annually disclose their climate risk exposure, mitigation and monitoring activities.

A BMA spokeswoman said: “The BMA continues to advance its work in the area of climate change by ensuring that climate change and broader environmental, social and governance risks are adequately reflected in the regulatory frameworks.

“It is also critical to ensure that such frameworks allow the local insurance sector to continue to operate prudently, competitively and sustainably.

“To achieve this goal, the BMA is soliciting industry feedback on its considerations and proposals pertaining to how insurers should publicly disclose their climate risk exposure, mitigation and monitoring activities, on an annual basis.

“Disclosures are seen to be an integral element of gaining insights into the financial impact of climate change risks and how they can guide insurers’ key strategic decisions.”

The BMA said the discussion paper aligns with its earlier work in the area of climate risk, particularly climate change surveys, amendments to the Insurance Code of Conduct and the issuance of the guidance note entitled Management of Climate Risk for Commercial Insurers.

It added that the paper seeks to align the requirements with Britain’s Task Force on Climate-Related Disclosures framework, which focuses on the four pillars of governance, strategy, risk management, and metrics and targets.

The BMA said the pillars are designed to support companies in considering, integrating and reporting on climate risks and opportunities.

Eighteen questions are posed within the discussion paper.

The spokeswoman said: “Responses to these questions are highly encouraged to help shape the approach the BMA will take on public climate risk disclosures for the commercial insurance market in Bermuda.”

The BMA said it will consider the industry’s feedback and subsequently issue a consultation paper on the proposed climate risk disclosures for all commercial insurers using the proposed phased-in approach.

The response deadline is December 15.

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Published September 29, 2023 at 7:59 am (Updated September 29, 2023 at 7:30 am)

BMA issues discussion paper on climate risk disclosure

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