NYDFS Issues Guidance For Insurers On Climate Change-Related Financial Risks

The New York State Department of Financial Services ("NYDFS") issued final guidance on how domestic insurers should address material climate change-related financial risks.

The final guidance reflects NYDFS's consideration of stakeholder comments from its March 2021 proposal, and collaboration with domestic and international regulatory bodies.

In the guidance, NYDFS expressed, among other things, its expectation that insurers acquire the "new knowledge, expertise, and tools" to:

• incorporate into their governance structures, either "at the group or insurer entity level," climate risk considerations;
• assess current and future climate-related implications on their operations through "time horizons that are appropriately tailored" to their business;