Senior Financial Protections
Many states have implemented special rules to ensure that seniors and other potentially vulnerable people are protected from wrongdoers whose interest is in taking seniors’ money, instead of serving them with products that a suitable for them. These are known colloquially as elder financial abuse laws, which increase punitive damage penalties for anyone who takes advantage of the elderly or disabled in a financial transaction. Transamerica supports a federal safe harbor that would encourage financial firms to train and equip their employees to spot financial fraud and take steps to stop it.
Transamerica believes that governments, companies, and investors have a responsibility to mitigate climate change and its impacts, and to facilitate a transition to a climate-resilent economy. Emerging climate-related insurance regulation should be informed by the following principles.
First, climate-related regulation should differentiate by sector. Climate change presents different risks to different sectors of the insurance industry. Property-casualty insurers may be directly exposed to the direct physical effects of catastrophic weather events, while life insurers such as Transamerica are primarily exposed via indirect credit risk impacts resulting from physical risk and/or the anticipated transition to a climate-resilent economy.
Second, climate-related regulation should promote improved information across all industries. For life insurers, an accurate assessment of climate-related financial risk impacts is currently impeded by the absence of climate-related data of issuer companies, including a consistent definition and measurement of carbon footprint, and uniform disclosures. Transamerica supports consistent disclosure across all industries and sectors.
Third, climate-related regulation should promote uniformity, seeking to minimize operations burdens. As work on climate proceeds simultaneously on many fronts, we have a growing concern about the potential for burdensome, duplicative, and resource-intensive requirements from various bodies. International standards that foster alignment of supervisory and regulatory approaches provide one solution. Another solution is for authorities to defer to the standards of the group's jurisdiction. Overly granular disclosures should also be avoided.
Finally, regulatory expectations should acknowledge that the aspirational may not be currently achievable. The measurement and modeling of climate risk is at an early stage. It would be unwise for supervisors to impose requirements that assume that tools and sufficient data sets exist for climate-related financial risk to be associated with the rigor and accuracy of the measurement of traditional insurance risks. It would also be prudent for any suggested timelines to reflect a gradual maturing and capacity-building within the insurance sector.