Jimmy Patronis slams ESG regulations, recommends Office of Insurance Regulation to investigate

by | Aug 23, 2022

 

  • Florida Chief Financial Officer Jimmy Patronis on Tuesday spoke out against Environmental, Social, and Government (ESG) regulations that influence insurance coverage and cost
  • Patronis also recommended that the state Office of Insurance Regulation investigate the role of ESG metrics in the insurance market 
  • ESG metrics have been used by investors to assess a business’ sustainability and ethical impact in regard to factors like carbon emissions and environmental sustainability

During a Florida Cabinet meeting on Tuesday, state Chief Financial Officer Jimmy Patronis spoke out against “ESG” standards, otherwise known as Environmental, Social, and Government regulations.

Patronis said the state entity charged with regulating insurers, the Florida Office of Insurance Regulation (FOIR), must assess the role of ESG in insurance markets, so Florida can better fight back.

“I believe ESG is un-American because global asset managers are using the woke-standards, to reengineer society, through billion-dollar industries,” said Patronis. “It’s undemocratic. Moreover, it appears it’s not confined to equities alone. It looks like insurance markets are beginning to write coverage based on ESG criteria. As Florida is doing a lot of great work, I believe that we should be engaging the Office of Insurance Regulation to assess ESG’s role with insurance. We need to fight ESG within the insurance markets because it’s another theater of battle.”

ESG stands for the three critical variables that are used to evaluate a business or company’s sustainability and ethical impact. ESG indicators are increasingly being used by investors to assess the social and environmental worth of the business or company they are interested in.

Among the non-financial performance indicators, the environmental, social, and governance elements are a subgroup that includes ethical, sustainable, and corporate governance challenges including making sure that procedures are in place to guarantee accountability and controlling the corporation’s carbon impact.

The shift in evaluation has some experts worried, however. According to PricewaterhouseCooper, 49 percent of insurance CEOs say their company does not have the ability to measure their greenhouse gas emissions today, despite the Security and Exchange Commission’s proposal for new climate disclosure requirements.

“That means a lot of woke businesses will get better insurance products, while others who ignore ESG criteria, may not get any coverage. All of this means if you’re not woke enough, certain insurers will not cover you,” continued Patronis. “Meanwhile, as certain insurance companies have joined the cult of ESG, Florida is experiencing a hardening insurance market. If insurance companies are charging a premium for ESG, then we need to know about it. We know that asset managers are telling insurers to focus more on climate change, or they’ll lose money, or be sued. Or both.”

Patronis in a release cited a PricewaterhouseCooper expert that alluded to property insurers working to influence how governments react to mitigate and monitor drivers of climate risk. In doing this, the expert stated that insurers could plan to raise rates, reduce comprehensive coverage, and influence government policy.

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