The Dunleavy administration is pressuring insurance companies it’s concerned are violating Alaska’s insurance code by discriminating against high-carbon industries – including oil and gas.
The state attorney general and Alaska Department of Commerce, Community and Economic Development sent letters to four global insurers this month that said the state is conducting a “comprehensive review” of the companies’ underwriting policies. The companies include American International Group, Chubb Insurance, The Hartford and Zurich Insurance Group.
The letters say the state aims to make sure the insurers are not avoiding sectors such as agriculture, coal, or oil and gas for environmental and political reasons rather than financial ones.
Alaska law requires insurers to “base underwriting decisions on risk – not on corporate climate-policy preferences,” the letters say.
Doing the latter, they add, could harm Alaska energy development, particularly in the Arctic.
That’s become an increasingly popular argument in red states where officials have raised concerns about a recent onslaught of finance sector climate commitments. In some cases, they’ve fired back by cutting ties with those firms altogether.
“It’s definitely part of a larger trend,” said Sierra Club oil and gas campaigner Mike Scott, who used to run the organization’s Alaska campaign.
Over the last decade, banks, asset managers and insurers have announced plans to reduce, if not altogether eliminate, the carbon emissions associated with their financial business. Think: loans to high-carbon agricultural producers, or insurance coverage for an oil and gas company’s exploration project.
They’ve also set more specific commitments around particular industries and activities, including Arctic oil and gas. Some say their aim is to support the global transition away from fossil fuels, while also reducing their exposure to industries that are becoming less financially sound amid the clean energy transition.
Green groups that have pushed finance firms to make those commitments often reiterate that point.
“When you sit down in corporate boardrooms, I mean, they’re still interested in their bottom line, right? They’re thinking about the interest of their business first,” said Scott, of the Sierra Club.
But Republican lawmakers and officials at the state and federal levels aren’t convinced, and in the last several years have accused those firms of discriminating against lawful industries.
The letters to insurers zero in on their policies related to industries such as coal, agriculture and oil and gas – with special attention to Arctic energy projects.
Chubb, for instance, says it will not underwrite extraction projects in the Arctic National Wildlife Refuge. And American International Group, also known as AIG, has a policy that prohibits underwriting any new Arctic energy exploration activities.
The letters call policies of this nature “unacceptable,” adding that the state has invested years of planning and permitting into Arctic energy development.
They also argue that exclusions based on geography, or climate related goals – as opposed to financial risk – are not in line with Alaska’s insurance code.
“If insurers adopt criteria that deem entire categories of Alaskan energy projects uninsurable – despite a proven safety record and responsible operating practices – those decisions directly threaten Alaska’s economic growth,” the letters say.
The two Alaska agencies requested that the companies set up meetings to talk through the matter. Agency spokespeople did not respond to a request for comment. The four insurers also did not respond to requests for comment.
