Thursday, January 28, 2010
The Securities and Exchange Commission (SEC) yesterday voted to provide public companies, including insurers, with interpretive guidance on existing disclosure requirements as they apply to business or legal developments relating to the issue of climate change. In doing so, the SEC made clear it is neither weighing in on the global warming debate nor considering amending well-defined rules concerning public company reporting obligations. â€œThese rules and interpretations have served investors well for decades, and provide both the framework and flexibility necessary to apply to changing facts and circumstances. If something has a material impact on a company then it is something that needs to be disclosed â€“ that has always been the case,â€ said SEC chairman Mary Schapiro. Nevertheless, articles in the Wall Street Journal and the New York Times noted this is the first time the SEC has said that public companies should warn investors of any serious risks that global warming might pose to their businesses. In recent months there had been growing expectation that the SEC would act to require all public companies, including insurers, to disclose their climate change risks. However, the SEC guidance does not appear toÂ create new legal requirements, nor modify existing ones. Check out I.I.I. information on climate change and insurance.