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California Makes History, Calls On Insurance Companies To Divest From Coal

California is the largest insurance market in the United States and sixth-largest in the world.
Reuters

California's insurance commissioner on Monday asked all insurance companies doing business in the state to voluntarily divest from coal companies and said he will also require insurance companies to disclose their coal company holdings.

Coal use by utility companies has plummeted amid low natural gas prices and new federal regulations aimed at curbing carbon emissions, a major contributor to climate change.

Ten years ago coal produced 50 percent of the nation's power supply but now accounts for only about 35 percent, according to the U.S. Energy and Information Administration.

The lack of demand has driven the price of coal down and helped force Arch Coal Inc ACIIQ.PK, the nation's second-largest U.S. coal miner, to file for bankruptcy protection earlier this month.

"The movement away from coal and the rest of the carbon economy poses a potential financial risk to insurance companies investing in coal and the carbon economy," California Insurance Commissioner Dave Jones said.

Jones is the first state insurance regulator in the United States to call on insurance companies to divest from coal and the first to require insurance companies to disclose their investments.

California is the largest insurance market in the United States and sixth-largest in the world, with companies collecting $259 billion in premiums annually, according to the Insurance Commission.

A representative for the Property Casualty Insurers Association of America's California office, which represents insurance companies in the state, declined to comment on the commissioner's moves.

Also on HuffPost:

How Scientists Know Climate Change Is Happening
1. The unprecedented recent increase in carbon emissions.(01 of06)
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The Intergovernmental Panel on Climate Change (IPCC) highlights six main lines of evidence for climate change.

First, we have tracked (see chart) the unprecedented recent increase in the amount of atmospheric carbon dioxide and other greenhouse gases since the beginning of the industrial revolution.

Without human interference, the carbon in fossil fuels would leak slowly into the atmosphere through volcanic activity over millions of years in the slow carbon cycle. By burning coal, oil, and natural gas, we accelerate the process, releasing vast amounts of carbon (carbon that took millions of years to accumulate) into the atmosphere every year. (credit:CDIAC)
2. We know greenhouse gases absorb heat.(02 of06)
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We know from laboratory and atmospheric measurements that such greenhouse gases do indeed absorb heat when they are present in the atmosphere. (credit:EDF Energy)
3. Global temperatures are rising, and so is the sea level.(03 of06)
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We have tracked significant increase in global temperatures of at least 0.85°C and a sea level rise of 20cm over the past century. (credit:IPCC)
4. Volcanos and sunspots cannot explain the changing temperature.(04 of06)
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We have analyzed the effects of natural events such as sunspots and volcanic eruptions on the climate, and though these are essential to understand the pattern of temperature changes over the past 150 years, they cannot explain the overall warming trend. (credit:WikiCommons)
5. Earth's climate system is changing dramatically.(05 of06)
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We have observed significant changes in the Earth’s climate system including reduced snowfall in the Northern Hemisphere, retreat of sea ice in the Arctic, retreating glaciers on all continents, and shrinking of the area covered by permafrost and the increasing depth of its active layer. All of which are consistent with a warming global climate. (credit:IPCC)
6. Global weather patterns are changing substantially.(06 of06)
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We continually track global weather and have seen significant shifts in weather patterns and an increase in extreme events all around the world. Patterns of precipitation (rainfall and snowfall) have changed, with parts of North and South America, Europe and northern and central Asia becoming wetter, while the Sahel region of central Africa, southern Africa, the Mediterranean and southern Asia have become drier. Intense rainfall has become more frequent, along with major flooding. We’re also seeing more heat waves. According to the US National Oceanic and Atmospheric Administration (NOAA) between 1880 and the beginning of 2014, the 19 warmest years on record have all occurred within the past 20 years; and 2015 is set to be the warmest year ever recorded.

The map shows the percentage increases in very heavy precipitation (defined as the heaviest 1 percent of all events) from 1958 to 2007 for each region. (credit:Climate Communication)

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