An Act to Require Insurers to Address Climate Risk in Their Business Activities
LD 1674, titled the “Insuring Our Communities Act,” would create a new chapter in Maine law directing the Bureau of Insurance to regulate insurers with climate risk in mind. The bill requires the superintendent to integrate the “precautionary principle” into insurance oversight and to use cost-effective measures to anticipate, prevent, or minimize climate-related harms even when scientific certainty is incomplete. It also authorizes the bureau to hire outside experts, at the insurer’s expense, to review required reports.
The bill would impose a series of reporting and conduct requirements on insurers doing business in Maine, especially larger insurers or those the superintendent determines present climate-related risk. Covered insurers would have to file annual reports on investments and underwriting tied to fossil fuel companies and projects, disclose greenhouse gas emissions associated with financing and underwriting, and publicly report progress toward science-based climate mitigation targets. The bill also requires annual commitments not to invest in or underwrite new fossil fuel projects and directs insurers to phase out underwriting for fossil fuel exploration, extraction, processing, exporting, transporting, and related infrastructure. By 2030, the superintendent would require insurers to certify that they have divested from certain fossil fuel companies and projects.
The bill would also require the superintendent to publish the reported information on a publicly accessible website and to report to the Legislature and Governor by September 15, 2026, and every two years thereafter, on supervisory actions, insurer resilience to climate change, market readiness for climate and energy transition risks, and the effects on insurance affordability and availability for disadvantaged communities. The superintendent would be authorized to adopt routine technical rules to implement the chapter.
The overall sentiment reflected by the bill text is strongly pro-climate action and precautionary regulation, with the measure framed as a response to climate risk in the insurance sector rather than a general insurance market reform. Because there are no committee transcripts or recorded votes provided, there is no documented legislative debate or vote-based sentiment to assess beyond the bill’s stated policy direction.
The main point of contention inherent in the proposal is likely the scope and timing of the fossil fuel restrictions and disclosure mandates, including whether insurers should be required to stop underwriting or divest from fossil fuel-related business and whether those requirements could affect insurance availability or affordability. The bill itself anticipates that concern by requiring the bureau to report on impacts to disadvantaged communities and on market readiness, suggesting that the balance between climate-risk reduction and market effects is a central issue.
The bill would add a new insurance regulatory framework in Maine focused on climate-risk disclosure, supervision, and fossil fuel divestment/underwriting restrictions. It would affect the Bureau of Insurance, the superintendent, and insurers meeting the bill’s coverage thresholds, including insurers with more than $10 million in direct premiums written in the state or those otherwise deemed exposed to heightened climate risk or subject to public-interest disclosure. It would also create new public reporting obligations and likely influence insurer investment, underwriting, and portfolio management practices related to fossil fuel companies and projects.
No committee testimony or vote record is provided, so there is no direct evidence of legislative support or opposition from the record supplied. Based on the bill text alone, the measure is clearly designed as an aggressive climate-policy intervention in insurance regulation, emphasizing precaution, transparency, and fossil fuel phaseout. The framing suggests support from climate-focused sponsors and likely concern from stakeholders affected by underwriting and investment restrictions.
The most notable likely points of contention are the bill’s requirements that insurers stop underwriting new fossil fuel projects, phase out existing fossil fuel-related underwriting, and certify divestment from companies tied to fossil fuel production and infrastructure. Insurers and industry stakeholders may object to the breadth of the mandates, the use of the precautionary principle, the reporting burden, and the possibility that these rules could reduce insurance availability or increase costs. The bill itself highlights another sensitive issue by requiring the bureau to assess effects on affordability and availability for disadvantaged communities, indicating concern that climate-driven restrictions could have uneven market impacts.