Discussion Paper - Disclosure of Climate Change Risks for Commercial Insurers (December 2023)

Summary

This is a Discussion Paper (not yet a binding rule) in which the BMA sets out its thinking on introducing climate-related financial disclosure requirements for commercial insurers and insurance groups, built around the TCFD four-pillar framework (governance, strategy, risk management, metrics and targets). It invites industry feedback ahead of a future Consultation Paper that will set the final rules.

• Scope: Proposed disclosure framework would apply to all commercial insurers (Classes 3A, 3B, 4, C, D, E) and insurance groups regulated by the BMA.
• Content: Disclosures would follow TCFD's four pillars, be proportionate to the insurer's size/complexity, and cover underwriting, investment and operational activities; insurers concluding climate is not material must explain that conclusion.
• Metrics: Proposed core investment and underwriting metrics are set out, including GHG Scope 1, 2 and 3 emissions, total carbon emissions, carbon footprint and weighted average carbon intensity, with formulas in Appendix B.
• Phased timeline (proposed): Groups to publish first disclosure report for financial reporting periods starting year-end 2024; Class 4 and Class E insurers from year-end 2025; all other commercial insurers (3A, 3B, C, D) from year-end 2026.
• Consultation questions: The paper poses questions on scope, phasing, possible size thresholds for small classes, and timing alignment between Class 4/E insurers and Groups, seeking industry input.

No disclosure obligations are legally binding yet; this is a discussion/consultation stage only, with content unchanged from the September 2023 version except for an extended comment deadline. Responses must use the Excel response form in Appendix C and be emailed to the BMA before the stated deadline.

Key obligations

• Interested persons wishing to respond must submit comments using the Appendix C Excel response form to climaterisk@bma.bm before 15 February 2024, with the company name and 'Discussion Paper – Disclosure of Climate Change' in the email subject line.
• If the phased approach is implemented as proposed, insurance groups would need to prepare to publish their first TCFD-aligned climate disclosure report for financial reporting periods starting at year-end 2024.
• If implemented as proposed, Class 4 and Class E commercial insurers would need to begin climate disclosure reporting for financial reporting periods starting at year-end 2025.
• If implemented as proposed, Class 3A, 3B, C and D commercial insurers would need to begin climate disclosure reporting for financial reporting periods starting at year-end 2026.
• Insurers that conclude climate is not a material risk to their business would be expected to expressly state this and provide supporting reasoning in their disclosure.

Applies to

commercial insurers (Classes 3A, 3B, 4, C, D, E), insurance groups

Deadlines

• 15 February 2024: Extended deadline for industry/stakeholder responses to the Discussion Paper, submitted via the Appendix C Excel form to climaterisk@bma.bm
• year-end 2024: Proposed start of first climate disclosure reporting period for insurance Groups
• year-end 2025: Proposed start of first climate disclosure reporting period for Class 4 and Class E Commercial Insurers
• year-end 2026: Proposed start of first climate disclosure reporting period for all other Commercial Insurers (Classes 3A, 3B, C and D)