Can homeowners data drive
greater understanding of climate risk and the economy?
Predictably, the data collection effort languished for
years, and no one should expect bold and righteous action this year.
By Kevin P. Hennosy
On March 31, 2026, Public Citizen, the Washington, D.C.-based consumer advocacy group, leading a coalition of 49 public-interest groups, issued a news release lauding the launch of an effort “to collect homeowners insurance market data from across the country, potentially culminating in the publication of some of the most granular pictures of how climate change is impacting insurance markets across the country.”
The tone of the announcement is chipper and full of hope. Of course, being chipper and full of hope does not always equate with being realistic.
It is also true that Public Citizen may know something that this grizzled-old commentator on insurance public policy does not. There are so many moving parts and countervailing forces inherent to an endeavor such as this one, and better angels do not always win.
We should also consider the wisdom of Mark Twain who famously popularized a quote that he said he borrowed from British Parliamentarian Benjamin Disraeli, who observed, “There are three kinds of lies: lies, damned lies, and statistics!”
Even the Public Citizen announcement hedged its bets by describing the effort as “potentially culminating” in success. Such success will come only when the effort is pursued with courage, resolve, and perseverance, or grit.
At the beginning of Joel and Ethan Coen’s 2010 film interpretation of Charles Portis’s 1968 novel True Grit, the directors opened the film with a Bible quotation: “The wicked flee when no man pursueth … .” The quote from Proverbs 28:1 adds emphasis to the film’s themes: injustice, vengeance, imperfection, and cowardice.
Oddly enough, the Coens did not include the second half of the verse, “but the righteous are as bold as a lion.”
In Portis’s novel, the vengeful 14-year-old daughter of a murdered man righteously rallies two bounty hunters to track down the cowardly killer of her father. The man-hunters were imperfect, but they acted with boldness and did something.
Who are the consumer advocates counting on to pursue data on climate change boldly and righteously and with true grit? Who deserves that large helping of hope? Surprisingly, Public Citizen placed its hope in the historically imperfect National Association of Insurance Commissioners (NAIC).
Good luck with that.
The NAIC has already described the aims of the Homeowners Insurance Data Call in its 2026 committee charges:
Develop a national analysis report, for regulators only, with support from CIPR. Consider the nature and extent of such national analysis report that may be suitable for public release. [The CIPR, or Center for Insurance Policy and Research, is a division of the NAIC.]
Public Citizen’s news release described the NAIC’s project as “potentially culminating in the publication of some of the most granular pictures of how climate change is impacting insurance markets across the country.”
One needs to squint quite a lot when reading the NAIC charge to find any suggestion of something beyond a regulators-only report followed by a “weak-tea” publication for non-regulators.
There has been extraordinarily little “affirmative regulation” (i.e., looking for trouble) as the late Senator Joseph O’Mahoney of Wyoming called for when he brokered the legislation that became the McCarran-Ferguson Act in 1945. That law lends the states a chance to use Congress’s Constitutional authority over insurance.
Since about 1995, the state-based system of insurance regulation has displayed all the grit one would expect to see displayed by the average sock puppet.
Yet, Public Citizen seems to believe that it hears a faint rumble in the distance suggesting the movement of parts that have not moved in an exceptionally long time.
Federal source
This story begins a couple of years after the last predictable collapse of Wall Street in 2007-2008.
Following that financial debacle, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank). One provision of that act created the Financial Stability Oversight Council (FSOC) in the Treasury Department.
Congress charged the FSOC with looking for and responding to emerging threats to the stability of the U.S. financial system—a reasonable expectation for an office of the U.S. Treasury department, which is charged with protecting the faith and credit of the nation.
In October 2021, FSOC published a report on threats to financial stability posed by climate change. In that report, the FSOC observed: “[C]limate change is an emerging threat to the financial stability of the United States.” In short, it’s a national and international issue that clearly falls under the jurisdiction of the Federal government.
The FSOC first discussed climate-related financial risks at its March 2021 meeting, at which members highlighted a broad set of work underway or beginning at individual agencies and organizations.
One of those agencies was the Federal Insurance Office (FIO). Congress created the FIO to monitor all aspects of the insurance business and “fill regulatory gaps.” So, the FIO is supposed to be a forward-leaning organization looking for trouble, but too often the office has behaved like Hamlet—the prince who could not make up his mind.
What are regulatory gaps? Cast your mind back to when AIG used a jurisdictional smokescreen to hide behind selling insurance by another name on debt instruments in the early years of this century. The resulting regulatory gap allowed the “World’s Largest Insurer” to collapse under the weight of risk from those debt-related risks.
Following the federal bailout of AIG, the regulatory gap remained open. An officer of the NAIC testified under oath at a congressional hearing that AIG was not an insurance company, so state insurance regulators did not have jurisdiction.
Trying to prevent that kind of foolishness from crashing the economy again is the reason the FIO exists. To complete its charge to monitor the insurance sector for regulatory gaps, the office holds authority to collect data from the insurance sector. This authority includes data to measure whether insurance activities might deserve attention from the FSOC as risk to the financial system.
Furthermore, that authority extends to measure the extent to which traditionally underserved communities and consumers, minorities, and low-and moderate-income people have access to affordable non-health insurance products.
These data collection and analysis activities are not seen as regulation per se, although if the FIO identifies regulatory gaps it does have the authority to act. The FIO has been slow to use that power.
Parochialism unleashed
On May 20, 2021, then-President Biden signed Executive Order 14030, entitled Climate-Related Financial Risk. The pertinent part of the order to insurance reads as follows:
(b) The Secretary of the Treasury shall:
(i) direct the Federal Insurance Office to assess climate-related issues or gaps in the supervision and regulation of insurers, including as part of the FSOC’s analysis of financial stability, and to further assess, in consultation with States, the potential for major disruptions of private insurance coverage in regions of the country particularly vulnerable to climate change impacts … .
I
That troubling phrase—in consultation with States—set up the Treasury Department for failure. The phrase handed a veto on the Treasury’s actions to any state jurisdiction to where officials possess parochial or prejudicial interest in scuttling investigation into climate change.
In other words, the executive order cast aside a basic tenet of the U.S. Constitution, which assigns responsibility for issues of national and international importance to the national government. Say “hello” to the famously flawed system of state-by-state parochialism of the Articles of Confederation.
Parochialism brings us back to the NAIC and why the FIO should not be relying upon it. The NAIC is nothing more than a Delaware-chartered corporation, best known in recent decades for its own dodgy financial reporting practices.
Nevertheless, in Spring of 2024, the NAIC signed an agreement with the FIO for the purpose of the former providing the latter with standardized data on Homeowners Insurance. What could go wrong?
In May of 2024, recognizing the opportunity for pretense in the Data Call process, 24 members of Congress signed a letter that called for the attention of the FIO and the NAIC. Representatives and Senators warned both entities against engaging in statistical shenanigans of the kind referred to by Twain and Disraeli.
Kabuki dance
Instead of exerting the effort to use its own authority for data collection, the FIO entered a Kabuki dance with the NAIC. Predictably, the data collection effort languished for years, and no one should expect bold and righteous action this year.
In some of the very states most pummeled by extreme weather conditions driven by climate change, the political leadership prides itself in denying what their eyes see. The NAIC cannot overrule these politicians, so there is no reason to hope that the NAIC’s efforts will “potentially culminat[e] in the publication of some of the most granular pictures of how climate change is impacting insurance markets across the country.”
It is a safe bet that the NAIC does not have the grit necessary to expose the gaps in regulation created by those jurisdictions. It also appears to be a safe wager that the FIO or Treasury Department lacks the grit to pursue its charge without the NAIC.
Why would an office of the Treasury Department choose to rely upon a private corporation that commands no statutory authority in any jurisdiction on the planet colloquially known as Earth? Terms like “feckless” and “cravenness” come to mind.
Defenders of the FIO will argue that its staff lacks technical experience and knowledge to complete collection and analysis of insurance data.
Which begs the question: Why not? Congress created the FIO in its current form more than 16 years ago, yet the office still lacks the expertise to do its job.
This explains why the most bent state regulators in the country are organizing to convince Congress or the Administration to shut down the FIO while the office is still weak and timid—before the FIO becomes empowered to fill the gaps in insurance regulation.
Lions?
The Public Citizen news release cited in the beginning of this column may simply be a ruse to appear supportive of the NAIC in the hopes of a more serious Data Call exercise in the future.
Two days after the Public Citizen news release was published, Carly Fabian, a policy advocate with Public Citizen, was quoted by an online publication called Inside EPA Climate Extra, observing: The NAIC “really dropped the ball here, and what they’re doing falls short of what they could have done and what they need to do.”
Ms. Fabian was correct.
So let us return to the novel True Grit, this time to understand the fabulous world of insurance regulation. Consider the two manhunters.
In True Grit, the young Texas Ranger LaBeouf represents an organization created in a lawless territory that lacked professional law enforcement. LaBeouf is full of swagger and braggadocio but is dependent on others to believe in his superiority to act—like the NAIC.
U.S. Marshall Cogburn is a federal official with authority to pursue wickedness across state and territorial lines, but he lacks the discipline and resolve to use that power, like the FIO.
Furthermore, the quote from Proverbs partially used in the Coen Brothers’ movie seems to apply: “The wicked flee when no man pursueth; but the righteous are as bold as a lion.”
We have yet to hear a lion’s roar.
The author
Kevin P. Hennosy is an insurance writer who specializes in the history and politics of insurance regulation. He began his insurance career in the regulatory compliance office of Nationwide and then served as public affairs manager for the National Association of Insurance Commissioners (NAIC). Since leaving the NAIC staff, he has written extensively on insurance regulation and testified before the NAIC as a consumer advocate.
