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Impact of Climate Risk on Insurance Premiums and Availability

The Law Council of Australia provided a submission in response to the Select Committee’s inquiry into the impact of climate risk on the availability and affordability of insurance premiums. The Law Council is grateful for the contributions received for this submission from the Law Council’s Climate Change Working Group, the Australian Environment and Planning Law Group1 and National Insurance Lawyers of the Law Council of Australia’s Legal Practice Section, and the Law Society of New South Wales (LSNSW).

Consistent with its Climate Change Policy, adopted in 2021,2 the Law Council encourages the proper management of climate risks, including physical impacts, transitional risks and litigation risks, through appropriate climate action. The Law Council supports appropriate legislative and policy responses relating to mitigation and adaptation.

Our response to this inquiry addresses points (a) to (f) of the terms of reference. It builds on our earlier submissions to various inquiries and consultations on the management of climate-related risks and should be read in connection with those submissions. They include:

  1. Our previous submissions to the Senate Economics Legislation Committee and the Treasury on the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill, where we expressed our support for the development in Australia of a legislative regime that mandates Climate-related Financial Disclosures (CRFD) consistently with internationally prescribed requirements for climate-related disclosures by the Taskforce on Climate-related Financial Disclosures (TCFD) and the International Sustainability Standards Board (ISSB). When established, the CRFD regime will impose legal obligations on insurance companies to manage and disclose climate-related financial risks.3
  2. Our Business Law Section’s previous submission to the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Inquiry into the impact of the practices of the insurance industry on small businesses.4

Read the full submission below.

1 We also acknowledge the contribution of Cameron Algie at Kellehers Australia Pty Ltd in the preparation of this submission.
2 Law Council of Australia, Climate Change Policy Statement, 21 November 2021, 3-4.
3 Law Council of Australia, Submission to Senate Economics Legislation Committee, Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill (online, 22 April 2024); Law Council of Australia, Submission to the Treasury, Climate-related Financial Disclosure: Exposure Draft Legislation (online, 9 February 2024); Law Council of Australia, Submission to the Treasury, Climate-related Financial Disclosure: Second Consultation – Consultation Paper (online, 2 August 2023); Law Council of Australia, Submission to the Treasury, Climate-related Financial Disclosure: Consultation Paper (online, 2 March 2023).
4 Law Council of Australia, Submission to ASBFEO, Input to ASBFEO Insurance Inquiry launched in July 2020 (online, 3 September 2020).

Last Updated on 04/09/2024

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