Recruiter’s View

The newly formed Net-Zero Insurance Alliance (NZIA) intended to deprive the coal industry of insurance, making it impossible to secure financing.  The stated plan was to drive the entire industry out of business.  Last month, twenty-three Attorneys General explained to NZIA what U.S. federal and state laws have to say about that.

May 15, 2023 –  Attorneys General from Utah and Louisiana released a letter to the Net-Zero Insurance Alliance, c/o UNEP Finance Initiative.  Twenty-one additional Attorneys General signed on, representing other states.

The letter is worth reading.  It’s remarkably clear.
(I’ll tell you what happened in another post.)

The balance of this post contains excerpts from the nine-page letter, without comment.

Boycotts and Restricting Output

Under our nation’s antitrust laws and their state equivalents, it is well-established that certain arrangements among business competitors are strictly forbidden because they are unfair or unreasonably harmful to competition. For example, “an agreement among competitors not to do business with targeted individuals or businesses may be an illegal boycott, especially if the group of competitors working together has market power.” Likewise, collective agreements to fix prices or “restrict production, sales, or output” are illegal. This restriction extends to agreements among competitors to issue uniform pricing policies, conditions of sale, production quotas, or otherwise limit the identity of their customers if those agreements will ultimately raise prices.

Insurance Conditions Reduce Output, Increase Prices

The NZIA protocol’s “targets” and requirements appear to violate these well established laws.

…these conditions threaten to dramatically increase prices, …particularly, in the oil, gas, energy, and transportation sectors.

Insurance Coverage Not Actuarial

The… “emissions reduction targets” and “engagement targets” single out “selected clients” and place environmental conditions—not actuarial ones—on the continuation of their insurance coverage. …these “targets” against certain individuals may be an illegal boycott.

…refusal to insure based only on the insured’s carbon emissions or compliance with the Paris Agreement’s environmental aspirations could violate state laws that expressly limit reasons for refusal to provide insurance

Incentivizing Insurers To Break The Law

You may be incentivizing those insurers to break the law.  Lloyd’s of London perhaps best epitomizes these concerns.  Most companies engaged in anticompetitive conduct tend to actively conceal their intentions, but Lloyd’s brags about it…

Zurich and Munich Re Pulled Out

According to recent media reports, both Zurich Insurance Group and Munich Re have withdrawn from NZIA despite being two of the eight founding members of the organization.

We look forward to receiving your responses no later than June 15, 2023.

23 Signatures – Attorneys General

All signatories were Attorneys General.  Utah and Louisiana were first.
After that, additional signatories are listed by State, in alphabetical order.

Utah – Sean D. Reyes
Louisiana – Jeff Landry
……
Alabama – Steve Marshall
Alaska – Treg R. Taylor
Arkansas – Tim Griffin
Georgia – Christopher M. Carr
Idaho – Raúl Labrador
Indiana – Todd Rokita
Iowa – Brenna Bird
Kansas – Kris W. Kobach
Kentucky – Daniel Cameron
Mississippi – Lynn Fitch
Missouri – Andrew Bailey
Montana – Austin Knudsen
New Hampshire – John M. Formella
Ohio – Dave Yost
Oklahoma – Gentner F. Drummond
South Carolina – Alan Wilson
South Dakota – Marty J. Jackley
Texas – Ken Paxton
Virginia – Jason S. Miyares
West Virginia – Patrick Morrisey
Wyoming – Bridget Hill

-TD