Removing ESG From Insurance Act

Environmental, social, and governance (“ESG”) activists are attempting to force insurance companies to discriminate in their rates and coverage based on ESG factors and protected characteristics such as race. These activists are also trying to influence associations of insurance regulators to promote ESG factors in insurance.

States should prohibit regulators from adopting or enforcing ESG-based rules. States should also clarify that insurers may not discriminate based on ESG factors and should instead make decisions based solely on the risks being insured.

Summary: AN ACT relating to insurance risk coverage; prohibiting adoption and enforcement of ESG-based rules; prohibiting unfair discrimination based on certain factors; providing enforcement mechanisms; and providing an effective date.

Section 1. Legislative Findings

The State of [name of state] finds the following:

  1. insurance companies should make rate and coverage decisions based solely on the risk being insured;
  2. environmental, social, and governance (“ESG”) activists are pressuring insurance companies to instead make rate and coverage decisions by discriminating based on ESG factors;
  3. insurance companies are also being pressured to consider “reputational issues” of customers seeking insurance, including whether those customers have disfavored political views;
  4. ESG activists are also pressing associations of regulators to adopt or support ESG-based rules and policies;
  5. discrimination on the basis of ESG factors, political views, or other protected characteristics such as a customer’s race is immoral and unfair, and insurance companies should not withhold insurance coverage or manipulate rates as a tool to advance a political agenda; and
  6. this state should ensure that insurance companies make insurance decisions based on the risk being insured and not based on unfair discrimination and should prohibit regulators from adopting or implementing ESG-based rules.

Section 2. Unfair Discrimination

  1. The [Department of Insurance] may not adopt any rule or policy or take any enforcement action that requires an insurance provider in this state to collect, publicly disclose, or base any covered action in whole or in part on any of the following categories of data:
    1. an insurance customer’s current, past, or future greenhouse gas emissions or any goals or targets by the customer to disclose, eliminate, reduce, or offset any greenhouse gas emissions;
    2. any protected characteristics of an insurance customer’s board members, employees, suppliers, or customers;
    3. any policies an insurance customer has related to access to abortion or gender-reassignment or sex-reassignment medications or procedures;
    4. inclusion of an insurance customer on a private list of disapproved groups or persons; or
    5. he identity of any donors or contributors to an insurance customer.
  2. Notwithstanding any law or regulation to the contrary, it shall constitute a violation of [state insurance provision prohibiting unfair discrimination] when an insurance provider bases any covered action in whole or in part on any of the categories of data in subparagraphs (1) through (5) of subsection (A) of this Section.
  3. An insurance provider may file an action against the [Department of Insurance] for declaratory and injunctive relief for a violation of subsection (A). A prevailing plaintiff in an action under this subsection may recover reasonable attorney’s fees and costs.
  4. A violation of subsection (B) of this section may be enforced according to [existing state insurance enforcement provision(s)].
  5. For purposes of this Section, the following terms are defined as follows:
    1. “Insurance customer” means customer or applicant for a policy or contract of insurance.
    2. “Covered action” means any decision or process regarding:
      1. whether to offer or renew a policy or contract of insurance;
      2. the amount of premiums, policy fees, or rates charged for a policy or contract of insurance;
      3. the benefits payable under a policy or contract of insurance;
      4. the scope of a policy or contract of insurance; or
      5. any other term or condition of a policy or contract of insurance.
    3. “Insurance provider” has the same meaning as provided in [state insurance law].
    4. “Private list of disapproved groups or persons” means a list or designation, created by a non-governmental group or individual, that assigns pejorative labels including, but not limited to, “extremist,” “hate,” or “radical,” to groups, organizations, or individuals.
    5. “Protected characteristic” means any characteristic protected by [state civil rights law].

Section 3. Severability

Each section, subsection, paragraph, and portion of each paragraph of this Act is severable. If one or more sections, subsections, paragraphs, or portions of one or more paragraphs of this Act are held invalid on their face or as applied to particular facts, then the remaining portions and applications of the Act shall be given full effect to the greatest extent practicable.

Section 4. Applicability and Effective Date