Should a State Surcharge Insurers That Underwrite Fossil Fuel Risks?

Connecticut lawmakers are considering imposing a surcharge on insurers’ premiums from the fossil fuel industry.

The proposal (SB-1115) calls for a tax of 5% of any premiums any insurer licensed in the state receives from fossil fuel companies annually.

The proceeds from the tax would be split between the Department of Energy & Environmental Protection’s Climate Resilience Fund and a Connecticut Insurance Department premium assistance program, which helps middle and low-income homeowners pay rising insurance premiums.

The bill defines a fossil fuel company as “any entity that is involved in the exploration and production of … coal, oil, natural gas, propane or any other petroleum product.” The fossil fuel definition does not include renewable biomass or waste vegetable oil biodiesel.

The Insurance and Real Estate Committee heard testimony on the measure last week.

The proposal drew cheers from environmental, climate and community groups including the Sierra Club, Public Citizen, Chisholm Legacy Project and Connecticut Citizens Action Group, while drawing jeers from the insurance and energy industries.