b'TABLE OF CONTENTSThe most important of these steps was the issuanceFinally, several bills are currently being considered by President Biden in May 2021 of an executive orderby the US Congress which address climate-related on climate-related financial risk, which mandated arisk, including (1) the Build Back Better range of federal studies to analyze the risks thatreconciliation bill, which includes President Bidens climate change poses to the US financial system andpolicy priorities, including the $555 billion for lays the groundwork for eventual policy changes ininitiatives to combat climate change and promote this space. The order specifically directs the FIO toclean energy production and resilience investments 2assess climate-related issues or gaps in insuranceand (2) the Disaster Mitigation and Tax Parity Act, supervision and the potential for major disruptionswhich, if enacted, would ensure that state-based of insurance coverage in regions of the countrydisaster mitigation grants receive the same federal particularly vulnerable to climate-related impacts. Intax exemptions as federal mitigation grants. 3connection with this directive, the NAIC submitted a comment letter in response to the FIOs request forDevelopments at the NAICinformation, which underscored the long history of state insurance regulators working to assistAt the NAICs Fall National Meeting in December consumers and protect policyholders while2021, the Climate and Resiliency (EX) Task Force maintaining well-functioning markets. (C&R Task Force) met and, among other topics, discussed two particularly potentially Further, certain Federal agencies have beenimpactful developments in the space of climate-particularly focused on climate-related risks andrelated risk management and disclosure.attendant disclosures. For example, in October 2021, the Financial Stability Oversight Council (FSOC)First, the Technology Workstream of the Committee released its Report on Climate-Related Financialexposed a proposal for the Center for Insurance Risk, which included several policy recommendationsPolicy and Research (CIPR) to create a to build capacity and expand efforts to addressCatastrophe Model Center of Excellence (COE). climate-related financial risks, fill data gaps, enhanceThe proposed COE would function as a permanent public climate-related disclosures and assesssupport group to provide the NAIC and state climate-related risks to financial stability. Ininsurance regulators with the necessary technical connection with these recommendations, the FSOCexpertise, tools and information necessary to intends to form two new committees to helpeffectively regulate insurers and reinsurers that financial regulators better understand climate- exposed to catastrophic events in order to promote related risks to the financial system. In addition, thea secure and stable insurance marketplace.Securities and Exchange Commission (SEC) remains focused on climate risk disclosure, and the2The Build Back Better Reconciliation bill has passed the US chair of the SEC has directed the agencys staff toHouse of Representatives but not the US Senate.develop a mandatory climate risk disclosure3The Disaster Mitigation and Tax Parity Act was introduced by proposal for consideration by early 2022. Senator Dianne Feinstein (D-CA) and Representative Mike Thompson (D-CA) in July 2021.MAYER BROWN |85'