Page 23 - Insurance Times January 2024

Political risk misleading or false claims about their environmental, social
and governance (ESG) credentials. But how many of these
Africa is on the receiving end of climate change for no fault
of its own. The implications of climate change on the politics can withstand scrutiny from regulators, activist groups, or
in Africa ought to be watched when trading with it. "The opportunistic customers?" asks Reuters. Fashion, travel and
fact that few are acknowledging is that Niger's coup, like finance industries are turning out to be most vulnerable.
those in neighbouring countries, is a 'climate coup' - a crisis
Climate litigation started sporadically in the US in the mid-
born of climate impacts largely ignored by the international 1980s. It has seen an exponential growth since 2015, when
community," writes Abdoulie Ceesay in Newsweek.
the Paris Agreement on climate change was signed. While
just over 800 cases were filed in 28 years between 1986 and
India 2014, more than 1,200 cases commenced in the last eight
As the third-largest emitter of carbon dioxide globally, India's years. Out of those 1,200 climate cases, roughly a quarter
fossil fuel-driven growth trajectory is bound to have adverse originated in the past two years. Increasingly, cases are being
climate implications. It is, therefore, critical to make a rapid filed against a wide range of corporate actors, expanding
transition towards renewable energy. This process will risk the class of defendants beyond the usual suspects of oil and
fossil fuel assets becoming stranded. Any delays in corrective gas companies. Food and agriculture, transport as well as
actions will see more heatwaves, droughts, erratic rainfall, finance sectors have all seen an increase in strategic climate
flooding and sea-level rises. Rising storm activity on the west cases since 2020. Cases against private and public financial
coast must be watched and factored into risk management institutions indicate litigants' increasing focus on system-
protocols. All these are bound to impact the supply, pricing wide change. The logic is simple - if financial institutions start
and availability of insurance. factoring climate risk into their decisions, this will inevitably
increase the cost of capital for high emitters.
Siloed mindset
"As climate change litigation evolves, it is becoming a bigger
Conventional risk silos demand an urgent revisit. Climate risks
manifest as physical, transition and liability risks. Physical risk drain on company resources. Litigation is now more
targeted, while the arguments used by claimants are more
arises from physical impacts of climate-induced extreme
diverse and include themes from disclosure and
weather events. Transition risk relates to changes in
regulatory and market expectations arising from the greenwashing to fiduciary duty, consumer protection and
transition to a low-carbon economy. Liability risk emanates human rights," says Lisa Williams and Steve Bauer of Zurich
from mismanagement of physical and transition risk. Also, Insurance. "Companies need to take a holistic approach to
climate change liability and incorporate it into their controls
a new highly complex and destabilised domain of risk is and procedures, including risk and corporate governance
emerging. It includes the risk of collapse of key social and frameworks, supply chain due diligence, health and safety,
economic systems at local and global levels.
and quality control procedures."
Greenwashing, climate litigation and
Courtesy: The article has been reproduced with the
management liability permission of Mr. Praveen Gupta. The article was contributed
"Rather than making legitimate changes to their products by Mr Gupta for the blog of Chartered Insurance Institute
and processes, some businesses have relied on exaggerated, Journal, UK.https://thejournal.cii.co.uk/

LIC notifies hike in gratuity limit for agents to Rs. 5 lakh
LIC has notified an increase in gratuity limit to Rs 5 lakh from Rs 3 lakh for its agents. The increase was effected by
amending the Life Insurance Corporation of India (Agents) Regulations, 2017. These regulations may be called the
Life Insurance Corporation of India (Agents) Amendment Regulations, 2023, LIC said in a regulatory filing. The Finance
Ministry in September had approved a series of welfare measures, including enhancement of the gratuity limit and
family pension, for the benefit of LIC agents and employees.
The ministry had enhanced the gratuity limit from Rs 3 lakh to Rs 5 lakh for LIC agents aimed at bringing substantial
improvements to the working conditions and benefits for them. It also enabled the reappointed agents to be eligible
for renewal commission, thereby providing them with increased financial stability. Currently, LIC agents are not eligible
for renewal commission on any business completed under the old agency.

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