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Bank of England to intensify climate change scrutiny of insurers

FILE PHOTO: Workers emerge from Bank underground station with the Bank of England (L) and Royal Exchange building (R) seen in the City of London financial district, London, Britain, January 25, 2018. Picture taken January 25, 2018. REUTERS/Toby Melville

LONDON (Reuters) - Insurers in Britain face being tested to see how they could cope with fallout from climate change on their balance sheets, the Bank of England’s insurance regulator said on Thursday.

David Rule said the Bank was conducting “stock-take” meetings with around 10 insurers on their responses to climate change and planned to issue a policy statement later this year on follow-up actions.

“I don’t think we envisage addressing climate risk through Pillar 1,” Rule told a City & Financial conference, referring to an insurer’s mandatory capital buffer.

“We are looking more at disclosure,” Rule said.

He said that stress and scenario testing was “fertile ground” for thinking how firms assess how exposed they are to climate change.

Reporting by Huw Jones; Editing by Gareth Jones