As California Insurers Cite Climate Change to Raise Rates and Restrict Coverage, CARB Allows Industry to Avoid Disclosure
In letter to Office of Administrative Law, Public Citizen says insurance loophole must be closed; rulemaking violated notice and comment rules
WASHINGTON — As California works to implement a groundbreaking carbon emissions disclosure law, Public Citizen this week warned the state’s Office of Administrative Law not to approve an initial regulation because it violates notice and comment requirements under the law and impermissibly excludes the insurance sector.
In a letter to the Office, Public Citizen maintains that the California Air Resources Board (CARB) acted contrary to law in enacting its first rule to implement the state’s climate risk disclosure framework (SB 253, SB 261, SB 219) by excluding the insurance sector from disclosure and by introducing new material to justify the exemption without giving the public requisite time to comment. The rule package, including CARB’s “final statement of reasons,” is now making its way from the agency to the Office of Administrative Law (OAL) for final review, approval, and finalization .
Administrative law requires that the public have adequate notice and opportunity to comment on any proposed rulemaking in California. As CARB has moved through its process, it has offered contradicting reasons for exempting the insurance industry from reporting on carbon emissions. In December 2025, the board wrote in its “Initial Statement of Reasons” that it proposed exempting the industry from emissions disclosure to promote “continuity” with companion legislation SB 261. The public had adequate time to comment on this rationale and it did so, including Public Citizen.
But, at the final hearing on February 26 when the rule was adopted, CARB offered a different explanation for the exemption—avoiding duplication with reporting already required by the California Department of Insurance. The public had no opportunity to comment on this novel rationale, contrary to the principles of the Administrative Procedure Act.
“The clear intent of California’s emissions disclosure law is to require reporting from every covered entity doing business in the state,” said Clara Vondrich, senior policy counsel with Public Citizen’s Climate Program. “Yet the Air Resources Board insists it knows better. Even more troubling, they did not give the public any time to comment on their latest justification—avoiding ‘duplication’—before pushing the rule through. Exempting the insurance industry from reporting isn’t right, specifically at a moment when the industry is citing climate change as a reason to jack up prices and reduce coverage for Californians.”
As the final rules package moves to California’s Office of Administrative Law for final review, Public Citizen’s letter argues the office should return the rule to CARB with instructions to eliminate the insurance exemption.
“It is clear the law requires insurers to comply with emissions reporting requirements, just like other industries,” said Vondrich. “Why CARB is attempting to give this exemption in the first place is baffling.”
# # #