Creates Joint Blue Ribbon Task Force on Impacts of Climate Change on Property Insurance.

S687 TR

SENATE, No. 687

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Senator BOB SMITH

District 17 (Middlesex and Somerset)

Senator JOHN F. MCKEON

District 27 (Essex and Passaic)

SYNOPSIS

���� Creates Joint Blue Ribbon Task Force on Impacts of
Climate Change on Property Insurance.

CURRENT VERSION OF TEXT

���� As reported by the Senate Environment and Energy
Committee with technical review.

��

An Act
creating a task force on the impact of climate change
on property insurance.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� The Legislature finds
and declares:

���� a.���� A changing climate
presents the State with more frequent risks, such as sunny day flooding, heat
waves, and more extreme risks, including wildfires, winds, storm surges, and
compound flooding from intensive storms;

���� b.��� Sea level rise is going
to make some coastal communities not only uninsurable due to increasingly
consistent flooding, but also uneconomic and unsafe for continued habitation;

���� c.���� From 2018 to 2022, the
rate at which insurers dropped homeowners property insurance policies in the
State jumped 69.54 percent from 0.47 percent to 0.8 percent;

���� d.��� Property owners want
insurance that is affordable and available, and research has demonstrated that
insured households have improved recoveries, but underpricing in high-risk
areas can further drive insurers from the market, lead to low-quality coverage,
and create perverse incentives for underinvestment in risk reduction; and

���� e.���� It is both reasonable
and necessary for the State to enable, facilitate, support, and safeguard the
provision of high-quality, comprehensive property insurance to home and
commercial property owners.

���� 2.��� a.� There is created in,
but not of, the Department of Banking and Insurance, the Joint Blue Ribbon Task
Force on Impacts of Climate Change on Property Insurance.� The task force shall
be comprised of 17 members as follows:

���� (1) the Commissioners of
Banking and Insurance, Community Affairs, and Environmental Protection, or
their designees, serving ex officio;

���� (2) two members of the Senate,
who shall not be of the same political party, appointed by the President of the
Senate;

���� (3) two members of the General
Assembly, who shall not be of the same political party, appointed by the
Speaker of the General Assembly;

���� (4) five members shall be
representatives from the private sector, specifically from an insurance
association, an insurer, a reinsurer, a real estate representative, and a
business representative, appointed by the Governor with the advice and consent
of the Senate;

���� (5) three members from
nonprofit entities, specifically a representative from a consumer advocacy
group, a planning advocacy entity, and an environmental advocacy entity,
appointed by the Governor with the advice and consent of the Senate; and

���� (6) two members from academic
institutions with expertise in climate change and insurance, appointed by the
Governor with the advice and consent of the Senate.

���� b.��� The Departments of
Banking and Insurance, Community Affairs, and Environmental Protection shall
provide staff support to the task force, and the task force shall be entitled
to call to its assistance other State department employees as necessary.

���� c.���� The purpose of the task
force shall be to assess the current and predicted impacts of climate change on
residential and commercial property insurance by analyzing:

���� (1) how the State, federal
programs such as the National Flood Insurance Program, and the insurance
industry may be subsidizing risky decision-making, keeping or putting people
and property in harm�s way;

���� (2) in which places does the
price of insurance not reflect the risk that a property faces;

���� (3) in which communities
properties are or will be uninsurable at a reasonable cost in the next 50 years
because of everyday risks such as tidal flooding or high-severity,
low-frequency events such as disasters;

���� (4) how the State will ensure
access to residential and commercial property insurance without subsidizing or
enabling dangerous or impractical location choices;

���� (5) how changes in the
insurance market and underlying physical risks, such as flooding, may impact a
municipality's current affordable housing inventory and its ability to meet its
affordable housing requirements;

���� (6) given potential changes at
the federal level impacting the availability of climate data, which alternative
sources of information may be available in the future, and how changes in the
availability of that information may impact the competition among insurers and
the ability of New Jersey communities to prepare and plan for longer-term
insurability;

���� (7) how changes in the
affordability and availability of property insurance will impact real estate
value;

���� (8) the displacement and
segregation impacts on communities in New Jersey, especially on those with low
and moderate incomes; and

���� (9) any other issues or
concerns that the task force deems relevant and appropriate.

���� d.��� Not later than one year
following the appointment of all task force members, the task force shall
submit to the Governor and, pursuant to section 2 of P.L.1991, c.164
(C.52:14-19.1), to the Legislature, a report containing a study and evaluation
of its findings and recommendations. �The report shall include, but not be
limited to, a description of any present or potential concerns related to the
impact of climate change on property insurance and whether existing State or
federal law or practices adequately address those concerns, and any
recommendations to address inadequacies in those laws or practices.� The task
force shall expire upon submission of the report.

���� 3.��� This act shall take
effect immediately.