SEC Scraps Climate Disclosure as P&C Reporting Fragments Across State, Federal, and EU Regimes

From reviewing climate risk sections across the 10-K filings of every top-25 P&C carrier, the variation in depth and methodology is already striking even with the federal rule alive; without it, the dispersion will only widen. On May 29, 2026, the Securities and Exchange Commission voted to propose the full rescission of its 2024 climate-related disclosure rules, calling them "unsound as a matter of policy" and a "dramatic overreach" of the Commission's statutory authority. The proposal, published in the Federal Register on June 3, estimates annualized cost savings of approximately $4.9 billion per year over ten years across all affected registrants.

For P&C carriers, the rescission does not eliminate climate disclosure obligations. It eliminates the unified federal framework that would have standardized them. What remains is a fragmented compliance landscape: California's SB 253 emissions reporting (enforceable, with an August 10, 2026 first-year deadline), the NAIC's TCFD-aligned Climate Risk Disclosure Survey (covering 15 participating states), RBC climate scenario interrogatories requiring hurricane and wildfire projections through 2050, and the EU's simplified but still binding Corporate Sustainability Reporting Directive for carriers with European operations. Each framework has different scoping thresholds, different reporting timelines, and different assurance requirements. None of them talk to each other.

Trade press has covered the SEC rescission as a political story. This article maps the specific actuarial and ERM implications for P&C carriers navigating a fragmented state, federal, and international climate disclosure landscape.

What the SEC Rule Would Have Required

The SEC adopted its climate-related disclosure rules on March 6, 2024, by a 3-2 vote. The rules mandated that public companies disclose detailed greenhouse gas emissions (Scope 1 and Scope 2), climate risk management practices, scenario analysis and internal carbon pricing, transition plans and climate-related financial statement effects, and third-party attestation for large accelerated filers on a phased-in basis. Compliance was scheduled to begin for fiscal years starting in 2027.

Legal challenges were immediate. Multiple states and business groups filed petitions across six federal circuit courts, consolidated before the Eighth Circuit Court of Appeals in Iowa v. SEC. The SEC stayed the rule's implementation on April 4, 2024, and the rules never took effect.

The timeline that followed illustrates the rule's slow collapse. On March 27, 2025, the SEC voted to end its defense of the rules. In September 2025, the Eighth Circuit placed the petitions in abeyance, effectively telling the Commission to either defend the rules or start a formal rulemaking process to rescind them. On May 7, 2026, the SEC notified the court of its intent to propose rescission. The formal proposal followed on May 29.

SEC Chairman Paul S. Atkins framed the rescission in terms of institutional mandate: "We need to stick to our knitting. Let the Environmental Protection Agency do their job and we stick to our job." Disclosure obligations, he stated, "should comply with the Commission's statutory authority, be guided by materiality as the North Star, avoid the practical effect of dictating corporate behavior, and be imposed only when the expected benefits justify the likely costs and burdens."

Comments on the proposed rescission are due August 3, 2026. If finalized, the rescission would leave the SEC's existing 2010 Interpretive Release (Release No. 33-9106), which provides guidance on materiality-based climate disclosure under Regulation S-K and S-X, as the sole federal framework. That 2010 guidance requires companies to consider and disclose material climate risks under existing rules, but it establishes no specific emissions reporting obligations, no standardized format, and no attestation requirements.

Why Rescission Matters for P&C Carriers Specifically

The 2024 rule would have been the first federal mandate requiring publicly traded insurers to report Scope 1 and Scope 2 emissions in a standardized format with independent verification. For P&C carriers, the rule's financial statement impact provisions were particularly relevant: they would have required disclosure of how climate-related risks affected line items on the balance sheet, income statement, and cash flow statement. For companies writing homeowners, commercial property, and specialty lines in catastrophe-exposed territories, this would have meant quantifying how extreme weather events, changing loss patterns, and shifting reinsurance costs flow through financial statements.

Without the federal rule, the depth and quality of climate risk disclosure in carrier 10-K filings will remain at management's discretion, governed only by the materiality standard in the 2010 guidance. From tracking these filings across the top-25 P&C carriers, patterns we have observed are revealing: some carriers dedicate multiple pages to climate risk governance, scenario analysis, and exposure quantification, while others address climate risk in a single paragraph within the general risk factors section. The rescission preserves this dispersion. Analysts, rating agencies, and reinsurers who rely on 10-K disclosures to compare climate risk management across carriers will continue to work with non-standardized data that resists apples-to-apples comparison.

The rescission also creates a cost-of-compliance asymmetry. Many large public P&C carriers had begun investing in emissions measurement systems, climate governance structures, and reporting infrastructure in anticipation of the rule. Companies like Chubb, Travelers, and AIG had already embedded climate risk into their 10-K disclosures at a level approaching what the rule would have required. These carriers do not lose that investment, but they lose the competitive level-setting that the rule would have imposed on peers who had not made comparable investments.

California SB 253 and SB 261: The State-Level Alternative

California's two climate disclosure laws represent the most significant state-level alternative to the now-defunct federal framework. Their enforcement status, however, diverges.

SB 253 (Climate Corporate Data Accountability Act) is fully enforceable. It requires U.S.-based companies with more than $1 billion in annual revenue that conduct business in California to publicly disclose Scope 1 and Scope 2 greenhouse gas emissions beginning in 2026, with Scope 3 value chain emissions required starting in 2027. The California Air Resources Board (CARB) set a first-year reporting deadline of August 10, 2026, at its February 2026 Board hearing. Reports must conform to the Greenhouse Gas Protocol. A court denied a motion to enjoin SB 253 enforcement, so the law proceeds as scheduled. CARB has signaled enforcement discretion for good-faith first-year submissions, but penalties for non-compliance can reach $500,000 per year.

SB 261 (Climate-Related Financial Risk Act) requires biennial reporting on climate-related financial risks aligned with the TCFD framework from companies with more than $500 million in annual revenue. But SB 261 is currently enjoined. The Ninth Circuit granted an injunction on November 18, 2025, halting enforcement pending appeal. CARB confirmed in a December 2025 advisory that it would not enforce the January 1, 2026 statutory deadline and will set an alternate reporting date after the appeal resolves.

For P&C carriers, a critical distinction applies: both laws contain insurance-specific exemptions. SB 261 explicitly excludes entities regulated by the California Department of Insurance or in the business of insurance in any other state. CARB has proposed extending a similar exclusion to SB 253. These exemptions mean the laws primarily affect non-insurance corporations, not carriers directly. The indirect effect, however, is substantial. SB 253 will generate emissions data from thousands of California-operating companies across the economy, data that flows into insurers' commercial underwriting, investment analysis, and portfolio-level risk assessment. A P&C carrier writing commercial property in California will soon have access to Scope 1 and 2 emissions data from its largest policyholders, whether or not the carrier itself is required to report.

The legal landscape remains unsettled. The Ninth Circuit heard oral arguments in Chamber of Commerce v. Sanchez on January 9, 2026, focusing on First Amendment questions about SB 261's narrative disclosures and SB 253's Scope 3 requirements. A ruling could reshape the scope of both laws before SB 253's August deadline arrives.

NAIC Climate Risk Disclosure Survey: Still Collecting, Still Growing

While the SEC retreats, state insurance regulators continue to operate what is arguably the most mature climate disclosure regime in the U.S. financial sector. The NAIC's Climate Risk Disclosure Survey, overhauled in April 2022 to align with the TCFD framework, requires insurers with at least $100 million in direct written premium to submit detailed climate risk disclosures. Survey responses for the 2025 reporting year are due August 31, 2026.

As of the most recent cycle, 15 participating states and territories submit survey data: California, Connecticut, Delaware, the District of Columbia, Maine, Maryland, Massachusetts, Minnesota, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Vermont, and Washington. The Ceres 2025 Progress Report analyzed responses from 526 insurance groups representing more than 1,723 individual companies and found meaningful progress alongside persistent gaps.

Across the TCFD's four pillars, 99% of insurers reported on risk management processes, 97% on strategy, and 87% on governance. But only 29% disclosed metrics and targets related to climate risks, virtually unchanged from prior years. Of the 45 insurance groups providing disclosures across all four pillars, none provided emissions targets necessary to track progress toward their climate commitments, despite 87% having established comprehensive climate targets. Ceres characterized this disconnect as a "measurement gap": insurers are increasingly sophisticated in describing their climate risk governance and strategic frameworks but unable to translate those frameworks into quantifiable metrics.

Use of climate scenario analysis increased 28% year-over-year, with 148 insurance groups incorporating it in their 2023 reporting. This is a positive trend, but the Ceres analysis also found that insurers are not applying scenario analysis to measure portfolio exposure to climate impacts or track financial effects. The analytical tools exist; the gap is in operational deployment.

The survey's strength is its consistency: a standardized framework applied across the insurance sector, with responses publicly available for comparison. Its limitation is scope. Fifteen states is fewer than the 27 that previously participated (some states dropped out amid anti-ESG political pressure), and the $100 million threshold means smaller regional carriers are excluded. Nonetheless, the survey remains the closest thing the U.S. insurance industry has to a unified climate disclosure standard.

RBC Climate Scenario Interrogatories: Projecting to 2050

The NAIC's climate scenario interrogatories, adopted by the Financial Condition (E) Committee on August 2, 2024, represent a distinct and technically demanding layer of climate reporting for P&C carriers. Effective for year-end 2024 through year-end 2026 filings, the interrogatories require property and casualty insurers to disclose climate-conditioned catastrophe exposure for two perils: hurricane (major hurricanes, Category 3 and above, wind losses only) and wildfire.

Insurers must report probable maximum losses at five return periods (1-in-50, 1-in-100, 1-in-250, 1-in-500, and 1-in-1,000 years) under climate-adjusted conditions. The framework offers three methodologies:

Frequency-based approach: Apply a 10% and 50% increase in frequency for major hurricanes and all wildfire events to existing catastrophe model outputs. This option was designed to accommodate industry concerns about cost and complexity.

Own view of risk (time-based): Develop internal climate risk assessments based on scientific best estimates, projecting impacts to 2040 and 2050.

Vendor climate-conditioned catalogs (time-based): Use commercial vendor catalogs (from Verisk, Moody's RMS, or others) calibrated to Representative Concentration Pathway 4.5 projections for 2040 and 2050.

The interrogatories are informational only. The NAIC has been explicit that the data will not be used to develop new risk-based capital charges or calculate additional RBC requirements. All figures are reported confidentially. But as Gallagher Re noted in its briefing on the requirement, state regulators may use the information to "engage in discussion with companies" regarding their climate change strategy, particularly those in vulnerable solvency positions.

For actuaries working in catastrophe modeling and ERM, the interrogatories demand engagement with time horizons far beyond traditional actuarial practice. Projecting hurricane and wildfire losses to 2050 requires assumptions about climate trajectories, sea surface temperature trends, urban-wildland interface development, and vegetation management policy that sit outside the standard actuarial toolkit. Many companies do not currently use climate-conditioned catalogs in their standard catastrophe modeling workflows; the interrogatories are pushing adoption of tools that were previously optional.

The three-year sunset provision (2024 through 2026 filings) creates a defined evaluation period. After 2026, the NAIC will reassess whether to extend, expand, or discontinue the requirement based on the quality and utility of the data collected.

EU CSRD: Simplified but Still Binding

For P&C carriers with European operations, the EU's Corporate Sustainability Reporting Directive creates a parallel compliance track that survived a dramatic scope reduction. The Omnibus I simplification directive was published in the Official Journal on February 26, 2026, and entered into force on March 18, 2026.

The simplification narrowed CSRD applicability to companies with more than 1,000 employees and above €450 million in annual net turnover. For third-country undertakings (including U.S. carriers operating through EU subsidiaries), thresholds are €450 million for parent companies and €200 million for subsidiaries and branches operating within the EU. The Omnibus directive achieved a 61% reduction in mandatory European Sustainability Reporting Standards (ESRS) data points, from approximately 1,100 to roughly 430, while eliminating voluntary disclosures altogether.

Several provisions directly affect insurance companies. Financial holding undertakings received an explicit exemption from CSRD scope. Wave 1 companies that no longer meet the revised thresholds can be exempted from reporting for 2025 and 2026. The obligation for companies to adopt a climate change mitigation transition plan under the parallel Corporate Sustainability Due Diligence Directive (CS3D) was removed entirely. Member states have 12 months from the directive's entry into force to transpose the provisions, with first-time application required for financial years beginning on or after January 1, 2027.

The simplified ESRS standards are expected to be adopted by the European Commission in the first half of 2026, meaning the detailed reporting requirements for the 2027 financial year will not be finalized until mid-year. For actuaries at carriers with European exposure, this creates a planning challenge: resource allocation and data infrastructure decisions need to be made before the final standards are published.

Penalties for CSRD non-compliance are capped at 3% of net worldwide turnover, a significant figure for large multiline carriers. While the scope reduction removes most smaller insurers from CSRD obligations, the major global carriers (Zurich, AXA, Allianz, and U.S. groups like Chubb and AIG with substantial European operations) remain squarely within scope.

The Compliance Matrix: What P&C Carriers Actually Face

The practical effect of the SEC rescission is not deregulation; it is fragmentation. A large publicly traded P&C carrier operating across multiple jurisdictions could face all of the following obligations simultaneously:

Framework	Scope	Content	Next Deadline
SEC 2010 Guidance	All public registrants	Material climate risks under Reg S-K/S-X	Each 10-K filing
CA SB 253	>$1B revenue, doing business in CA (insurer exemption pending)	Scope 1 & 2 GHG emissions	August 10, 2026
CA SB 261	>$500M revenue (insurer exemption; currently enjoined)	TCFD-aligned financial risk report	TBD (injunction pending)
NAIC Survey	≥$100M DWP in 15 participating states	TCFD four-pillar disclosure	August 31, 2026
NAIC RBC Interrogatories	P&C insurers (YE24-YE26)	Climate-conditioned cat exposure (hurricane, wildfire)	March 1, 2027 (YE26 filing)
EU CSRD	>1,000 employees + €450M turnover	ESRS sustainability standards	FY 2027 (reports due 2028)

No two frameworks use the same scoping threshold. No two share the same reporting calendar. The content requirements overlap in places (both the NAIC survey and SB 261 reference the TCFD framework) but diverge in others (the RBC interrogatories focus narrowly on catastrophe exposure, while the CSRD encompasses all sustainability dimensions). For compliance teams and ERM departments, this means maintaining parallel data pipelines, reporting formats, and assurance processes.

The irony is that the SEC rule was designed to reduce precisely this kind of fragmentation. Its rescission achieves the opposite.

Actuarial and ERM Implications

The fragmented disclosure landscape has specific consequences for actuarial practice, particularly for cat modelers, ERM teams, and appointed actuaries.

Infrastructure investment without a compliance mandate. Many P&C carriers built climate risk measurement infrastructure, including emissions accounting systems, TCFD reporting workflows, and climate-conditioned modeling capabilities, in anticipation of the SEC rule. With the federal mandate gone, the business case for maintaining and expanding that infrastructure shifts from regulatory compliance to voluntary risk management. Some carriers will continue investing; others will deprioritize. The resulting divergence in analytical capability will be visible in the quality of NAIC survey responses and RBC interrogatory data, even if it is not directly comparable in SEC filings.

Cat modeling time horizon extension. The NAIC RBC interrogatories push actuaries into 2040 and 2050 projection horizons for hurricane and wildfire losses. This is a meaningful departure from the one-to-five-year horizons typical of pricing and reserving work. The frequency-based approach (applying a 10% or 50% uplift to existing model outputs) is mechanically simple but analytically thin; the time-based approaches using vendor climate-conditioned catalogs or own-view-of-risk methodologies require assumptions about climate trajectories, adaptation measures, and exposure growth that sit outside the traditional actuarial toolkit. As carriers report three years of interrogatory data (2024 through 2026), internal pressure to adopt the more sophisticated time-based methodologies will grow, particularly at companies where regulators use the data to initiate conversations about climate risk management practices.

Portfolio-level emissions data as an underwriting input. California's SB 253 will generate Scope 1 and 2 emissions data from thousands of companies beginning in 2026. For commercial lines actuaries, this data creates new possibilities for incorporating emissions exposure into pricing and portfolio management. A commercial property book concentrated in high-emissions sectors may face different transition risk trajectories than a diversified portfolio. Whether and how to integrate this data into actuarial models is a question the profession has not yet answered systematically, but the data's availability will force the conversation.

Disclosure quality as a rating agency input. AM Best, S&P, and Moody's have all incorporated climate risk governance into their insurance rating frameworks. Without a standardized federal disclosure, rating agencies will increasingly rely on the NAIC survey, voluntary TCFD reports, and direct engagement to assess carrier climate risk management. Carriers that produce high-quality climate disclosures will have an advantage in these assessments; those that pull back after the SEC rescission may face more pointed questions from analysts.

The ASOP framework. ASOP No. 46 (Risk Evaluation in Enterprise Risk Management) directs actuaries to consider risks that could materially affect an organization, including emerging risks that may not yet be fully reflected in historical data. Climate-related physical and transition risks fall squarely within this scope. The SEC rescission does not change an actuary's professional obligation to consider material climate risks in ERM work; it simply removes the federal reporting framework that would have standardized how those risks are communicated to investors.

What Comes Next

The comment period on the SEC's proposed rescission closes August 3, 2026. If the rescission is finalized, which appears likely given the Commission's 3-2 Republican majority, the 2010 Interpretive Release will be the only federal climate disclosure standard applicable to public insurers. That guidance provides no specific emissions reporting requirements and relies entirely on management's determination of materiality.

Several developments could alter the trajectory. California's SB 253 enforcement begins August 10, 2026, and the scope of the insurance exemption remains subject to CARB's final rulemaking. The Ninth Circuit ruling on SB 261 could revive or permanently block that law's climate financial risk reporting requirements. The NAIC will evaluate the RBC interrogatory data after the 2026 sunset and decide whether to extend or expand the requirement. And the EU's simplified ESRS standards, expected in mid-2026, will define the specific reporting requirements for carriers with European operations starting in financial year 2027.

For P&C actuaries and ERM teams, the practical path forward is to treat climate disclosure as a multi-regime compliance problem rather than a single-framework exercise. The infrastructure that carriers built in anticipation of the SEC rule, including emissions measurement, scenario analysis, and TCFD-aligned governance, remains useful across every surviving framework. What has changed is the coordination: without a federal standard, each framework must be managed independently, with its own data pipeline, reporting format, assurance requirement, and deadline.

The reporting landscape did not get simpler when the SEC stepped back. It got harder to navigate.