GOP AGs’ Effort to Block ESG Investment Rule, Another Round of Insurance Industry Reforms Pitched in FL & More

25 GOP AGs Seek to Block Federal ESG Investment Rule

The Republican attorneys general of 25 states have asked a federal court in Texas to block implementation of a regulation from the U.S. Department of Labor governing the consideration of issues like climate change and social justice in investment decisions made by managers of retirement plans. The AGs claim that by permitting fiduciaries to take “nonfinancial objectives” into account, the DOL’s environmental, social and governance, or ESG, rule violates the Employee Retirement Income Security Act (ERISA), which says workers’ retirement income should be held in trust "for the exclusive purposes of providing benefits to participants.” (LAW360)

More Insurance Industry Reforms Proposed in FL

Although Florida lawmakers approved sweeping reforms to stabilize the state’s property insurance market in December (SB 2-A), a new bill (HB 837) introduced this month would bring another round of reforms aimed at limiting insurers’ litigation costs. Among other things the measure would prevent plaintiffs found to be more than 50 percent at fault for an accident or injury from recovering any damages, limit damage awards to the limits of the involved policies, and require plaintiffs to disclose letters of protection sent by plaintiffs’ attorneys to medical providers promising to pay the plaintiffs’ medical expenses out of any potential judgement. (INSURANCE JOURNAL, FLORIDA SENATE, STATE NET)

Federal Regulators Warn Banks about Risks Associated with Crypto Deposits

The Federal Reserve, Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency issued a joint statement urging banks to exercise caution with deposits from cryptocurrency businesses due to potential bank-run risks.

“In particular, certain sources of funding from crypto-asset-related entities may pose heightened liquidity risks to banking organizations due to the unpredictability of the scale and timing of deposit inflows and outflows,” the statement said.

Last month Silvergate Capital Corp., a California bank that primarily serves crypto companies, suffered a mass exodus of crypto customer deposits triggered by the collapse of crypto exchange FTX. The bank said its crypto customer deposit base contracted by over $8 billion, or almost 70 percent, last quarter. (LAW360)

—Compiled by KOREY CLARK