Measure Would Target P&C Policies Tied to Energy Infrastructure
A bill advancing in the Connecticut Legislature would impose a new 5% surcharge on certain property and casualty insurance policies covering fossil fuel infrastructure, marking a potentially significant regulatory development for insurers underwriting energy risks in the state.
According to an Office of Legislative Research bill analysis of sSB 453, the measure would apply beginning January 1, 2027, to any new or renewed insurance policy—including captive insurance policies—covering infrastructure that “facilitates or expands oil, methane gas, or coal processing, exporting, or transporting.”
The scope of the surcharge extends to a broad category of risks, including wells, pipelines, terminals, refineries, and utility-scale generation facilities. The bill expressly excludes home fuel delivery vehicles from its application.
A recent in-depth article in the Insurance Journal first reported on the bill and noted growing regulatory and legislative activity aimed at linking insurance costs more directly to climate exposure and mitigation efforts. That trend has included proposals to use insurance-related charges or incentives to influence risk behavior and fund resilience initiatives.
Surcharge Proceeds Directed to Climate Resilience Account
The legislation would require insurers to remit any collected surcharge to the Connecticut insurance commissioner for deposit into a newly established, nonlapsing “climate resilience account.”
Under the proposal, the Connecticut Department of Energy and Environmental Protection would administer the account and allocate funds toward:
- Disseminating flood risk data to communities statewide
- Conducting public awareness campaigns in high-risk flood areas
- Providing grants for climate-resilient infrastructure projects designed to mitigate flood risk
The account would also be permitted to receive additional appropriations, gifts, or donations tied to flood risk mitigation efforts.
Committee Advances Bill Along Party Lines
The Environment Committee reported the bill favorably on March 18, 2026, by a 23–11 vote.
If enacted, the measure would take effect October 1, 2026, with the surcharge applying to policies issued or renewed on or after January 1, 2027.
Industry Context: Climate-Linked Insurance Costs Under Scrutiny
The proposal comes as insurers and regulators continue to evaluate the financial implications of climate-related risks and policy responses affecting underwriting and pricing.
It appears at present that Connecticut is the only state currently contemplating a premium-based surcharge targeting a specific underwriting class, with no evidence of the bill being part of a broader, multi-state legislative trend.
