(Article from Insurance Law Alert, April 2026)
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Holding
The U.S. District Court for the District of Columbia denied a preliminary injunction seeking to compel Chubb Ltd. to include a shareholder’s climate-related proposal in its proxy materials, finding that the proposal arguably falls in the “ordinary business” exemption to the SEC rule that requires companies to include shareholder proposals in their annual proxy materials. As You Sow v. Chubb Ltd., 2026 U.S. Dist. LEXIS 69901 (D.D.C. Mar. 31, 2026).
Background
As You Sow, a non-profit shareholder advocacy organization and Chubb shareholder, submitted a proposal for inclusion in Chubb’s proxy materials which “request[ed] that Chubb issue a third-party report assessing if and how pursuing subrogation claims for climate-related losses would benefit the Company and its insureds.” Under SEC Rule 14a–8, companies are required to include qualified shareholder proposals in their proxy materials unless they fall into one of thirteen enumerated exemptions. Relevant here is the “ordinary business operations” exemption, which permits exclusion of proposals relating to a company’s day-to-day operations. Chubb notified the SEC that it intended to exclude the As You Sow proposal, asserting that it fell into the “ordinary business” exemption to Rule 14a-8 and “impermissibly [sought] to micromanage the company.” The shareholder filed suit, alleging that Chubb violated Rule 14, and moved for a preliminary injunction requiring inclusion of the proposal in the proxy materials for the May 2026 shareholder meeting. Chubb opposed the motion and moved to dismiss the complaint for failure to state a claim.
Decision
The court emphasized the limited and inconsistent guidance on the scope of the “ordinary business” exemption, noting tension between two SEC interpretive releases: one suggesting that a proposal must center on a significant social policy issue to avoid the exemption, and another indicating that merely “involv[ing]” such an issue may suffice. Chubb argued that decisions regarding whether to pursue subrogation claims are part of its day-to day business operations and that these decisions are made on a “case-by-case basis after a particular loss has occurred.” Applying the heightened standard for preliminary relief, the court stated that a preliminary injunction is an “extraordinary remedy” requiring a clear showing of entitlement. It concluded that, even under its preferred interpretive approach, As You Sow failed to demonstrate that “a report assessing climate-related subrogation claims transcends Chubb’s routine subrogation-claim practices.” Accordingly, the court denied the motion for a preliminary injunction. The court also denied Chubb’s motion to dismiss without prejudice.
Comments
As climate-related losses rise, shareholders have been pushing companies, including insurers, to address how their business practices respond to climate risk. The court’s reasoning suggests that climate-focused proposals may be excluded if they target operational decisions like claims handling or subrogation. How courts and regulators navigate this overlap will shape the future of shareholder influence in the insurance sector.