Existing law creates the Department of Insurance (Department), headed by the Insurance Commissioner, and prescribes the commissioner’s powers and duties, including various duties to regulate the business of insurance in this state and to enforce the execution of those laws. Existing law requires the Commissioner to convene a working group to identify, assess, and recommend risk transfer market mechanisms that, among other things, promote investment in natural infrastructure to reduce the risks of climate change related to catastrophic events, create incentives for investment in natural infrastructure to reduce risks to communities, and provide mitigation incentives for private investment in natural lands to lessen exposure and reduce climate risks to public safety, property, utilities, and infrastructure.
This bill would require the Department to establish and administer the Climate and Sustainability Insurance and Risk Reduction Program, to be funded upon appropriation, for the purpose of achieving specified goals, including developing proof of concepts that expand insurance options, especially in vulnerable and disadvantaged communities where climate risks are currently uninsured or underinsured.
The bill, upon appropriation, would establish 6 climate insurance pilot projects in specified local jurisdictions to reduce physical risks from flooding and extreme heat and to reduce the protection gap in communities with high risks and low insurance uptake. The local jurisdictions would be required to develop and establish a specific pilot project in consultation with the Department to achieve specified objectives, including prioritizing pre-disaster mitigation activities.
The bill would require the Department to provide technical support for the pilot projects and to establish a competitive grant solicitation program to support the design and funding of readily implementable and scalable projects that address climate risks and expand insurance options, as specified. The bill would repeal these provisions on January 1, 2035.
Committee Location: Assembly Insurance Committee — set for a March 22 hearing.
Full bill text and related information.