California SB 30 - Insurance: climate change
California SB 30 looks to “innovative" insurance and reinsurance businesses to provide opportunities for local communities and homeowners to reduce their risk to climate change impacts. It cites that some California insurers are already incentivizing investment in natural resources to mitigate against climate risks, and this law supports further development of investing in and insuring natural infrastructure. Insurers are asked to recommend policies that create incentives for coastal wetland restoration for storm surge, and forests that are managed to reduce the risk of major fires - for example.
SB 30 requires the California Department of Insurance Commissioner to convene a working group to identify, assess, and recommend:
- risk transfer market mechanisms that 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
Additionally, the working group is required to recommend state policies to address these mechanisms.
In support of this new insurance policy development, insurers are encouraged to ask: “Can we reduce the exposure of insurance companies to climate change-related losses through innovative state policies or insurance pricing mechanisms that reward good behavior and charge premiums for actions that increase public safety risks or losses of property or environmental attributes?"
Publication Date: September 21, 2018
- State of California