Advertise here, Reinsurance News

Menu

Reinsurance News

California eyes state disaster insurance as legislation gains momentum

28th June 2019 - Author: Charlie Wood

The US state of California has taken a step towards securing an insurance policy to protect itself from the costs associated with wildfires and other disasters, following the clearance of legislation by a key assembly committee.

camp-wildfire-nasa

The Camp Wildfire on November 8th. Source: NASA

Senate Bill 290, which would see the creation of California Disaster Insurance, was co-authored by Senator Bill Dodd, Insurance Commissioner Ricardo Lara and Treasurer Fiona Ma.

It would function like home insurance, but for the state, with premiums paid by a portion of existing emergency funds.

The policy would trigger a payment to the state in the event of a disaster.

“Rising wildfire suppression costs can strain California’s financial resources and threaten cuts to critical programs,” said Sen. Dodd, D-Napa.

“This bill allows the state to invest in an insurance policy to ensure budget predictability and reduce taxpayers’ exposure to increasing costs associated with disasters, especially wildfires.”

Last year, California spent $947 million for firefighting – nearly $450 million more than budgeted, according to Cal Fire.

Furthermore, Since 2007, California experienced 11 of the 20 most destructive fires in its history.

“With extreme wildfires driving up the cost of firefighting to protect communities, disaster insurance will leave California in better financial shape,” said Commissioner Lara.

“Having insurance for our state budget can help us better prepare before the next disaster strikes.”

Treasurer Ma added, “Today’s action brings us one step closer to giving the governor, myself, and the insurance commissioner the ability to purchase insurance, reinsurance, insurance-linked securities, and other alternative risk transfer products to help pay costs resulting from natural disasters. It makes good financial sense to do this.”

Recent Reinsurance News

Getting your daily reinsurance news from Reinsurance News is a simple way to receive only the reinsurance industry news that matters, delivered directly to your email inbox.

  • Only email is mandatory, but the more you tell us about yourself the better we can serve you in future!
  • This field is for validation purposes and should be left unchanged.

By submitting the form you are giving your consent to be emailed by us.

Read previous article:
AIG adds Shane Fitzsimons as Global Head of Shared Services

American International Group (AIG) has announced the appointment of Shane Fitzsimons to the newly created role of Global Head of...

Close