The U.S. state of California is getting increasingly serious about the use of insurance or risk transfer to provide financing against climate risks and financing to support climate adaptation and resilience building.

The state is already in the process of putting into place legislation that would allow it to purchase insurance, reinsurance, insurance-linked securities (ILS), or other alternative risk transfer (ART) structures, to help fund the economic burden from natural disasters.

This legislation stalled recently though, as arguments emerged that the state can already purchase risk transfer.

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