California announces new ‘Cost of Reinsurance’ alowance amid natural disasters

California’ Insurance Commissioner Ricardo Lara announced the final major step in his Sustainable Insurance Strategy, issuing a historic regulation aimed at restoring stability to California’s insurance market while addressing the growing risks of wildfires and climate change. The new Net Cost of Reinsurance in Ratemaking Regulation requires insurance companies, for the first time , to increase coverage in high-risk areas, ensuring more options for Californians while limiting the costs passed on to consumers. The regulation works hand-in-hand with other reforms that Commissioner Lara has spearheaded that will have the effect of increasing insurance coverage options for Californians across the state. “Californians deserve a reliable insurance market that doesn’t retreat from communities most vulnerable to wildfires and climate change,” said Commissioner Lara. “This is a historic moment for California. My Sustainable Insurance Strategy is focused on addressing the challenges we face today and building a resilient insurance market for the future. With input from thousands of residents throughout California, this reform balances protecting consumers with the need to strengthen our market against climate risks.”…The Fly notes that publicly traded companies in the reinsurance space include: Munich Re (MURGY), Swiss Re (SSREY), Reinsurance Group (RGA), Greenlight Capital Re (GLRE), SiriusPoint (SPNT) and AIG (AIG) ( AIG).