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Ceres backs California long-term solvency planning for major insurers
The nonprofit cites rising climate risk in California, including NOAA forecasts for a likely strong or very strong El Niño this fall and winter.
Ceres, a US-based non-profit focused on sustainable business practices and climate risk management, has voiced support for a proposed California regulation that would require the state’s largest domestic insurers to publish long-term solvency plans covering financial risks tied to extreme weather, among other factors.
In a comment letter to the California Department of Insurance, Ceres said the Long-Term Solvency Planning Regulation would enhance oversight of the insurance sector and align California’s approach with solvency and transition planning frameworks already adopted by regulators in other regions.
Ceres said the timing is critical because climate-related risks facing California continue to grow. It pointed to unusually warm Pacific Ocean temperatures this year and referenced forecasts from the US National Oceanic and Atmospheric Administration’s Climate Prediction Center that indicate a 97% probability of a strong or very strong El Niño event between October and December.
The nonprofit also argued that the framework would give “much needed visibility” into how carriers are preparing for future risk. Ceres added that its own climate disclosure assessment, published in May, found that more than 83% of assessed insurance groups report against all four Task Force on Climate-related Financial Disclosures pillars, while fewer than 11% of individual disclosure data points were considered sufficient.