The California Department of Insurance published a press release announcing the finalization of the Long-term Solvency Planning Regulation, which requires insurers to prepare for climate risks, artificial intelligence, cyber threats, and other emerging issues that could affect solvency.
The regulation gives the state insurance department information and tools to help identify vulnerabilities and potential financial concerns and strengthen oversight in order to protect the market and insureds.
Under the regulation, insurers in California are required to evaluate the impact of climate risks, AI, cyber threats, technological disruption, and other challenges on their financial strength, operations, investments, and underwriting strategies. Companies are required to provide information to the Department on how they are preparing for those risks. Companies writing more than $50 million in direct annual premiums will have more requirements.
The regulation is effective October 26, 2026. Insurers must provide their first long-term solvency plans to the Department by January 1, 2028.
The press release can be found here.
Ray Sugrim
Ray Sugrim is an Insurance Editor with FC&S Expert Coverage Interpretation, a division of National Underwriter Company and Arc Network. Ray is responsible for helping develop and edit content for subscribers. Ray is a St John’s University graduate with a degree in Risk Management & Insurance and is a CPCU candidate.