LOS ANGELES — Insurance Commissioner Ricardo Lara has announced a public hearing on a proposed Long-Term Solvency Planning Regulation, a first-of-its-kind rule for any U.S. state aimed at safeguarding California's insurance market against future crises driven by climate change, cybersecurity threats, and the misuse of artificial intelligence.
The regulation, which targets the nation's largest insurance market, would require insurance companies to provide detailed information on how they plan to mitigate risks and maintain solvency through 2030, 2040, and 2050. This forward-looking approach is designed to prevent sudden market disruptions and protect consumers, particularly in areas like Stanislaus County and the city of Ceres, where access to insurance is critical for real estate, agriculture, and home construction.
Commissioner Lara emphasized that the last decade has revealed the inadequacy of a go-it-alone approach to insurance regulation. "Resilience is not optional, it is a global responsibility," Lara said.
The regulation builds on the expertise of international financial regulators, including the Banque de France, the Bank of England, and the Monetary Authority of Singapore, and integrates guidance from the International Association of Insurance Supervisors' climate risk framework. By requiring stress tests for climate scenarios and documentation of risks and opportunities related to technology and investment, the Department of Insurance aims to enhance financial stability and ensure that coverage remains available when Californians need it most.
The proposed rule also addresses cybersecurity and the evolving use of artificial intelligence in underwriting and operations, as well as transition risks associated with reducing reliance on greenhouse gas-emitting technologies. Experts from the Environmental Defense Fund, Ceres, and the UN Environment Programme have praised the regulation as a critical step for market stability and consumer protection.
A virtual public hearing on the regulation is scheduled for July 28, 2026.