California Requires Insurers to Plan for Climate, AI, and Cyber Risks Decades Ahead

California — California sets global standard for insurance resilience as Commissioner Lara finalizes landmark long-term: Insurance Commissioner Ricardo Lara finalized the Long-Term Solvency Planning Regulation, establishing a first-in-the-nation framework requiring California-based insurance companies to prepare for climate risks, artificial intelligence, cyber threats, and other emerging challenges that could affect their financial strength and ability to pay claims over the coming decades.

The regulation provides the California Department of Insurance with additional forward-looking information and tools to identify vulnerabilities earlier, strengthen oversight, and address potential financial concerns before they become larger problems for policyholders or the insurance market.

“Climate change, artificial intelligence, cybersecurity threats, and other developments are already reshaping the future of insurance,” said Commissioner Lara. “Waiting until those challenges become crises is not a strategy. We are acting now to ensure insurers are preparing for what lies ahead so they can continue keeping their promises to consumers. Every consumer who pays an insurance premium deserves confidence that their insurance company will be there when they need it most, not only today, but years from now.”

Preparing Insurance Markets for the Decades Ahead

Through Commissioner Lara’s work with the International Association of Insurance Supervisors and other global initiatives, he has helped develop guidance addressing climate-related financial risk, catastrophe resilience, and long-term insurance supervision. The regulation brings those lessons into California’s financial oversight framework within the nation's largest insurance market and draws on Commissioner Lara’s years of international collaboration and forward-looking planning approaches used by financial authorities including the Banque de France, Bank of England, Bank of the Netherlands, Canada’s chief insurance regulator, and the Monetary Authority of Singapore.