Newsom order reshapes California climate funding
California Governor Gavin Newsom signed an order last month that creates a government framework for sharing disaster costs among insurers, utilities and residents. The directive tasks state agencies with developing programs that distribute climate-related damage costs through reinsurance markets, catastrophe bonds, or public backstops. Elizabeth Tosaris from Michaelman & Robinson said the insurance sector wanted state coordination on wildfire threats and property protection.
The California Earthquake Authority will study how to split losses between carriers through mandatory pools, energy companies via wildfire funds, and taxpayers through resilience programs. Better building codes and vegetation rules could reduce risk faster than waiting for construction standards to change over the course of decades. Newsom positioned the plan as a model for Florida and Australia, where weather disasters destabilize insurance markets. Long-term stability matters more than quick premium cuts, as multiple departments work together to develop solutions.
