The California FAIR Plan Association is sponsoring its first catastrophe bond, with an initial target to secure $250 million or greater in capital markets backed wildfire reinsurance protection through a Golden Bear Re Ltd. (Series 2026-1) cat bond issuance, Artemis has learned.
The California FAIR Plan buys a significant reinsurance program, given it writes hundreds of billions of dollars in exposure across the state of California, with its 2025 reinsurance structure having total coverage of around $5.78 billion and an attachment from $900 million of losses.
The FAIR Plan had estimated its losses from the Palisades and Eaton wildfire events in California at more than $4 billion, so tapped its reinsurance for support.
As such it is encouraging to see the insurer of last resort now looking to diversify its sources of wildfire reinsurance through the catastrophe bond market for the first time.
Bermuda based company Golden Bear Re Ltd. has been established to issue series of catastrophe bond notes for the California FAIR Plan, we understand.
For this first issuance, Golden Bear Re Ltd. is targeting issuance of a single tranche of Series 2026-1 Class A notes, that will be sold to cat bond investors and the proceeds used to collateralize a reinsurance agreement with the California FAIR Plan.
The initial target is to secure $250 million of protection against California wildfire losses on an indemnity trigger and per-occurrence basis with this first Golden Bear Re catastrophe bond issuance, sources told us.
The cat bond will sit high up in what appears to be a growing reinsurance tower for the FAIR Plan, with plenty of room for the deal to upsize if investor appetite proves sufficient.
The notes will provide the FAIR Plan with fully-collateralized wildfire reinsurance for the state of California running across a three year term running to the end of 2028.
The currently $250 million of Golden Bear Re Series 2026-1 Class A notes would attach their coverage at $6 billion of losses, sharing in a layer running to $7.05 billion, we understand.
The Class A notes will come with an initial attachment probability of 2.58%, an initial expected loss of 2.24% and are being offered to investors with spread price guidance in a range from 10.5% to 11.5%, we are told.
Attaching at $6 billion and being per-occurrence in nature of their coverage, these notes are only going to be exposed to the most severe of California wildfire outbreaks, it appears.
The FAIR Plan’s exposure is still growing though, as the private insurance market remains challenged in California since the wildfires earlier this year, so its needs for reinsurance keep increasing.
It’s encouraging to see another of the largest insurer’s of last resort in the United States turning to the catastrophe bond market to access new and diversifying sources of efficient catastrophe reinsurance capacity.
This new deal will take the number of pure wildfire catastrophe bonds issued this year to four so far, which is the most we’ve ever recorded in our Deal Directory.
You can read all about this new Golden Bear Re Ltd. (Series 2026-1) catastrophe bond and view details on almost every other cat bond ever issued in our extensive Artemis Deal Directory.
