California FAIR Plan returns with $200m target for second Golden Bear Re wildfire cat bond

The California FAIR Plan Association has returned to the catastrophe bond market for its second sponsorship, seeking $200 million or more in capital markets backed wildfire reinsurance protection through a Golden Bear Re Ltd. (Series 2026-2) cat bond issuance, Artemis can report.

This comes on the heels of the California FAIR Plan Association’s debut catastrophe bond that was issued in December 2025, when it secured the largest pure wildfire risk cat bond ever, the $750 million Golden Bear Re Ltd. (Series 2026-1).

The California FAIR Plan is the insurer of last resort in the state and was established by statute to ensure that all California property owners can access basic fire insurance, when the traditional market is not able to provide coverage.

The California FAIR Plan buys a significant reinsurance program, given it writes hundreds of billions of dollars in wildfire property exposure across the state.

Its 2025 reinsurance structure had total coverage of around $5.78 billion and an attachment from $900 million of losses. But clearly for 2026 the FAIR Plan is building on that, with its debut cat bond having covered a share of a layer from $6 billion to just over $7 billion and this second Golden Bear Re 2026-2 set to occupy part of a billion dollar layer beneath that.

The FAIR Plan is again using its Bermuda based special purpose insurer Golden Bear Re Ltd. to issue these new catastrophe bond notes.

For this second deal, Golden Bear Re Ltd. is targeting issuance of a single tranche of Series 2026-2 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 $200 million of protection against California wildfire losses on an indemnity trigger and per-occurrence basis with this second Golden Bear Re catastrophe bond issuance, sources told us.

The Golden Bear Re 2026-2 cat bond notes will provide the FAIR Plan with fully-collateralized wildfire reinsurance for the state of California running across a three year term to the end of February 2029, so a three year deal, we understand.

The currently $200 million of Golden Bear Re Series 2026-2 Class A notes would attach their coverage at $5 billion of losses, sharing in a layer running to $6 billion, so will sit directly beneath the reinsurance protection provided by its debut cat bond issuance.

The Series 2026-2 Class A notes will come with an initial attachment probability of 3.07%, an initial expected loss of 2.65% and are being offered to investors with spread price guidance in a range from 9.75% to 10.75%, we are told.

We’re told these notes, like the first Golden Bear Re cat bond, again come with certain provisions for a longer subrogation related extension, allowing for time for any beneficial claims to be realised.

For comparison, the previous issuance of $750 million Golden Bear Re 2026-1) notes had an initial expected loss of 2.24% and priced to pay investors an initial risk interest spread of 9.75%.

So with the new 2026-2 notes sitting beneath those and having a higher expected loss, it will be interesting to see where they price for the California FAIR Plan Association.

This second catastrophe bond for the California FAIR Plan is the first pure wildfire risk deal of 2026, following on from 2025 when we saw the most wildfire transactions we’d ever recorded in our Deal Directory.

Wildfire risk remains a relatively small component of the cat bond market in its purest form, of cat bonds solely exposed to the peril Artemis data shows, but this second issuance for the FAIR Plan will grow that further and as a result the wildfire peril continues to offer more diversification opportunities for investors and cat bond funds.

You can read all about this new Golden Bear Re Ltd. (Series 2026-2) catastrophe bond and view details on almost every other cat bond ever issued in our extensive Artemis Deal Directory.