California FAIR Plan says debut $750m cat bond “augments” robust reinsurance program

The California FAIR Plan, having recently come to market to sponsor its debut wildfire catastrophe bond and secured $750 million of reinsurance from the Golden Bear Re Ltd. (Series 2026-1) issuance, has now commented on the deal to say that the cat bond “augments” its robust reinsurance program arrangements.

The California FAIR Plan Association is an insurer of last resort that 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 entered the catastrophe bond market back in November, with an initial target to secure $250 million of collateralized wildfire reinsurance protection from the Golden Bear Re deal.

As we reported in a number of updates while the cat bond was being marketed, the size target was raised first to between $350 million and $500 million, then again to the eventual size of $750 million, while at the same time the pricing was finalised at a reduced level roughly 11% below the mid-point of initial price guidance.

As we also explained, that made the Golden Bear Re 2025-1 catastrophe bond the largest pure wildfire catastrophe bond ever issued, at more than triple the size of the previous largest, which was a $200 million issuance back in 2018.

Also notably, the settlement of the FAIR Plan’s first cat bond lifted the amount of pure wildfire cat bonds outstanding in the market to $1.1 billion, the highest figure ever for this peril in the cat bond market’s history by a significant margin.

So it is good to see the FAIR Plan now commenting on the catastrophe bond and its importance to the Association, as it continues to help California policyholders in their recovery after last year’s devastating wildfires.

The California FAIR Plan said that its team, “remains focused on helping customers recover from these catastrophic fires and other wildfires that impacted the state in 2025 – and preparing to meet the needs of policyholders in the event of future disasters.”

Thousands of homeowners affected by the Eaton and Palisades wildfires in Los Angeles, California had policies from the FAIR Plan.

It handled around 5,400 claims from the Eaton and Palisades fires and paid nearly $3.5 billion to policyholders, continuing to work through the final claims at this time.

Reinsurance capacity helped the FAIR Plan in paying those claims, but with its exposure still growing as well the Association needs to maintain significant protection and tapping the catastrophe bond market for the first time is now part of that.

“The FAIR Plan has taken steps to enhance its ability to serve policyholders when the next wildfire strikes and reduce the likelihood of assessing the voluntary market to ensure all covered claims are paid,” The Association explained.

Adding that, “The FAIR Plan has secured a line of credit and is maintaining a robust reinsurance program, augmented by a $750 million catastrophe bond.

“Securing better financing helps to ensure that the FAIR Plan will have resources to pay claims after disasters, which increases stability and confidence in the insurance market and encourages healthy competition and choice.”

The FAIR Plan further noted that, “Its continued growth – now placing it among the state’s largest residential property insurers – reflects ongoing strain in the voluntary market.”

As of September 2025, the California FAIR Plan’s exposure had risen to just over $696 billion, an increase of more than 52% since just one year earlier.

That significant exposure growth means more and increasingly robust protection is required, something the catastrophe bond market was able to contribute towards thanks to the successful Golden Bear Re issuance.

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.