California Earthquake Authority Surveillance Report
Rating Summary
The rating reflects the California Earthquake Authority’s (CEA) robust claims-paying capacity (CPC), strong debt service coverage, conservative investment portfolio and liquidity profile, consistent capital accumulation, and leading market position in California residential earthquake insurance. CPC totaled approximately $19.9 billion at June 30, 2026, up about $0.5 billion year over year despite the statutory reduction in the Second Industry Assessment Layer (IAL), equivalent to a 1-in-390-year modeled event and within the Governing Board’s 1-in-350 to 1-in-500 target range. Following the scheduled July 1, 2026 principal maturity of $110 million, only $120 million of Series 2022A revenue bonds remains outstanding, while pledged policyholder premiums provided approximately 6.4x coverage of 2025 debt service. CEA also benefits from a high quality, short duration investment portfolio, tax-exempt status that supports capital retention, and specialized expertise in…
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