Next-Gen Invalidation Insurance Product

//Next-Gen Invalidation Insurance Product
Next-Gen Invalidation Insurance Product 2019-07-02T21:17:13+00:00

California Compliance Insurance is pleased to now offer the Next-Gen Invalidation Security Insurance product “Next-Gen,” an insurance solution tailored to address Air Resource Board Offset Credits (ARBOC) invalidation risk. The product was developed in partnership with experts at AmWINS Group, the nation’s largest wholesale insurance distributor.

Since the California Cap and Trade program commenced in 2012 to lower greenhouse gas emissions, the Miscellaneous Professional Liability policies available to transfer invalidation risk of ARBOCs have been difficult for legal and compliance departments to understand, leaving many questions unanswered.

The Next-Gen product utilizes an innovative new coverage template inclusive of all the legal input from market participants since 2013. It also aligns with outlined invalidation procedures and mirrors language of the Cap and Trade program regulations. Next-Gen’s coverage template was designed to be used by Supplier-Sellers and Buyer-Covered Entities as Invalidation Security for in-use trading agreements and Requests for Offers.

Coverage Details

  • Coverage indemnifies the ARBOC property owner up to the Replacement Limit for damages caused by invalidation perils.
  • Single Issuance or Portfolio option:
    • The Portfolio rating is based on 36 months of compliance offset detail history and projections of ARBOC purchases 12 to 24 months out. The Portfolio purchase option incorporates rate discounts based on the number of ARBOCs that are added to the Portfolio policy by issuance endorsements throughout twelve months.
  • Various limit options include adjustable replacement limits, self-insurance or stated limit.
  • Coverage commences automatically when the title for the ARBOCs transfers to the owner, making the maintenance of the policy minimal.


The Next Gen coverage template is:
Simple to understand:
• Coverage template has been developed from scratch, not influenced by the historical issues of the Miscellaneous Professional Liability policy approach.
• Underwriting process is streamlined with a simple application and full verification report.

Specific to the exposure:
• Coverage template has been drafted using the terms directly from the ARBOC regulations.

• Can be utilized by both buyers and suppliers.
• Can be applied to single issuances as well as portfolio/high volume issuances.

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