The Insured is the underlying project entity with the owner of the Offset being the Loss Payee. This allows the Offset to be traded without limitation in the future.
The Policy Period will cover the risk of invalidation for up to 3 years from date of Offset issuance.
The Insured Risks are the reasons for invalidation as set out in section 95985(c) of the California Cap & Trade Program Regulations being:
- The Offset Project Data Report contains errors that overstate the amount of GHG reductions or GHG removal of enhancements by more than five per cent;
- The offset project activity and implementation of the offset project was not in accordance with all local, state, or national environmental and health and safety regulations during the Reporting Period for which the ARB Offset Credit was issued; or
- ARB determines that offset credits have been issued in any other voluntary or mandatory program within the same offset project boundary and for the same Reporting Period in which ARB Offset Credits were issued for GHG reductions and GHG removal enhancements.
The Policy Limit is determined by the volume of Offsets insured and the monetary limit per Offset required. This monetary limit per Offset should be set based on the expected replacement cost of the Offsets (which may be up to 3 years in the future).
The Basis of Indemnity is the actual cost of replacing invalidated CCO with CCAs. Additional costs such as acquisition costs (legal fees, broker commissions etc.) may also be included. The policy is settled in cash but, subject to agreement, replacement Offsets may be provided instead.
The Insurer Security supporting the policy will be investment grade with a minimum S&P rating of ‘A’.
Premiums are likely to be between $0.30 – $1.00 per CCA depending on insured limit per ARBOC. Premiums will be payable on inception.
We are accepting submissions for all current ARB approved protocols (Forestry, Ozone Depleting Substances, Mine Methane, Anaerobic Digestion of Livestock Manure) and will also consider future protocols when approved.
To receive full policy details and pricing please submit project details for underwriting consideration. These should include:
- Full project information
- Verification reports
- Registry listing details
- Details of the insured legal entity
- Off-take agreement
- Details of Offsets to be insured including volumes, reporting periods, anticipated issuance dates and required limit per Offset.