Wednesday, 05 August 2020

Insurance commissioner launches ‘Invest in Our Diverse Communities’ initiative

SACRAMENTO – On Wednesday, California Insurance Commissioner Ricardo Lara launched “Invest in Our Diverse Communities”, an initiative to identify diverse woman-, veteran-, LGBTQ+-, Latinx, Asian Pacific Islander, Black, and Native American-owned investment managers who can guide investments made by insurance companies into capital-ready socially responsible affordable housing and environmental projects across California.

With the U.S. insurance industry commanding $7 trillion in investible assets, the new Invest in Our Diverse Communities Initiative will identify investments managed or owned by diverse investment leaders to fund targeted projects with social benefits in the state.

The new initiative is part of the Department of Insurance’s California Organized Investment Network, or COIN, a nationally recognized model program created in 1996 to increase insurance industry capital in underserved, low-to-moderate, and rural communities throughout California.

“The COVID-19 pandemic has exposed the inequality in wealth that continues to persist in communities across our state, which I believe the insurance industry can help to tackle through socially responsible investments,” said Insurance Commissioner Ricardo Lara. “‘Invest in Our Diverse Communities’ will help insurance companies target their investments to diverse managers and firms who support environmentally sustainable programs and affordable housing projects for California to help improve our way of life and provide a stable home for those who need it.”

Commissioner Lara’s initiative will add COIN-qualified investment opportunities owned and managed by diverse firms to the Impact Investment Marketplace, an online “central clearinghouse” portal that the Department of Insurance launched in May 2019.

COIN-qualified investment opportunities address areas requiring immediate attention, such as health care, homelessness, and environmental sustainability. Investment opportunities also assist small businesses in underserved communities which, during the COVID-19 pandemic, will be needed now more than ever before.

In the past year, the COIN program has highlighted many new investment opportunities statewide to insurance companies, including funds which work to displace current and potential greenhouse gas emissions as well as to invest in renewable power assets such as solar and wind infrastructure that seek to deliver positive environmental and social impact.

Other COIN program investment opportunities focus on the development of permanent supportive housing to help alleviate homelessness in California or those which invest in platforms that improve the quality of life for Californians by increasing access to better education, health care, banking, financial services and credit, and improved environmental conditions.

COIN also works with certified Community Development Financial Institutions, or CDFIs, to help them source funding through insurance company direct investments and public bond offerings. COIN has long-standing relationships with some of the largest CDFIs in California.

COIN sources CDFI capital-raising initiatives and gauges initial interest from insurers for public offerings of CDFI securities. COIN also notifies insurers of potential investment opportunities in CDFIs and regularly meets with insurer investment staff to “matchmake” specific CDFIs to insurers’ investment portfolio strategies.

Commissioner Lara today announced his appointments to the COIN Advisory Board, which provides focus and guidance to the Commissioner and COIN Program to meet its mission. The newest members include the Board’s first ever representative with experience seeking investments that provide environmental benefits, a seat created on January 1, 2020 by Commissioner’s Lara’s sponsored Assembly Bill 1099 authored by State Assembly Majority Leader Ian Calderon, as well as other exceptional and diverse new members.

“It is crucial that we remain committed to socially responsible investing in our communities and in the environment and our COIN board members are an integral part in that,” said Commissioner Lara. “I am confident that our new members will bring fresh ideas and unique perspectives to help us further our goals of directing strategic funds to investments with a measurable impact in affordable housing, community development, renewable energy, and preservation of our natural resources.”

Doug Bystry, COIN Advisory Board Chair and President/CEO of Clearinghouse CDFI, stated, “I am extremely excited about Commissioner Lara’s move to increase diversity in directing insurance industry investments. This new initiative will bring new resources to underserved, distressed, low-income communities throughout California. We also welcome new members of the COIN Advisory Board, and look forward to their added expertise and input on community development investments.”

The next COIN Advisory Board meeting will be held on Thursday, August 13. More details are available at www.insurance.ca.gov/COIN .

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