California Insurance Commissioner Ricardo Lara is trying to reduce wealth inequality in the state by updating the state’s community investment matchmaking program.
Lara wants to help black-owned investment firms, and firms owned by other types of people who may be underrepresented in the world of investment banking, such as women, and military veterans, get insurance company money for affordable housing projects and environmental projects in California.
Lara hopes to make that happen by adding an Invest in Our Diverse Communities Initiative to the California Organized Investment Network (COIN) program.
- The California Organized Investment Network website is available here.
- An article about the Global Impact Investing Network’s latest survey is available here.
The California Department of Insurance started the COIN program in 1996, to help channel some of U.S. insurers’ $7 trillion in assets into projects that could help low-income people or communities, rural communities, and other capital-starved people and communities in California.
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The COIN program promotes projects that will help the environment, or help low-income or moderate-income people or communities, through an Impact Investment Marketplace website. The listed projects must ”provide safe, sound and solvent investments offering an acceptable risk-adjusted financial return for that asset class,” according to the program website.
Managers of the new diverse communities initiative will look for capital-ready projects that meet COIN requirements, and that are owned and managed by what California classifies as “diverse firms.”
California will classify an investment firm as being diverse if it’s owned by someone who is a woman, a military veteran, LGBTQ+, Latinx, Asian Pacific Islander, Native American, or black, department officials say in the initiative announcement.
The COIN program will highlight the diverse communities projects on the Impact Investment Marketplace site, officials say.
“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,” Lara said in a comment included in the initiative announcement.