The California Earthquake Authority plans to take part in more catastrophe bond deals every four to six months after successfully closing its first one this week, the agency said on Tuesday.

On Monday the CEA closed its first $150 million transaction, in which it struck a reinsurance contract with Bermudan entity Embarcadero Re, which then sold three-year bonds in a deal arranged by Deutsche Bank.

Catastrophe bonds are used by insurers and reinsurers to transfer extreme risks to capital markets investors, rather than the usual reinsurance market, thereby freeing up capital for underwriting.

The CEA writes 70 percent of all earthquake policies in California, where only 12 percent of residential homeowners actually carry earthquake insurance.

Nonetheless, the quasi-governmental agency -- founded by the California legislature and funded by private insurers -- is still by far the largest writer of quake coverage in the United States.

"Our country is not prepared for earthquake, not in California, not in other regions either," said Glenn Pomeroy, the chief executive of the authority.

The CEA has more than $9 billion in claims-paying capacity, more than $3 billion of which comes from reinsurance. Pomeroy and others have said that the authority's reinsurance bill forces premiums to be higher than they should.

Reducing that bill is one of the goals of the catastrophe bond program, which is one of the other reasons that the CEA plans to come to market so frequently.

"There seems to be what I call one-off or specialized transactions that come to market," CEA Chief Financial Officer Tim Richison said in an interview. "There is nothing that investors can count on being there again and again. The intent here is that it's repeatable."

Deutsche Bank Earthquake Deutsche Bank California