In the entire cycle of MMC-HVDC planning, overvoltage protection and insulation coordination is one of the most important parts needed to be considered. An overvoltage protection scheme, which takes the Transbay project by Siemens as an example system, is proposed. The scheme combines the research results in traditional HVDC systems and the characteristics of MMC-HVDC systems, and places arresters at some key locations in the MMC-HVDC converter station, which can directly limit the overvoltage to an acceptable range and hence protect the key equipment concerned. Since all the DC lines of the project are undersea cables, no lighting overvoltage is considered and 14 faults which could happen are carefully selected to serve as the verification conditions for the insulation design. Based on the PSCAD/EMTDC simulations and the deterministic method, the required withstand voltage level of the key equipment in the converter station is calculated.