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California lawmakers block Newsom's push to limit wildfire liability
KCRA • • nation
Key Points:
- California lawmakers have blocked Gov. Gavin Newsom's plan to prevent insurance companies from recouping losses from investor-owned utilities responsible for catastrophic wildfires, following failed negotiations with Democratic lawmakers.
- The governor aimed to end subrogation, a process allowing insurers to recover wildfire claim costs from utilities, to protect the state's wildfire liability fund and prevent utility bankruptcies.
- Insurance industry leaders warned the proposal could cause insurance premiums to rise sharply and destabilize California's insurance market.
- In response to opposition, Newsom's office proposed phasing out subrogation gradually, but the revised plan was still rejected by Senate Democrats.
- The governor's office will instead focus on banning utility CEO bonuses for wildfire incidents, speeding up victim payouts, enhancing wildfire data sharing, and prohibiting speculative investing in wildfire claims.
