California lawmakers block Newsoms push to stop insurers from suing utility companies that cause wildfires

California lawmakers have rejected Gov.Gavin Newsom’s push to stop insurance companies from seeking reimbursement from utility companies responsible for wildfires.The proposal would have prevented insurers from going after investor-owned utilities to recover money they had paid to homeowners and businesses whose property was damaged or destroyed by the companies’ fires.

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By clicking above you agree to the Terms of Use and Privacy Policy.Never miss a story Newsom’s office pushed for the change as part of a wider effort to protect California’s wildfire liability fund and prevent utilities from potentially being driven to bankruptcy by the cost of another devastating blaze.But Democratic lawmakers refused to support the plan after negotiations with the governor’s staff stretched from Thursday night into late Friday, four sources familiar with the talks told KCRA.Newsom said the fight for broader changes will continue next year.

“Nonetheless, this system needs full structural reform — not a partial one,” he said.“I urge the Legislature to build on this progress next year and finish the work we started to secure the Wildfire Fund’s long-term durability, stabilize electricity rates, and ensure fire victims are never again turned into unsecured creditors in a bankruptcy proceeding.”Major insurance companies had warned the proposal could raise premiums and destabilize California’s insurance market.The practice at the center of the dispute is known as subrogation.It allows insurers that have already paid wildfire victims’ claims to seek reimbursement from utility companies responsible for causing fires.Newsom initially wanted to eliminate the practice, but his office later offered to phase it out amid opposition.His administration then proposed Friday night that insurers instead be...