KCRA-TV

California lawmakers have blocked Gov. Gavin Newsom's push to end "subrogation," the process by which insurers recoup wildfire claim payouts from investor-owned utilities found responsible for causing catastrophic fires. Multiple sources said negotiations collapsed late Thursday during a closed-door meeting between the governor's staff and Democratic lawmakers on a wildfire liability working group. The proposal was part of a broader Newsom effort to limit how much the state's three investor-owned utilities pay out after causing major wildfires. Insurance industry CEOs had warned the change would drive up premiums and destabilize the state's insurance market.

Facing pushback, Newsom's office tried to soften the plan by phasing out subrogation gradually, but Senate Democrats still rejected it. A memo from the governor's office acknowledged there was no path to broader structural reform that would meaningfully contain costs, while the office said it would still pursue smaller measures: banning bonuses for utility executives after wildfires they cause, a fast-pay program for victims, a statewide wildfire strategy, a data-sharing platform, and a ban on speculative wildfire-claim investing by hedge funds and private equity.