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Gavin Newsom settles on narrower wildfire liability bill after lawmakers reject his ambitious cost-shifting proposal

Governor Gavin Newsom reached a compromise on a wildfire liability bill after Democratic lawmakers rejected his more ambitious plan to shift costs from investor-owned utilities to insurance companies and survivors. The final agreement, filed as SB 492, includes measures to block hedge funds from profiting from wildfire claims, prevent utility CEOs from receiving bonuses after their companies ignite a blaze, and establish a "fast-pay" program to accelerate payments for survivors. However, the bill does not include Newsom's primary goal of eliminating subrogation, which allows insurance companies to sue utilities to recoup losses. Lawmakers and insurance companies argued that removing this practice would disrupt the market and increase premiums. The administration announced that the bill provides progress on wildfire preparedness and data sharing, but utility companies warned that the current plan leaves the state at risk of higher bills and constrained investment. Newsom blamed "Big Insurance" and hedge funds for blocking his original proposal, noting that the markets responded with a significant drop in utility stocks. The administration announced that the bill will be passed to the next governor, and lawmakers are expected to vote on the proposal on Tuesday morning.

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