Cal. PUC § 3299.100 — California Code / Code puc / Division 1 / Part 6 / Chapter 6 / Section 3299.100
Section 3299.100
Status: in_force

(a) For purposes of this section, “third-party entity” means an entity, other than a large electrical corporation, other insurer or reinsurer admitted to conduct the business of insurance in California or in compliance with Sections 1765.1 and 1765.2 of the Insurance Code, or a law firm or business retained by an insurer for the purpose of assisting with the pursuit of the property insurer’s subrogation rights, that seeks to enter into an agreement with a property insurer.

(b) Any agreement entered into on or after the effective date of this chapter by a property insurer to sell, assign, or transfer, in whole or in part, to a third-party entity, a right of subrogation, reimbursement, or recovery, as applicable, including a right to recover attorney fees, resulting from a wildfire that is ignited on or after the effective date of this chapter and that destroys 1,000 or more structures is subject to all of the following:

(1) Before entering into an agreement with the third-party entity, the property insurer shall first offer to settle its right of subrogation, reimbursement, or recovery, as applicable, on the same terms and conditions as the proposed agreement, to the large electrical corporation, if any, that provides electrical service to the service area in which the wildfire ignited.

(2) Within 30 days of the property insurer making the offer to settle pursuant to paragraph (1), the large electrical corporation shall accept or reject the offer to settle or otherwise reach an agreement on mutually agreeable terms with the property insurer for the settlement of that right with the large electrical corporation.

(3) If the large electrical corporation accepts the property insurer’s offer to settle, or otherwise reaches an agreement with the property insurer on mutually agreeable terms, the property insurer shall execute a release that will release the large electrical corporation from, and bar the property insurer from bringing or pursuing, any lawsuit, claim, arbitration, or other legal action of any kind against the large electrical corporation for damages resulting from the applicable fire with respect to the rights sold, assigned, or transferred to the electrical corporation. The release shall not preclude actions to enforce the terms of the accepted offer or agreement between the electrical corporation and the property insurer.

(4) If the large electrical corporation rejects the offer made, or fails to reach an agreement within 30 days, pursuant to paragraph (2), the property insurer and the third-party entity may enter into an agreement for the sale, assignment, or transfer of the right under either of the following conditions:

(A) The agreement is on the same terms and conditions as the offer made to the large electrical corporation pursuant to paragraph (1).

(B) If the agreement is on different financial terms and conditions from the offer that was initially rejected by the large electrical corporation, the property insurer has first made an offer on those new terms and conditions to the large electrical corporation pursuant to paragraph (1), and the large electrical corporation has rejected that offer.

(5) An agreement for the sale, assignment, or transfer of the right described in this subdivision between a property insurer and a third-party entity that fails to conform to the requirements of this subdivision shall be void and unenforceable.

(c) (1) Any agreement and exchange of information, including the offers made or documentation or other evidence submitted for purposes of reviewing, approving, or denying offers and any acceptance or rejection of an offer made to or by a large electrical corporation, pursuant to subdivision (b) shall be subject to a nondisclosure agreement and shall not be disclosed unless any of the following applies:

(A) Disclosure shall be made to the administrator or a public agency to the extent required by law. Information disclosed pursuant to this subparagraph is not a public writing and shall not be subject to public disclosure pursuant to the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code) or any other law.

(B) For a property insurer, disclosure to a third-party insurer or reinsurer that is a party to a contract with the property insurer related to the right if the person or entity to whom disclosure is made agrees to the same nondisclosure terms.

(C) Internal disclosure as necessary for internal business purposes, including, but not limited to, underwriting if the person or entity to whom disclosure is made agrees to the same nondisclosure terms.

(2) Any agreement and exchange of information, including an offer made or documentation or other evidence submitted for purposes of reviewing, approving, or denying offers and any acceptance or rejection of an offer made to an electrical corporation, pursuant to subdivision (b) shall not be admissible, and shall not be used, subject to discovery or compulsion, in any proceeding, including civil litigation, except for a judicial or administrative proceeding involving either of the following:

(A) An action to enforce the agreement following a breach of the agreement between the large electrical corporation and the property insurer entered into pursuant to this section.

(B) A violation of this section.

(d) An agreement between a property insurer and a third party entity shall not provide for financial participation by the third-party entity in an agreement entered into between the property insurer and a large electrical corporation pursuant to subdivision (b).

(e) A nondisclosure agreement between a property insurer and a third-party entity prohibiting the disclosure of the terms and conditions of an offer for an agreement subject to this section shall not prohibit the disclosure of those terms and conditions to the large electrical corporation as required pursuant to paragraph (1) of subdivision (b). A large electrical corporation to which those terms and conditions are disclosed shall not disclose that information to any third-party that is not subject to the nondisclosure agreement.

(f) This section does not apply to a California domestic insurer if its annual property line direct written premiums are less than three hundred million dollars ($300,000,000).