WEBVTT

00:35:02.800 --> 00:35:04.535
WELCOME. I AM CALLING TO ORDER

00:35:04.602 --> 00:35:05.970
THIS JOINT INFORMATIONAL

00:35:06.037 --> 00:35:07.238
HEARING OF THE ASSEMBLY

00:35:07.305 --> 00:35:08.473
COMMITTEE ON UTILITIES AND

00:35:08.539 --> 00:35:10.341
ENERGY AND THE ASSEMBLY

00:35:10.408 --> 00:35:12.143
COMMITTEE ON INSURANCE. VERY

00:35:12.210 --> 00:35:14.245
PLEASED TO BE JOINED BY MY

00:35:14.312 --> 00:35:15.713
CO-CHAIR, ASSEMBLY MEMBER

00:35:15.780 --> 00:35:17.114
CALDERON, WHO CHAIRS OUR

00:35:17.181 --> 00:35:18.983
INSURANCE COMMITTEE. AS A

00:35:19.050 --> 00:35:20.084
REMINDER, THIS IS THE THIRD

00:35:20.151 --> 00:35:22.153
HEARING IN OUR SERIES ON

00:35:22.220 --> 00:35:24.021
CALIFORNIA'S WILDFIRE CRISIS.

00:35:24.088 --> 00:35:26.157
TODAY WE TURN TO THE TOPIC OF

00:35:26.224 --> 00:35:27.258
INSURANCE SUBROGATION, WHICH IS

00:35:27.325 --> 00:35:28.993
THE LARGEST SINGLE SOURCE OF

00:35:29.060 --> 00:35:31.896
UTILITY WILDFIRE LIABILITY. AND

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WE'LL BEGIN TO EXPLORE WHAT ANY

00:35:33.764 --> 00:35:35.566
POTENTIAL CHANGES TO THE STATUS

00:35:35.633 --> 00:35:38.002
QUO WOULD MEAN FOR CALIFORNIANS.

00:35:38.069 --> 00:35:38.769
AND I THINK IT'S ALWAYS

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IMPORTANT TO REMIND OURSELVES

00:35:39.704 --> 00:35:40.938
THAT WHETHER WE'RE TALKING

00:35:41.005 --> 00:35:43.841
ABOUT CALIFORNIANS AS UTILITY

00:35:43.908 --> 00:35:46.010
RATEPAYERS OR INSURANCE PREMIUM

00:35:46.077 --> 00:35:47.812
PAYERS OR TAXPAYERS, WE ARE

00:35:47.879 --> 00:35:49.146
TALKING ABOUT ALL THE SAME

00:35:49.213 --> 00:35:50.982
PEOPLE. AND SO THIS IS A

00:35:51.048 --> 00:35:53.150
CONVERSATION NOT ABOUT A FIGHT

00:35:53.217 --> 00:35:54.285
BETWEEN TWO OF THE LARGEST

00:35:54.352 --> 00:35:56.020
INDUSTRIES IN THE STATE, BUT

00:35:56.087 --> 00:35:58.256
ABOUT WHAT IS RIGHT FOR

00:35:58.322 --> 00:35:59.624
CALIFORNIANS IN CALIFORNIA

00:35:59.690 --> 00:36:00.992
FAMILIES. BEFORE WE BEGIN, I

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HAVE SOME BRIEF HOUSEKEEPING

00:36:02.927 --> 00:36:04.295
ANNOUNCEMENTS. FIRST, PUBLIC

00:36:04.362 --> 00:36:05.863
COMMENT IS WELCOME IN PERSON,

00:36:05.930 --> 00:36:07.231
AND WE'LL HAVE AN OPPORTUNITY

00:36:07.298 --> 00:36:08.966
FOR THAT AT THE CONCLUSION OF

00:36:09.033 --> 00:36:11.502
TODAY'S PANELS. OTHERWISE, YOU

00:36:11.569 --> 00:36:14.038
MAY SUBMIT COMMENT ONLINE VIA

00:36:14.105 --> 00:36:16.140
THE COMMITTEE WEBSITE. AND

00:36:16.207 --> 00:36:17.642
LASTLY, AS IS CUSTOMARY, WE

00:36:17.708 --> 00:36:19.777
WILL NOT ACCEPT DISRUPTIVE

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BEHAVIOR AND WILL APPLY

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ASSEMBLY RULES TO MAINTAIN

00:36:23.080 --> 00:36:26.284
ORDER AND RUN A FAIR HEARING.

00:36:26.350 --> 00:36:28.486
WITH THAT, WHEN A UTILITY'S

00:36:28.553 --> 00:36:30.555
EQUIPMENT SPARKS A WILDFIRE,

00:36:30.621 --> 00:36:32.023
CALIFORNIANS PAY FOR IT TWICE

00:36:32.089 --> 00:36:33.457
OVER. THEY PAY THROUGH THEIR

00:36:33.524 --> 00:36:34.892
ELECTRIC BILLS, WHICH FUND

00:36:34.959 --> 00:36:35.960
UTILITY SETTLEMENTS IN THE

00:36:36.027 --> 00:36:37.495
WILDFIRE FUND, AND THEY ALSO

00:36:37.562 --> 00:36:38.896
PAY THROUGH THEIR INSURANCE

00:36:38.963 --> 00:36:40.364
PREMIUMS, WHICH FUND THE CLAIMS

00:36:40.431 --> 00:36:42.800
THAT INSURERS PAY OUT AFTER A

00:36:42.867 --> 00:36:45.403
FIRE. IN ALL CASES, THESE ARE

00:36:45.469 --> 00:36:48.205
THE SAME HOUSEHOLDS, AND

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SUBROGATION SITS RIGHT WHERE

00:36:49.340 --> 00:36:51.842
THESE TWO SYSTEMS MEET. THE

00:36:51.909 --> 00:36:53.277
WILDFIRE FUND ADMINISTRATOR

00:36:53.344 --> 00:36:55.079
ESTIMATES THAT ELIMINATING

00:36:55.146 --> 00:36:56.547
SUBROGATION WOULD CUT UTILITY

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SETTLEMENT COSTS BY ROUGHLY 35

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TO 40%. HOWEVER, ANY CHANGES

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COME COME WITH TRADE OFFS. AND

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IF WE'RE JUST REARRANGING DECK

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CHAIRS ON THE TITANIC, IT IS

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INDEED NOT A VERY PRODUCTIVE

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ENDEAVOR. SO I THINK THERE'S

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REALLY THREE QUESTIONS THAT

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THIS COMMITTEE HAS BEEN

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EXPLORING AND THAT WE WILL BE

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EXPLORING AS PART OF TODAY'S

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HEARING. AND THE FIRST IS WHAT,

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IF ANY, CHANGES ARE NEEDED TO

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ENSURE THAT THE VICTIMS OF

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WILDFIRES AND OTHER CLIMATE

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DISASTERS RECEIVE FAST AND FAIR

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COMPENSATION AND ARE ABLE TO

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REBUILD THEIR LIVES AS QUICKLY

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AS POSSIBLE. AND SECOND, WHAT

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IS THE LOWEST COST AND MOST

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EFFICIENT WAY FOR US TO MANAGE

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THE COSTS OF THESE CATASTROPHIC

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DISASTERS? AND LASTLY, WHAT IS

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THE SMARTEST WAY FOR

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CALIFORNIANS TO SOCIALIZE THE

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RISK AS WE CONTINUE TO CONFRONT

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CLIMATE DISASTERS THAT ARE MORE

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FREQUENT AND MORE EXPENSIVE?

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THE LAST THING I'LL SAY IS TO

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SORT OF SET IT, SET IT ALREADY.

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I REALLY DO NOT. WE DO NOT WANT

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THIS TO BE A FOOD FIGHT BETWEEN

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INDUSTRIES. WHEN A THING THAT

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WE OFTEN REMINDED OURSELVES AS

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WE WERE HAVING THESE

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CONVERSATIONS AT THE END OF

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SESSION WAS THE AFRICAN PROVERB

00:38:08.953 --> 00:38:10.688
THAT WHEN TWO ELEPHANTS ARE

00:38:10.755 --> 00:38:12.823
FIGHTING, IT IS THE GRASS THAT

00:38:12.890 --> 00:38:14.892
SUFFERS. AND SO THE WORK OF

00:38:14.959 --> 00:38:15.993
THIS COMMITTEE AND THE WORK OF

00:38:16.060 --> 00:38:18.729
THE LEGISLATURE, AS WE NAVIGATE

00:38:18.796 --> 00:38:20.398
THESE POLICY CHALLENGES, REALLY

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IS TO ENSURE THAT IT'S THE

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GRASS THAT WE ARE CENTERED ON

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AND THE GRASS THAT WE ARE

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TAKING CARE OF. SO WITH THAT,

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I'M LOOKING FORWARD TO TODAY'S

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DISCUSSION AND VERY PLEASED TO

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BE JOINED BY MY COLLEAGUE, THE

00:38:34.478 --> 00:38:35.479
CHAIR OF OUR INSURANCE

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COMMITTEE, ASSEMBLYMEMBER

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CALDERON. GOOD MORNING. FIRST,

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I WANT TO THANK CHAIRWOMAN

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PETRIE-NORRIS FOR HER

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DEDICATION TO THIS IMPORTANT

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ISSUE AND FOR HER PARTNERSHIP

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AND HER STAFF IN ARRANGING THIS

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COMMITTEE HEARING. SUBROGATION,

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PARTICULARLY IN THE CONTEXT OF

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UTILITY CAUSED WILDFIRES, IS A

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COMPLEX PROCESS THAT IS OFTEN

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INVISIBLE TO THE GENERAL PUBLIC,

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BUT IS A LOOMING RISK OF MORE

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DESTRUCTIVE WILDFIRES. WAVES ON

00:39:10.848 --> 00:39:13.684
BOTH THE INSURANCE AND ENERGY

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INDUSTRIES, POLICY DISCUSSIONS

00:39:15.519 --> 00:39:17.621
ABOUT THE ROLE AND MECHANICS OF

00:39:17.688 --> 00:39:19.090
SUBROGATION HAVE COME TO THE

00:39:19.156 --> 00:39:20.891
FOREFRONT. THESE DISCUSSIONS

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ARE ESPECIALLY SENSITIVE

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AGAINST THE BACKDROP OF THE

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STATE'S ONGOING CRISIS IN

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INSURANCE AVAILABILITY AND

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AFFORDABILITY. ON THE ONE HAND,

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AND RISING ENERGY COSTS ON THE

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OTHER. I HOPE THAT TODAY'S

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HEARING WILL PROVIDE AN

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OPPORTUNITY TO EXPLORE THE

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SUBROGATION PROCESS IN MORE

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DETAIL, AND TO BETTER

00:39:39.310 --> 00:39:41.345
UNDERSTAND HOW SUBROGATION MAY

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IMPACT OUR GOALS OF KEEPING

00:39:42.713 --> 00:39:44.982
BOTH INSURANCE AND ENERGY

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AFFORDABLE AND AVAILABLE FOR

00:39:46.517 --> 00:39:48.819
ALL CALIFORNIANS. THANK YOU TO

00:39:48.886 --> 00:39:50.721
ALL OF OUR EXPERT PANELISTS AND

00:39:50.788 --> 00:39:51.822
THOSE IN ATTENDANCE FOR BEING

00:39:51.889 --> 00:39:53.691
HERE, AND I LOOK FORWARD TO AN

00:39:53.758 --> 00:39:57.228
INFORMATIVE DISCUSSION. THANK

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YOU, MADAM CHAIR. ALL RIGHT.

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WITH THAT, I THINK WE ARE READY

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TO JUMP IN. I'D LIKE TO WELCOME

00:40:02.767 --> 00:40:06.437
MARK GROSSFELD, MISS NANCY

00:40:06.504 --> 00:40:09.440
WATKINS AND MR. MICHAEL WAARA.

00:40:09.507 --> 00:40:10.908
ALL RIGHT. I THINK YOU ALL CAN

00:40:10.975 --> 00:40:12.543
CAN COME UP. I THINK WE'RE

00:40:12.610 --> 00:40:14.145
GOING TO BEGIN WITH MR.

00:40:14.211 --> 00:40:16.347
GROSSFELD, WHO IS GOING TO BE

00:40:16.413 --> 00:40:17.948
PROVIDING JUST KIND OF A

00:40:18.015 --> 00:40:20.284
FACTUAL OVERVIEW OF HOW THE

00:40:20.351 --> 00:40:22.486
SUBROGATION PROCESS CURRENTLY

00:40:22.553 --> 00:40:26.357
WORKS IN CALIFORNIA. ALL RIGHT,

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MR. GROSSFELD, OVER TO YOU. I

00:40:37.601 --> 00:40:39.336
THINK YOU NEED TO PUSH YOUR

00:40:39.403 --> 00:40:48.012
BUTTON TO TURN THAT ON. THAT

00:40:48.078 --> 00:40:50.815
ONE. THAT'S IT. I'LL PUT ON MY

00:40:50.881 --> 00:40:51.982
GLASSES. THEN I CAN READ THE

00:40:52.049 --> 00:40:53.918
ONE THAT SAYS MIKE ON IT. ALL

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RIGHT. VERY GOOD. WELL, GOOD

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MORNING EVERYONE. THANK YOU

00:40:57.054 --> 00:40:58.389
AGAIN FOR THE OPPORTUNITY TO

00:40:58.455 --> 00:41:00.391
SPEAK HERE TODAY. AGAIN, MY

00:41:00.457 --> 00:41:02.226
NAME IS MARK RODEFELD. I'M HERE

00:41:02.293 --> 00:41:04.562
ON MY OWN BEHALF. PERSONAL.

00:41:04.628 --> 00:41:07.064
PERSONALLY, I AM A TRIAL LAWYER

00:41:07.131 --> 00:41:08.499
WHO HAS PRACTICED FOR OVER 40

00:41:08.566 --> 00:41:11.402
YEARS ACROSS THE UNITED STATES,

00:41:11.468 --> 00:41:12.803
REPRESENTING BOTH INDIVIDUALS

00:41:12.870 --> 00:41:15.272
AND INSURERS IN PROPERTY

00:41:15.339 --> 00:41:17.508
MATTERS INVOLVING WILDFIRES AND

00:41:17.575 --> 00:41:20.377
OTHER NATURAL DISASTERS. SO I'M

00:41:20.444 --> 00:41:22.179
COMING HERE FROM A STANDPOINT

00:41:22.246 --> 00:41:24.348
OF HOPEFULLY GIVING A

00:41:24.415 --> 00:41:26.550
PERSPECTIVE FROM THE WORK

00:41:26.617 --> 00:41:28.319
THAT'S DONE IN PREPARATION FOR

00:41:28.385 --> 00:41:30.187
THESE MATTERS AND WHY THAT WORK

00:41:30.254 --> 00:41:33.324
IS ESSENTIAL FOR PURPOSES OF

00:41:33.390 --> 00:41:34.425
CONTINUING THE EFFORTS FOR

00:41:34.491 --> 00:41:35.960
PROPERTY SUBROGATION IN THE

00:41:36.026 --> 00:41:37.328
STATE OF CALIFORNIA, BECAUSE

00:41:37.394 --> 00:41:39.463
THAT'S WHY WE'RE HERE TODAY. I

00:41:39.530 --> 00:41:42.333
ALSO COME FROM A PERSPECTIVE OF

00:41:42.399 --> 00:41:43.767
BEING A COMMITTEE MEMBER ON THE

00:41:43.834 --> 00:41:45.970
TECHNICAL COMMITTEE OF 921,

00:41:46.036 --> 00:41:49.173
NFPA 921, WHICH IS THE NATIONAL

00:41:49.240 --> 00:41:50.941
GUIDELINES NATIONAL STANDARD

00:41:51.008 --> 00:41:56.747
FOR FIRE INVESTIGATIONS AND FOR

00:41:56.814 --> 00:41:57.815
WILDFIRES. I HELPED TO WRITE

00:41:57.882 --> 00:42:00.718
THE CHAPTER ON WILDFIRE

00:42:00.784 --> 00:42:04.255
INVESTIGATIONS RELATIVE TO HOW

00:42:04.321 --> 00:42:05.422
THEY'RE CONDUCTED IN THE FIELD

00:42:05.489 --> 00:42:07.491
BY INVESTIGATORS. SO I HOPE

00:42:07.558 --> 00:42:08.993
THAT INFORMATION AS WELL CAN

00:42:09.059 --> 00:42:10.794
CAN ASSIST US IN OUR

00:42:10.861 --> 00:42:12.897
CONVERSATION HERE TODAY. AND I

00:42:12.963 --> 00:42:13.664
UNDERSTAND WE'RE HERE TO

00:42:13.731 --> 00:42:15.099
EXAMINE HOW SUBROGATION WORKS

00:42:15.165 --> 00:42:16.901
WITHIN THE CALIFORNIA UTILITY

00:42:16.967 --> 00:42:18.702
CAUSED WILDFIRE FRAMEWORK. SO

00:42:18.769 --> 00:42:20.604
I'M GOING TO FOCUS SIMPLY ON

00:42:20.671 --> 00:42:22.973
THE UTILITY FIRE ASPECT OF

00:42:23.040 --> 00:42:24.108
THINGS. ALTHOUGH WE DO KNOW

00:42:24.174 --> 00:42:25.910
THAT WILDFIRES HAPPEN FROM A

00:42:25.976 --> 00:42:28.412
VARIETY OF SOURCES, NOT SIMPLY

00:42:28.479 --> 00:42:31.248
UTILITIES. AND FROM A ROOT

00:42:31.315 --> 00:42:33.150
QUESTION STANDPOINT, I GUESS

00:42:33.217 --> 00:42:34.652
WHAT WE'RE HERE TO LOOK AT IS

00:42:34.718 --> 00:42:35.953
WOULD CALIFORNIANS BE BETTER

00:42:36.020 --> 00:42:38.088
OFF AS A WHOLE IF STATUTORY

00:42:38.155 --> 00:42:40.291
CHANGE WERE TO OCCUR TO

00:42:40.357 --> 00:42:42.026
SUBROGATION RECOVERY, IF IT WAS

00:42:42.092 --> 00:42:43.193
REDUCED OR ELIMINATED IN THE

00:42:43.260 --> 00:42:45.729
CONTEXT OF UTILITY CAUSED

00:42:45.796 --> 00:42:48.966
WILDFIRES? THE TAKEAWAY, I

00:42:49.033 --> 00:42:50.734
BELIEVE, IS TO PROTECT

00:42:50.801 --> 00:42:51.769
CALIFORNIA LIVES. THAT'S THE

00:42:51.835 --> 00:42:54.338
MAIN TAKEAWAY HERE. AND TO

00:42:54.405 --> 00:42:56.173
MAINTAIN A STABILIZED INSURANCE

00:42:56.240 --> 00:42:57.408
MARKET AND HOLD UTILITIES TO

00:42:57.474 --> 00:43:00.144
THE HIGHEST SAFETY STANDARDS, I

00:43:00.210 --> 00:43:01.245
THINK SUBROGATION RIGHTS OUGHT

00:43:01.312 --> 00:43:04.081
TO BE PRESERVED. AND SORRY, MR.

00:43:04.148 --> 00:43:05.950
GREENFELD, JUST I THINK WE WANT

00:43:06.016 --> 00:43:07.718
TO REWIND A LITTLE BIT, BECAUSE

00:43:07.785 --> 00:43:10.521
I THINK WHAT WE WANT YOU TO DO

00:43:10.587 --> 00:43:12.323
IS AND I UNDERSTAND YOU SPEND

00:43:12.389 --> 00:43:13.791
YOUR YOUR LIFE AND CAREER DOING

00:43:13.857 --> 00:43:15.759
THIS. WHAT BECAME ABUNDANTLY

00:43:15.826 --> 00:43:17.428
CLEAR AS WE STARTED TO HAVE

00:43:17.494 --> 00:43:18.429
CONVERSATIONS ABOUT THIS

00:43:18.495 --> 00:43:20.264
TOWARDS THE END OF SESSION, IS

00:43:20.331 --> 00:43:22.766
THAT JUST THE MECHANICS OF

00:43:22.833 --> 00:43:24.568
SUBROGATION ARE NOT WELL

00:43:24.635 --> 00:43:26.370
UNDERSTOOD AMONGST THE

00:43:26.437 --> 00:43:27.871
LEGISLATURE, THE GENERAL PUBLIC

00:43:27.938 --> 00:43:30.007
AND ADVOCATES. SO THE ROLE WE

00:43:30.074 --> 00:43:31.775
WANT YOU TO PLAY AND WHAT YOU

00:43:31.842 --> 00:43:33.243
WHAT WE WANT YOU TO TALK ABOUT

00:43:33.310 --> 00:43:35.679
RIGHT NOW IS NOT YOUR OPINION

00:43:35.746 --> 00:43:37.614
ON WHETHER THE CURRENT SYSTEM

00:43:37.681 --> 00:43:41.485
IS GOOD OR BAD, OR ANY ADVOCACY

00:43:41.552 --> 00:43:43.020
REGARDING WHETHER THAT SYSTEM

00:43:43.087 --> 00:43:44.722
SHOULD CHANGE. WHAT WE WANT YOU

00:43:44.788 --> 00:43:47.257
TO EXPLAIN TO US IS PURELY THE

00:43:47.324 --> 00:43:50.527
FACTS OF THE STATUS QUO AND HOW

00:43:50.594 --> 00:43:52.629
SUBROGATION WORKS. AND THAT IS

00:43:52.696 --> 00:43:54.465
PRECISELY WHY I'M HERE. AWESOME.

00:43:54.531 --> 00:43:57.334
PERFECT. VERY GOOD. SO WHAT IS

00:43:57.401 --> 00:43:58.335
SUBROGATION? THERE YOU GO.

00:43:58.402 --> 00:43:59.336
THERE'S, THERE'S YOUR, THERE'S

00:43:59.403 --> 00:44:01.638
YOUR, YOUR, YOUR, YOUR LEAD IN.

00:44:01.705 --> 00:44:02.873
SIMPLY PUT IN THE WAY THAT I'VE

00:44:02.940 --> 00:44:05.242
TAUGHT IN THE PAST IS YOU, IT'S

00:44:05.309 --> 00:44:07.077
STEPPING IN THE SHOES. A

00:44:07.144 --> 00:44:08.278
SEGREGATING INSURER IS STEPPING

00:44:08.345 --> 00:44:09.913
INTO THE SHOES OF ITS INSURED.

00:44:09.980 --> 00:44:11.415
TO THE EXTENT IT HAS MADE A

00:44:11.482 --> 00:44:13.884
PAYMENT TO ITS INSURED ON A

00:44:13.951 --> 00:44:15.619
PARTICULAR LOSS IN THE CONTEXT

00:44:15.686 --> 00:44:18.188
OF A OF A WILDFIRE THAT THOSE

00:44:18.255 --> 00:44:20.057
INSUREDS HAVE PROPERTY LOSSES

00:44:20.124 --> 00:44:22.192
WHICH STEM FROM THE EVENT

00:44:22.259 --> 00:44:25.429
ITSELF. THEY ARE PAID PROMPTLY,

00:44:25.496 --> 00:44:26.830
QUICKLY BY THE INSURANCE

00:44:26.897 --> 00:44:28.632
COMPANY. AND THE INSURANCE

00:44:28.699 --> 00:44:30.067
COMPANY, THEREFORE, IS A MATTER

00:44:30.134 --> 00:44:32.269
OF RIGHT THROUGH EITHER COMMON

00:44:32.336 --> 00:44:35.239
LAW, CONTRACT OR STATUTE STEPS

00:44:35.305 --> 00:44:36.573
INTO THE SHOES OF ITS INSURED

00:44:36.640 --> 00:44:38.142
TO SEEK RECOVERY AGAINST THE

00:44:38.208 --> 00:44:40.544
PARTY THAT CAUSED THE FIRE.

00:44:40.611 --> 00:44:42.780
THAT'S THE SIMPLE CONCEPT. IT'S

00:44:42.846 --> 00:44:45.516
IN ALL 50 STATES. IT'S

00:44:45.582 --> 00:44:47.351
WORLDWIDE. IT'S BEEN AROUND FOR

00:44:47.418 --> 00:44:49.586
A LONG, LONG TIME. I'M NOT

00:44:49.653 --> 00:44:51.155
GOING TO GO ALL THE WAY BACK TO

00:44:51.221 --> 00:44:53.123
ROMAN TIME, BUT IT WAS THERE,

00:44:53.190 --> 00:44:56.360
TRUST ME. AND I WASN'T YET. BUT

00:44:56.427 --> 00:44:57.795
NEVERTHELESS, IT IS A PILLAR OF

00:44:57.861 --> 00:44:59.596
THE COMMON LAW. AND IT'S OFTEN

00:44:59.663 --> 00:45:01.732
EMBODIED, AS I SAY, IN STATUTE

00:45:01.799 --> 00:45:03.534
AND CONTRACT, AND IT'S EVOLVED

00:45:03.600 --> 00:45:05.436
IN THE UNITED STATES OVER

00:45:05.502 --> 00:45:09.673
CENTURIES. THE TAKEAWAY AGAIN,

00:45:09.740 --> 00:45:14.378
WOULD BE HOW THIS WOULD HOW

00:45:14.445 --> 00:45:15.813
SUBROGATION IN THE CONTEXT OF

00:45:15.879 --> 00:45:19.016
UTILITY CAUSED WILDFIRES, IS

00:45:19.083 --> 00:45:22.753
FACTUALLY RELEVANT TODAY. IT'S

00:45:22.820 --> 00:45:24.688
A LEGAL ENGINE THAT HAS A TRACK

00:45:24.755 --> 00:45:25.889
RECORD OF REDUCING THE RISK OF

00:45:25.956 --> 00:45:28.092
FUTURE WILDFIRES, THAT I CAN

00:45:28.158 --> 00:45:29.660
SAY FROM MY WORK IN THE STATE

00:45:29.726 --> 00:45:30.961
OF CALIFORNIA, GOING FOR THE

00:45:31.028 --> 00:45:33.697
LAST TWO DECADES, SUBROGATION

00:45:33.764 --> 00:45:36.333
HAS REDUCED THE NUMBER OF FIRES

00:45:36.400 --> 00:45:38.135
THAT HAVE OCCURRED. AND

00:45:38.202 --> 00:45:40.304
ULTIMATELY, THAT IS, I THINK,

00:45:40.370 --> 00:45:42.873
EVERYONE'S MAIN GOAL NOT TO

00:45:42.940 --> 00:45:44.942
ADDRESS THE FIRE THAT HAPPENED

00:45:45.008 --> 00:45:46.810
YESTERDAY, BUT TO PREVENT THE

00:45:46.877 --> 00:45:48.979
FIRE THAT COULD HAPPEN TOMORROW.

00:45:49.046 --> 00:45:51.482
SO I LOOK AT IT AND I OFTEN SAY,

00:45:51.548 --> 00:45:52.649
YOU KNOW, NEVER MIND WHAT'S IN

00:45:52.716 --> 00:45:54.184
THE REAR VIEW MIRROR, LET'S

00:45:54.251 --> 00:45:55.819
LOOK OUT THE WINDSHIELD AND HOW

00:45:55.886 --> 00:45:58.622
YOU CAN HELP PREVENT FIRES

00:45:58.689 --> 00:46:01.191
TOMORROW. I THINK I CAN SAFELY

00:46:01.258 --> 00:46:03.694
SAY FACTUALLY, SUBROGATION IS A

00:46:03.760 --> 00:46:05.496
LEGAL ENGINE THAT ASSISTS IN

00:46:05.562 --> 00:46:07.598
THAT. IT ALSO IS A LEGAL ENGINE

00:46:07.664 --> 00:46:09.433
IN TERMS OF SHIELDING DISASTER

00:46:09.500 --> 00:46:11.335
VICTIMS FROM THE LITIGATION

00:46:11.401 --> 00:46:13.070
BURDENS, BECAUSE THE CARRIER

00:46:13.137 --> 00:46:16.740
PICKS UP THE CLAIM, THE CARRIER

00:46:16.807 --> 00:46:17.841
PRESENTS THE CLAIM, THEN TO THE

00:46:17.908 --> 00:46:19.076
PARTY THE CARRIER BELIEVES TO

00:46:19.143 --> 00:46:21.011
BE RESPONSIBLE FOR THE FIRE,

00:46:21.078 --> 00:46:23.847
AND THE CARRIER'S INSURED IS

00:46:23.914 --> 00:46:25.682
RELIEVED OF THE BURDEN OF

00:46:25.749 --> 00:46:28.152
HAVING TO PURSUE THAT RECOVERY

00:46:28.218 --> 00:46:32.489
ON THEIR OWN. I AND AGAIN, I'M

00:46:32.556 --> 00:46:33.590
NOT GOING TO CONTEST THINGS,

00:46:33.657 --> 00:46:35.159
BUT THERE WAS SOMETHING YOU

00:46:35.225 --> 00:46:36.827
SAID FACTUALLY THAT 40%,

00:46:36.894 --> 00:46:38.662
POTENTIALLY SOMEBODY SAID 40%

00:46:38.729 --> 00:46:40.731
OF CLAIMS COULD BE REDUCED IN

00:46:40.797 --> 00:46:41.498
WILDFIRE. MATTERS OF

00:46:41.565 --> 00:46:44.401
SUBROGATION WAS ELIMINATED. IT

00:46:44.468 --> 00:46:45.435
WOULD JUST MEAN THAT

00:46:45.502 --> 00:46:46.570
INDIVIDUALS WOULD BE HAVING TO

00:46:46.637 --> 00:46:48.705
TO PUSH FORWARD ON THOSE CLAIMS.

00:46:48.772 --> 00:46:52.409
SO IN ANY EVENT, THAT'S I THANK

00:46:52.476 --> 00:46:53.777
YOU. SORRY, I THINK YOU

00:46:53.844 --> 00:46:54.778
MISUNDERSTOOD WHAT I SAID. I

00:46:54.845 --> 00:46:56.880
SAID THAT I SAID TWO THINGS. I

00:46:56.947 --> 00:47:00.317
SAID 40% OF THE OUTFLOWS FROM

00:47:00.384 --> 00:47:01.718
THE WILDFIRE FUND ARE RELATED

00:47:01.785 --> 00:47:04.154
TO SUBROGATION CLAIMS. I ALSO

00:47:04.221 --> 00:47:05.989
SAID THE QUESTION, THE CORE

00:47:06.056 --> 00:47:07.291
QUESTION BEFORE US, AND I HAVE

00:47:07.357 --> 00:47:08.559
NOT ARRIVED AT AN ANSWER TO THE

00:47:08.625 --> 00:47:10.194
QUESTION. THAT'S WHY WE'RE

00:47:10.260 --> 00:47:11.562
HAVING A PUBLIC HEARING. THE

00:47:11.628 --> 00:47:14.164
CORE QUESTION BEFORE US IS, ARE

00:47:14.231 --> 00:47:15.265
THERE CHANGES THAT WOULD

00:47:15.332 --> 00:47:17.768
ACTUALLY SHRINK THAT PIE AND

00:47:17.834 --> 00:47:19.603
SHRINK THOSE OUTFLOWS? I ALSO

00:47:19.670 --> 00:47:20.671
SAID THAT IF WE'RE JUST

00:47:20.737 --> 00:47:22.039
REARRANGING DECK CHAIRS ON THE

00:47:22.105 --> 00:47:23.607
TITANIC, IT IS INDEED NOT A

00:47:23.674 --> 00:47:24.975
PRODUCTIVE EXERCISE. SO I DON'T

00:47:25.042 --> 00:47:26.376
THINK ANYONE IS ASSERTING THAT

00:47:26.443 --> 00:47:28.946
THERE'S A SOME, YOU KNOW,

00:47:29.012 --> 00:47:29.646
OPPORTUNITY TO WAVE A MAGIC

00:47:29.713 --> 00:47:32.149
WAND AND SAY 40%. AND I AGREE

00:47:32.216 --> 00:47:33.917
WITH YOU WHOLEHEARTEDLY THAT

00:47:33.984 --> 00:47:35.686
WHAT WE'RE AVOIDING IS ANOTHER

00:47:35.752 --> 00:47:36.853
TITANIC. THAT'S REALLY WHAT

00:47:36.920 --> 00:47:38.288
WE'RE LOOKING TO DO HERE. AND

00:47:38.355 --> 00:47:40.390
HOW WE DO THAT, IN PART THROUGH

00:47:40.457 --> 00:47:41.458
SUBROGATION IS THROUGH THE

00:47:41.525 --> 00:47:42.693
INVESTIGATIVE PROCESS THAT

00:47:42.759 --> 00:47:47.297
TAKES PLACE WHEN AN INSURANCE

00:47:47.364 --> 00:47:49.199
INDUSTRY BEGINS TO INVESTIGATE

00:47:49.266 --> 00:47:51.335
A FIRE, BECAUSE THAT HAPPENS

00:47:51.401 --> 00:47:53.003
WHEN THE FIRE IS STILL

00:47:53.070 --> 00:47:55.606
HAPPENING. IT IT, IT IS IT IS

00:47:55.672 --> 00:47:58.442
AT THE THE INITIAL STAGES WHEN

00:47:58.508 --> 00:48:02.045
SCIENTIFIC ANALYSIS BEGINS WITH

00:48:02.112 --> 00:48:03.814
MULTIDISCIPLINARY

00:48:03.880 --> 00:48:05.015
INVESTIGATIONS, WITH PEOPLE

00:48:05.082 --> 00:48:08.819
FROM ALL, ALL WALKS OF

00:48:08.885 --> 00:48:11.355
PROFESSIONAL EXPERTISE, FROM

00:48:11.421 --> 00:48:13.190
METALLURGISTS TO ELECTRICAL

00:48:13.257 --> 00:48:14.658
ENGINEERS, HIGH VOLTAGE

00:48:14.725 --> 00:48:17.094
ELECTRICAL ENGINEERS, FIRE

00:48:17.160 --> 00:48:20.030
SAFETY PEOPLE, FIRE SPREAD

00:48:20.097 --> 00:48:23.267
PEOPLE, FIRE SCIENTISTS. IT

00:48:23.333 --> 00:48:25.035
GOES ON AND ON. ALL OF THESE

00:48:25.102 --> 00:48:26.470
DISCIPLINES ARE BROUGHT

00:48:26.536 --> 00:48:29.039
TOGETHER TO INVESTIGATE A FIRE.

00:48:29.106 --> 00:48:31.908
AND THE APPLICATION OF THAT

00:48:31.975 --> 00:48:33.744
INVESTIGATION IS DRAWN FROM THE

00:48:33.810 --> 00:48:35.879
GUIDELINES OF LITERALLY TWO

00:48:35.946 --> 00:48:37.314
SOURCES, NFPA, WHICH I

00:48:37.381 --> 00:48:40.217
MENTIONED BEFORE, AND THE NWCG,

00:48:40.284 --> 00:48:41.585
WHICH IS THE NATIONAL WILDFIRE

00:48:41.652 --> 00:48:43.053
COORDINATING GROUP. BOTH OF

00:48:43.120 --> 00:48:45.922
THOSE ENTITIES HAVE ESTABLISHED

00:48:45.989 --> 00:48:47.424
THE GUIDELINES FOR PURPOSES OF

00:48:47.491 --> 00:48:50.227
HOW THESE INVESTIGATIONS ARE

00:48:50.294 --> 00:48:53.497
CONDUCTED, AND ALL OF THOSE

00:48:53.563 --> 00:48:55.699
GUIDELINES SUGGEST THAT THESE

00:48:55.766 --> 00:48:56.733
INVESTIGATIONS MUST BE

00:48:56.800 --> 00:48:57.768
COORDINATED THROUGH MULTIPLE,

00:48:57.834 --> 00:48:58.935
NOT JUST THE MULTIPLE

00:48:59.002 --> 00:48:59.970
DISCIPLINES, BUT FROM THE

00:49:00.037 --> 00:49:02.072
MULTIPLE POTENTIAL INTERESTS

00:49:02.139 --> 00:49:04.241
INVOLVED, POTENTIALLY CULPABLE

00:49:04.308 --> 00:49:07.511
THIRD PARTIES, VICTIMS, PUBLIC

00:49:07.577 --> 00:49:10.747
AGENCIES, ETC. AND FROM A

00:49:10.814 --> 00:49:13.650
STANDPOINT OF EXAMPLES IN

00:49:13.717 --> 00:49:16.253
WILDFIRE ACTIVITY, I THINK WE

00:49:16.320 --> 00:49:18.288
CAN SAFELY SAY, BECAUSE THE

00:49:18.355 --> 00:49:20.557
DATA WOULD SUPPORT IT, THAT

00:49:20.624 --> 00:49:21.958
WILDFIRE ACTIVITY ACTUALLY IN

00:49:22.025 --> 00:49:23.493
THE STATE OF CALIFORNIA. YES,

00:49:23.560 --> 00:49:24.628
THERE HAVE BEEN A COUPLE OF

00:49:24.695 --> 00:49:25.662
MAJOR WILDFIRES THAT HAVE

00:49:25.729 --> 00:49:26.763
OCCURRED. I KNOW THAT WE ALL

00:49:26.830 --> 00:49:28.799
KNOW THAT. BUT WILDFIRE

00:49:28.865 --> 00:49:31.668
ACTIVITY IN GENERAL CAUSED BY

00:49:31.735 --> 00:49:34.938
UTILITIES HAS REDUCED SINCE, I

00:49:35.005 --> 00:49:38.141
WOULD SAY, SAY, 2007. FOR

00:49:38.208 --> 00:49:39.943
EXAMPLE, WHEN WE HAD FIRES IN

00:49:40.010 --> 00:49:41.411
SOUTHERN CALIFORNIA AND SAN

00:49:41.478 --> 00:49:44.648
DIEGO, GAS AND ELECTRIC WAS

00:49:44.715 --> 00:49:45.682
INVOLVED IN THOSE. BUT SAN

00:49:45.749 --> 00:49:47.150
DIEGO GAS AND ELECTRIC REALLY

00:49:47.217 --> 00:49:50.754
HASN'T HAD A MAJOR WILDFIRE

00:49:50.821 --> 00:49:52.522
INSTANCE INVOLVING THEM SINCE

00:49:52.589 --> 00:49:55.125
THEN. AND, AND I THINK THAT IN

00:49:55.192 --> 00:49:56.993
MANY RESPECTS, IT'S DUE TO SOME

00:49:57.060 --> 00:49:58.061
OF THE CHANGES THAT WERE

00:49:58.128 --> 00:49:59.029
EFFECTUATED THROUGH WHAT WAS

00:49:59.096 --> 00:50:00.097
LEARNED THROUGH THE

00:50:00.163 --> 00:50:02.265
INVESTIGATIONS IN THOSE MATTERS

00:50:02.332 --> 00:50:04.735
MORE RECENTLY, AND I BELIEVE

00:50:04.801 --> 00:50:07.003
FACTUALLY SUPPORTED BY DATA IS,

00:50:07.070 --> 00:50:10.640
IS THAT SINCE 2022, PACIFIC GAS

00:50:10.707 --> 00:50:11.975
AND ELECTRIC HAS NOT HAD A

00:50:12.042 --> 00:50:14.544
MAJOR WILDFIRE INVOLVING IT. IT

00:50:14.611 --> 00:50:16.646
TOO, HAS BEEN EFFECTUATING

00:50:16.713 --> 00:50:18.448
CHANGES IN ITS SYSTEMS AND

00:50:18.515 --> 00:50:22.018
OPERATIONS BROUGHT ON BY THE

00:50:22.085 --> 00:50:23.887
INVESTIGATIONS AND THE

00:50:23.954 --> 00:50:25.655
LITIGATION THAT STEMMED FROM,

00:50:25.722 --> 00:50:27.657
I'LL CALL IT THE COLLECTIVELY,

00:50:27.724 --> 00:50:29.626
THE NAPA FIRES THAT OCCURRED IN

00:50:29.693 --> 00:50:31.361
2017 AND THE CAMPFIRE IN 2018.

00:50:31.428 --> 00:50:35.365
BUT THE POINT BEING THAT THIS

00:50:35.432 --> 00:50:37.567
SYSTEM WORKS THE WAY IT IS,

00:50:37.634 --> 00:50:39.002
BECAUSE THE INVESTIGATIONS THAT

00:50:39.069 --> 00:50:41.138
COME FROM THE SUBROGATION

00:50:41.204 --> 00:50:44.674
ELEMENT ARE, AND I DON'T MEAN

00:50:44.741 --> 00:50:45.742
TO SAY SUPERIOR, THEY'RE JUST

00:50:45.809 --> 00:50:47.577
MORE INVOLVED. THEY'RE THE

00:50:47.644 --> 00:50:50.147
PUBLIC SECTOR ITSELF. LOOK, CAL

00:50:50.213 --> 00:50:52.315
FIRE DOES A FANTASTIC JOB, BUT

00:50:52.382 --> 00:50:55.519
THE PUBLIC AGENCIES ARE REALLY

00:50:55.585 --> 00:50:57.320
FOCUSED ON, ON, ON THE MAIN

00:50:57.387 --> 00:50:59.189
ISSUE IS WHETHER OR NOT

00:50:59.256 --> 00:51:00.457
SOMETHING WAS AN INTENTIONALLY

00:51:00.524 --> 00:51:02.325
SET FIRE. DO THEY GO BEYOND

00:51:02.392 --> 00:51:03.827
THAT AT TIMES TO LOOK AT THINGS?

00:51:03.894 --> 00:51:05.929
YES, BUT THEY CAN'T CARRY THAT

00:51:05.996 --> 00:51:08.899
BURDEN ALONE. THERE'S A BIG GAP

00:51:08.965 --> 00:51:10.667
BETWEEN AN ORIGIN OF A FIRE AND

00:51:10.734 --> 00:51:12.169
WHAT THE ROOT CAUSE OF THE FIRE

00:51:12.235 --> 00:51:14.671
IS. AND I CAN CITE YOU EXAMPLES

00:51:14.738 --> 00:51:16.606
OF THE ROUND FIRE THAT OCCURRED,

00:51:16.673 --> 00:51:18.241
THE SADDLE RIDGE FIRE THAT

00:51:18.308 --> 00:51:20.677
OCCURRED WHERE THE STATE

00:51:20.744 --> 00:51:22.179
AGENCIES SIMPLY DIDN'T HAVE

00:51:22.245 --> 00:51:24.781
ENOUGH INFORMATION AVAILABLE TO

00:51:24.848 --> 00:51:26.583
THEM OR RESOURCES AVAILABLE TO

00:51:26.650 --> 00:51:28.718
THEM TO DRAW CONCLUSIONS AS TO

00:51:28.785 --> 00:51:31.955
THE ROOT CAUSES OF THOSE FIRES.

00:51:32.022 --> 00:51:33.657
SUBROGATION INVESTIGATIONS DID

00:51:33.723 --> 00:51:36.193
DO SO, AND THROUGH THOSE

00:51:36.259 --> 00:51:38.762
INVESTIGATIONS, INDIVIDUALS,

00:51:38.829 --> 00:51:40.897
INDIVIDUALS ALSO BENEFITED.

00:51:40.964 --> 00:51:42.032
BENEFITED THE DISASTER.

00:51:42.098 --> 00:51:43.433
SURVIVORS BENEFITED FROM THE

00:51:43.500 --> 00:51:45.268
WORK THAT'S DONE BY THE

00:51:45.335 --> 00:51:47.037
INSURANCE COMPANIES

00:51:47.103 --> 00:51:48.104
INVESTIGATIONS, BECAUSE THEY

00:51:48.171 --> 00:51:50.307
PIGGYBACK ON TO THE CASE.

00:51:50.373 --> 00:51:52.809
THAT'S JUST SIMPLE FACT. AND SO

00:51:52.876 --> 00:51:54.945
FROM THAT STANDPOINT,

00:51:55.011 --> 00:51:57.047
INDIVIDUALS BENEFIT. SOCIETY

00:51:57.113 --> 00:51:58.615
WILL BENEFIT FROM THE

00:51:58.682 --> 00:52:00.684
STANDPOINT OF REDUCING THE RISK

00:52:00.750 --> 00:52:03.487
OF THE FIRE. WE ALSO

00:52:03.553 --> 00:52:06.490
IMMEDIATELY DEPLOY, WE PRESERVE

00:52:06.556 --> 00:52:08.258
EVIDENCE. WE DO FORENSIC CHECKS

00:52:08.325 --> 00:52:10.393
AND BALANCES. SO WHEN EVIDENCE

00:52:10.460 --> 00:52:13.363
IS IS STORED, IT'S STORED

00:52:13.430 --> 00:52:14.397
PROPERLY. WE MAKE SURE THAT

00:52:14.464 --> 00:52:16.600
WHEN EVIDENCE COMES IN THAT

00:52:16.666 --> 00:52:18.735
WHEN IT IS INVESTIGATED,

00:52:18.802 --> 00:52:20.871
INSPECTED, IT IS NOT ALTERED OR

00:52:20.937 --> 00:52:23.773
DAMAGED. THOSE ARE ALL THINGS

00:52:23.840 --> 00:52:25.542
THAT, THROUGH THE GUIDELINES OF

00:52:25.609 --> 00:52:28.778
NFPA 921 AND THROUGH THE

00:52:28.845 --> 00:52:30.213
NATIONAL WILDFIRE COORDINATING

00:52:30.280 --> 00:52:33.049
GROUP, ARE ESSENTIAL FOR

00:52:33.116 --> 00:52:35.919
PURPOSES OF HAVING ALL PLAYERS

00:52:35.986 --> 00:52:37.521
INVOLVED TOGETHER FOR DOING

00:52:37.587 --> 00:52:39.322
THIS, BECAUSE IF YOU DON'T, YOU

00:52:39.389 --> 00:52:41.224
RUN THE RISK OF THINGS SUCH AS

00:52:41.291 --> 00:52:43.193
WHAT WE CALL CONFIRMATION BIAS

00:52:43.260 --> 00:52:47.197
OR OTHER ASPECTS OF FAULT IN IN

00:52:47.264 --> 00:52:49.299
A SCIENTIFIC ASPECT, IN A

00:52:49.366 --> 00:52:51.468
SCIENTIFIC STUDY. SO THE

00:52:51.535 --> 00:52:55.105
SCIENCE, THE SCIENCE GUIDES OUR

00:52:55.171 --> 00:52:55.872
INVESTIGATIONS. AND IT'S

00:52:55.939 --> 00:52:58.308
THROUGH THAT SCIENCE THAT I AM

00:52:58.375 --> 00:53:01.177
CONVINCED THAT WE ARE

00:53:01.244 --> 00:53:03.013
ELIMINATING MANY FIRES. WE

00:53:03.079 --> 00:53:04.714
CAN'T ELIMINATE ALL OF THEM.

00:53:04.781 --> 00:53:07.384
BUT THE RISK POTENTIAL OF FIRES

00:53:07.450 --> 00:53:09.486
IS BEING REDUCED BY THE

00:53:09.553 --> 00:53:11.688
SUBROGATION INVESTIGATIONS THAT

00:53:11.755 --> 00:53:13.790
ARE INVOLVED IN PAST AND

00:53:13.857 --> 00:53:17.394
CURRENT FIRES. AND AGAIN, HOW

00:53:17.460 --> 00:53:19.529
DOES THIS HELP? FROM A

00:53:19.596 --> 00:53:20.964
STANDPOINT, I'M GOING TO SAY

00:53:21.031 --> 00:53:23.166
FACTUALLY THE SURVIVORS HERE,

00:53:23.233 --> 00:53:24.267
BECAUSE AGAIN, THE BURDEN IS

00:53:24.334 --> 00:53:26.369
THEN CARRIED BY THE INSURANCE

00:53:26.436 --> 00:53:28.171
INDUSTRY AS OPPOSED TO THE

00:53:28.238 --> 00:53:30.373
INDIVIDUAL FROM THEIR FROM

00:53:30.440 --> 00:53:33.577
THEIR PERSONAL STANDPOINT, THE

00:53:33.643 --> 00:53:35.378
REAL PARTY IN INTEREST IN A

00:53:35.445 --> 00:53:37.480
SUBROGATION MATTER BECOMES THE

00:53:37.547 --> 00:53:39.015
INSURANCE COMPANY BECAUSE THEY

00:53:39.082 --> 00:53:41.117
HAVE MADE THE PAYMENT TO THEIR

00:53:41.184 --> 00:53:43.720
INSURED INSURANCE COMPANIES

00:53:43.787 --> 00:53:45.488
DON'T RECOVER 100 CENTS ON A

00:53:45.555 --> 00:53:47.924
DOLLAR. I'VE BEEN DOING THIS

00:53:47.991 --> 00:53:50.894
FOR 40 YEARS. I THINK ONE

00:53:50.961 --> 00:53:52.729
INSTANCE HAS EVER HAD A

00:53:52.796 --> 00:53:54.497
RECOVERY WHERE AN INSURANCE

00:53:54.564 --> 00:53:55.632
COMPANY RECEIVED DOLLAR FOR

00:53:55.699 --> 00:53:57.434
DOLLAR, THAT WHICH IT'S PAID TO

00:53:57.500 --> 00:53:59.569
ITS INSUREDS. SO THE INDUSTRY

00:53:59.636 --> 00:54:02.739
AS A WHOLE ALWAYS, ALWAYS AS A

00:54:02.806 --> 00:54:04.507
SHORTFALL FROM A STANDPOINT OF,

00:54:04.574 --> 00:54:07.110
OF RECOVERY. AND REALLY IS ONLY

00:54:07.177 --> 00:54:09.913
LOOKING TO DO TWO THINGS. ONE,

00:54:09.980 --> 00:54:11.414
YES, SEEK A RECOVERY FROM THE

00:54:11.481 --> 00:54:14.250
STANDPOINT OF A PARTICULAR FIRE.

00:54:14.317 --> 00:54:16.419
ABSOLUTELY. THAT'S WHAT THE LAW

00:54:16.486 --> 00:54:18.555
ENTITLES THEM TO, BUT

00:54:18.622 --> 00:54:21.458
SECONDARILY, TO PUT FORTH

00:54:21.524 --> 00:54:22.592
SCIENTIFIC STUDIES SO THAT

00:54:22.659 --> 00:54:25.095
PEOPLE CAN GATHER TOGETHER THAT

00:54:25.161 --> 00:54:27.263
INFORMATION FOR PURPOSES OF

00:54:27.330 --> 00:54:30.166
DEALING WITH TOMORROW'S RISK.

00:54:30.233 --> 00:54:32.569
TOMORROW'S CIRCUMSTANCE.

00:54:32.636 --> 00:54:34.037
SUBROGATION INDUSTRY IS ALSO

00:54:34.104 --> 00:54:35.872
INVOLVED IN OTHER ASPECTS OF

00:54:35.939 --> 00:54:38.008
THINGS WHERE JOINTLY HOLD

00:54:38.074 --> 00:54:40.577
CONFERENCES WITH UTILITIES TO

00:54:40.644 --> 00:54:43.046
TO GET TOGETHER FOR PURPOSES OF

00:54:43.113 --> 00:54:46.683
DISCUSSING THESE ISSUES. IF

00:54:46.750 --> 00:54:49.486
SUBROGATION IS NOT THERE, IF

00:54:49.552 --> 00:54:52.789
SUBROGATION IS REMOVED, YOU ARE

00:54:52.856 --> 00:54:54.624
REMOVING FROM THE STANDPOINT, I

00:54:54.691 --> 00:54:57.560
BELIEVE, OF THE DYNAMIC OF WHAT

00:54:57.627 --> 00:54:59.295
IS GOOD FOR THE CITIZENS OF THE

00:54:59.362 --> 00:55:01.431
STATE OF CALIFORNIA, A VERY

00:55:01.498 --> 00:55:03.967
CRUCIAL, VERY CRUCIAL COMPONENT

00:55:04.034 --> 00:55:06.436
OF HOW THE CITIZENS OF THE

00:55:06.503 --> 00:55:08.605
STATE OF CALIFORNIA CAN CAN BE

00:55:08.672 --> 00:55:10.073
PROTECTED FROM STANDPOINT OF

00:55:10.140 --> 00:55:13.376
PAST FIRES AND THE THREAT OF

00:55:13.443 --> 00:55:15.111
FUTURE FIRES. AND I'LL I'LL

00:55:15.178 --> 00:55:19.416
KEEP IT SHORT AND HAPPY TO

00:55:19.482 --> 00:55:20.817
ANSWER ANY QUESTIONS THAT

00:55:20.884 --> 00:55:22.285
ANYBODY MAY HAVE. THANK YOU,

00:55:22.352 --> 00:55:26.289
MR. GUTFELD. ANY QUESTIONS FROM

00:55:26.356 --> 00:55:28.758
COMMITTEE MEMBERS OR COMMENTS?

00:55:28.825 --> 00:55:32.929
MR. ROGERS? I REALLY APPRECIATE

00:55:32.996 --> 00:55:35.965
THE OVERVIEW. SO AS I

00:55:36.032 --> 00:55:38.535
UNDERSTAND IT, THE ARGUMENT OF

00:55:38.601 --> 00:55:40.303
WHY SUBROGATION MIGHT BE

00:55:40.370 --> 00:55:42.105
INCREASING OR NOT NECESSARILY

00:55:42.172 --> 00:55:44.207
INCREASING THE COST, BUT

00:55:44.274 --> 00:55:46.409
THERE'S A CHUNK THAT WILDFIRE

00:55:46.476 --> 00:55:49.312
VICTIMS MIGHT NOT GET BECAUSE

00:55:49.379 --> 00:55:51.281
THEY'RE HAVING THEIR INSURANCE

00:55:51.347 --> 00:55:52.649
GO OUT AND SEGREGATE THIS CLAIM

00:55:52.716 --> 00:55:56.920
TO TRY TO, TO GET IT. HAVE WE

00:55:56.986 --> 00:55:59.389
SEEN INSTANCES OR HAVE YOU SEEN

00:55:59.456 --> 00:56:01.558
INSTANCES WHERE WILDFIRE

00:56:01.624 --> 00:56:02.992
VICTIMS TRIED TO SORT OF

00:56:03.059 --> 00:56:04.728
ESSENTIALLY GO IT ALONE IN

00:56:04.794 --> 00:56:08.364
THEIR LAWSUITS VERSUS HAVING

00:56:08.431 --> 00:56:10.867
THEIR ATTORNEYS OR INSURANCE

00:56:10.934 --> 00:56:12.669
COMPANIES TRY TO FIGHT IT? AND

00:56:12.736 --> 00:56:14.170
DO WE SEE A DIFFERENCE IN WHAT

00:56:14.237 --> 00:56:17.006
THE ACTUAL SETTLEMENT AMOUNT IS?

00:56:17.073 --> 00:56:19.642
OKAY, THERE ARE A FEW QUESTIONS

00:56:19.709 --> 00:56:22.879
WRAPPED UP IN THERE. SO LET'S

00:56:22.946 --> 00:56:24.848
LET'S START AT THE BEGINNING. I

00:56:24.914 --> 00:56:27.417
DON'T BELIEVE AN INSURANCE

00:56:27.484 --> 00:56:28.885
COMPANY TAKES AWAY A SINGLE

00:56:28.952 --> 00:56:30.687
DOLLAR FROM AN INSURED IN A

00:56:30.754 --> 00:56:33.223
RECOVERY, BECAUSE WHAT THE

00:56:33.289 --> 00:56:34.257
INSURANCE COMPANY HAS ALREADY

00:56:34.324 --> 00:56:35.759
DONE IS PAID THAT INSURED, AND

00:56:35.825 --> 00:56:38.261
IT'S PAID THAT INSURED MORE

00:56:38.328 --> 00:56:39.763
THAN WHAT THE INSURANCE COMPANY

00:56:39.829 --> 00:56:42.198
IS RECOVERING. SO I BELIEVE TO

00:56:42.265 --> 00:56:44.634
SOME EXTENT, IF I UNDERSTOOD

00:56:44.701 --> 00:56:46.903
YOUR QUESTION CORRECTLY, THE

00:56:46.970 --> 00:56:48.404
THE INSURANCE COMPANIES ARE NOT

00:56:48.471 --> 00:56:50.140
TAKING AWAY MONEY FROM THEIR

00:56:50.206 --> 00:56:52.342
INSUREDS IN ORDER TO RECOVER.

00:56:52.408 --> 00:56:54.477
PEOPLE THAT MAY MAY POTENTIALLY

00:56:54.544 --> 00:56:56.246
BE AFFECTED. IF THERE IS A,

00:56:56.312 --> 00:56:58.148
LET'S CALL IT A LIMITED POT, IF

00:56:58.214 --> 00:57:00.583
YOU WILL, FOR RECOVERY PURPOSES,

00:57:00.650 --> 00:57:02.385
MIGHT BE SOMEBODY WHO IS NOT

00:57:02.452 --> 00:57:04.487
INSURED, MIGHT BE SOMEBODY WHO

00:57:04.554 --> 00:57:07.423
HAS GONE WITHOUT INSURANCE. AND,

00:57:07.490 --> 00:57:09.926
YOU KNOW, PEOPLE MAKE CHOICES.

00:57:09.993 --> 00:57:12.862
AND BUT FROM THAT STANDPOINT,

00:57:12.929 --> 00:57:16.099
I'VE YET TO RUN INTO A CASE

00:57:16.166 --> 00:57:18.334
WHERE INDIVIDUALS. AND I'VE

00:57:18.401 --> 00:57:19.469
BEEN DOING THIS A LONG TIME

00:57:19.536 --> 00:57:21.104
WHERE INDIVIDUALS AND I'VE

00:57:21.171 --> 00:57:22.205
REPRESENTED INDIVIDUALS AND I

00:57:22.272 --> 00:57:24.007
CONTINUE TO REPRESENT

00:57:24.073 --> 00:57:25.775
INDIVIDUALS ARE PREVENTED FROM

00:57:25.842 --> 00:57:27.277
RECOVERING BECAUSE AN INSURANCE

00:57:27.343 --> 00:57:28.978
COMPANY HAS TAKEN MONEY AWAY

00:57:29.045 --> 00:57:32.649
FROM THEM. AND FROM A

00:57:32.715 --> 00:57:36.219
STANDPOINT OF INDIVIDUALS GOING,

00:57:36.286 --> 00:57:39.856
GOING IT ALONE, I AGAIN, I

00:57:39.923 --> 00:57:41.357
CAN'T THINK OF A SINGLE

00:57:41.424 --> 00:57:42.659
INSTANCE OF A MAJOR

00:57:42.725 --> 00:57:44.460
CATASTROPHIC EVENT WHERE

00:57:44.527 --> 00:57:46.362
INDIVIDUALS HAVE DECIDED ON

00:57:46.429 --> 00:57:48.131
THEIR OWN TO COLLECTIVELY

00:57:48.198 --> 00:57:50.300
PURSUE RECOVERY WITHOUT BENEFIT

00:57:50.366 --> 00:57:52.435
OF WHAT THE INSURANCE INDUSTRY

00:57:52.502 --> 00:57:53.903
PROVIDES THROUGH ITS

00:57:53.970 --> 00:57:56.406
INVESTIGATION. AND FROM A

00:57:56.472 --> 00:57:58.541
STANDPOINT OF STANDING TOGETHER,

00:57:58.608 --> 00:58:00.410
QUITE FRANKLY, ARM IN ARM IN

00:58:00.476 --> 00:58:01.811
PURSUING RECOVERY AGAINST WHOSE

00:58:01.878 --> 00:58:04.347
CAUSED A LOSS. THERE HAVE BEEN

00:58:04.414 --> 00:58:05.815
INSTANCES I'M AWARE OF WHERE

00:58:05.882 --> 00:58:07.483
THE INSURANCE INDUSTRY HAS

00:58:07.550 --> 00:58:09.652
DECIDED TO FOREGO PURSUING

00:58:09.719 --> 00:58:13.389
RECOVERY FOR SUBROGATION, WHERE

00:58:13.456 --> 00:58:14.724
INDIVIDUALS HAVE FOR THEIR OWN

00:58:14.791 --> 00:58:16.259
REASONS OR PERHAPS REASONS OF

00:58:16.326 --> 00:58:18.328
THEIR COUNSEL, TO GO FORWARD

00:58:18.394 --> 00:58:20.563
WITH A RECOVERY EFFORT. BUT

00:58:20.630 --> 00:58:23.766
THAT ISN'T SOMETHING THAT

00:58:23.833 --> 00:58:25.635
HAPPENS HARDLY AT ALL. AND

00:58:25.702 --> 00:58:27.036
THAT'S GENERALLY A DECISION

00:58:27.103 --> 00:58:29.138
THAT'S MADE BY BY, YOU KNOW,

00:58:29.205 --> 00:58:30.340
CLIENTS AS TO WHETHER THEY WANT

00:58:30.406 --> 00:58:31.374
TO PROCEED FORWARD WITH

00:58:31.441 --> 00:58:34.277
LITIGATION OR NOT. I APPRECIATE

00:58:34.344 --> 00:58:35.445
THAT. ONE OF THE THINGS THAT

00:58:35.511 --> 00:58:36.512
I'M CONSTANTLY THINKING ABOUT

00:58:36.579 --> 00:58:38.882
WAS OUR OWN EXPERIENCE WITH

00:58:38.948 --> 00:58:41.384
WILDFIRES AND THE FEELING OF

00:58:41.451 --> 00:58:43.553
INEQUITY AND POWER IN THE WAY

00:58:43.620 --> 00:58:46.089
THAT THE SYSTEM WAS PRESENTED.

00:58:46.155 --> 00:58:48.524
DO YOU KNOW, AND I KNOW THERE'S

00:58:48.591 --> 00:58:49.392
PROBABLY REPRESENTATIVES HERE

00:58:49.459 --> 00:58:51.828
ALSO FROM SOME OF THE UTILITIES.

00:58:51.895 --> 00:58:54.530
HOW QUICKLY DO THE UTILITIES

00:58:54.597 --> 00:58:55.531
HAVE A PRETTY GOOD IDEA OF

00:58:55.598 --> 00:58:57.433
WHETHER OR NOT IT WAS THEIR

00:58:57.500 --> 00:59:00.837
EQUIPMENT THAT STARTED A FIRE?

00:59:00.904 --> 00:59:02.338
YOU MIGHT WANT TO ASK THAT

00:59:02.405 --> 00:59:04.073
QUESTION TO THE UTILITY

00:59:04.140 --> 00:59:08.344
REPRESENTATIVES, BUT. THROUGH

00:59:08.411 --> 00:59:10.213
THIS THROUGH INVESTIGATIVE

00:59:10.280 --> 00:59:14.217
PROCESS BEFORE BEFORE A

00:59:14.284 --> 00:59:16.319
SUBROGATION COMPLAINT IS FILED,

00:59:16.386 --> 00:59:18.087
BEFORE A SUBJECT, BEFORE A

00:59:18.154 --> 00:59:19.923
SEGREGATING INSURER PROCEEDS

00:59:19.989 --> 00:59:22.058
FORWARD WITH FILING A LAWSUIT,

00:59:22.125 --> 00:59:23.526
IT'S BEEN DETERMINED HOW THAT

00:59:23.593 --> 00:59:25.728
FIRE OCCURRED, AND THAT

00:59:25.795 --> 00:59:27.497
INFORMATION HAS BEEN SHARED

00:59:27.563 --> 00:59:29.966
WITH THE UTILITY. AND BECAUSE

00:59:30.033 --> 00:59:32.502
IT'S BEEN DONE THROUGH A JOINT

00:59:32.568 --> 00:59:34.270
INVESTIGATION, THE EVIDENCE IS

00:59:34.337 --> 00:59:37.206
COLLECTED JOINTLY. IT'S VIEWED

00:59:37.273 --> 00:59:40.076
JOINTLY. EXPERTS FROM ALL SIDES

00:59:40.143 --> 00:59:43.379
ARE WITNESSING IT JOINTLY. SO

00:59:43.446 --> 00:59:46.516
THERE IS NO HIDING OF THE P

00:59:46.582 --> 00:59:49.752
THAT TAKES PLACE. SO THE THE

00:59:49.819 --> 00:59:52.689
UTILITY HAS AN ABSOLUTE ABILITY

00:59:52.755 --> 00:59:55.591
TO UNDERSTAND COMPREHEND WHAT

00:59:55.658 --> 00:59:57.126
AN INSURANCE CARRIER IS SEEKING

00:59:57.193 --> 00:59:58.828
TO RECOVER IN A SUBROGATION

00:59:58.895 --> 01:00:01.664
CASE AT. GENERALLY SPEAKING,

01:00:01.731 --> 01:00:03.499
IT'S BEFORE THE SUIT IS FILED,

01:00:03.566 --> 01:00:05.301
FILING THE SUIT IS MERELY A

01:00:05.368 --> 01:00:07.070
FORMALITY, BUT IT IS NOT A

01:00:07.136 --> 01:00:08.871
SCENARIO WHERE A LAWSUIT IS

01:00:08.938 --> 01:00:09.939
FILED AND THEN SOMEWHERE DOWN

01:00:10.006 --> 01:00:11.007
THE ROAD, SOMEBODY TRIES TO

01:00:11.074 --> 01:00:12.075
FIGURE OUT WHAT THE HECK

01:00:12.141 --> 01:00:14.277
HAPPENED, AND THEN ANYTHING OF

01:00:14.344 --> 01:00:16.779
THAT NATURE THAT THAT IS NOT

01:00:16.846 --> 01:00:18.314
GOOD INVESTIGATION. THAT WOULD

01:00:18.381 --> 01:00:21.117
NOT BE GOOD SCIENCE. THAT WOULD

01:00:21.184 --> 01:00:23.653
THAT WOULD JUST BE POOR

01:00:23.720 --> 01:00:25.088
LAWYERING, QUITE FRANKLY. YEAH.

01:00:25.154 --> 01:00:26.556
I GUESS WHERE MY WHERE MY

01:00:26.622 --> 01:00:28.024
QUESTION IS KIND OF COMING FROM

01:00:28.091 --> 01:00:30.426
IS IF AND I MENTIONED THE

01:00:30.493 --> 01:00:32.628
INEQUITY IN POWER, IF THE

01:00:32.695 --> 01:00:34.931
UTILITIES KNOW FAIRLY QUICKLY

01:00:34.998 --> 01:00:36.632
WHETHER OR NOT THEY WERE LIKELY

01:00:36.699 --> 01:00:37.967
AT FAULT, THAT THEIR EQUIPMENT

01:00:38.034 --> 01:00:40.870
WAS LIKELY AT FAULT. BUT A

01:00:40.937 --> 01:00:44.140
WILDFIRE VICTIM HAS TO WAIT

01:00:44.207 --> 01:00:46.676
MONTHS FOR THE INVESTIGATION TO

01:00:46.743 --> 01:00:49.278
COME OUT TO SHOW WHETHER IT WAS

01:00:49.345 --> 01:00:50.947
OR WAS NOT. CAL FIRE

01:00:51.014 --> 01:00:52.148
INVESTIGATION, INVESTIGATION OR

01:00:52.215 --> 01:00:55.018
WHATEVER. HAVE YOU, THE ROLE OF

01:00:55.084 --> 01:00:57.820
THE INSURANCE PROVIDER OR THE

01:00:57.887 --> 01:01:00.690
ROLE OF THE ATTORNEY ADVOCATES

01:01:00.757 --> 01:01:03.192
IS, TO ONE, HELP THEM TO MAKE

01:01:03.259 --> 01:01:06.496
SURE THAT THE CORRECT

01:01:06.562 --> 01:01:08.664
INFORMATION IS AVAILABLE, BUT

01:01:08.731 --> 01:01:10.400
ALSO THEY CAN'T MOVE ON WITH

01:01:10.466 --> 01:01:12.902
THEIR LIVES UNLESS THEY HAVE

01:01:12.969 --> 01:01:14.737
SOMEBODY WHO IS HELPING THEM TO

01:01:14.804 --> 01:01:16.572
FLOAT THROUGH THOSE MONTHS LONG

01:01:16.639 --> 01:01:19.142
FOR THE INVESTIGATION. RIGHT.

01:01:19.208 --> 01:01:22.345
WELL, LET'S TAKE THAT IN IN TWO

01:01:22.412 --> 01:01:24.447
STEPS, IF WE COULD. ONE,

01:01:24.514 --> 01:01:25.982
SOMEBODY WHO'S INSURED, THEY'RE

01:01:26.049 --> 01:01:28.051
BEING PAID OUT ON THEIR CLAIM

01:01:28.117 --> 01:01:29.552
WHILE THE INVESTIGATION IS

01:01:29.619 --> 01:01:30.253
TAKING PLACE. THESE ARE

01:01:30.319 --> 01:01:31.354
PARALLEL TRACKS. THERE'S

01:01:31.421 --> 01:01:33.122
THERE'S NOT ONE BEGINS AND ENDS

01:01:33.189 --> 01:01:34.357
AND ONE BEGINS AND ENDS.

01:01:34.424 --> 01:01:35.258
THEY'RE PARALLEL TRACKS.

01:01:35.324 --> 01:01:37.827
THERE'S A CLAIMANT ADJUDICATION

01:01:37.894 --> 01:01:39.562
PROCESS THAT TAKES PLACE AND

01:01:39.629 --> 01:01:40.663
INDIVIDUALS ARE PAID OUT OVER

01:01:40.730 --> 01:01:43.966
THE COURSE OF, OF THAT PROCESS,

01:01:44.033 --> 01:01:45.001
IRRESPECTIVE OF WHAT'S GOING ON

01:01:45.068 --> 01:01:47.937
IN AN INVESTIGATION. FROM THE

01:01:48.004 --> 01:01:50.073
INVESTIGATION STANDPOINT,

01:01:50.139 --> 01:01:51.674
SOMETIMES, I MEAN, SOMETIMES

01:01:51.741 --> 01:01:53.443
IT'S RATHER QUICK WHERE WE'RE

01:01:53.509 --> 01:01:56.512
ABLE TO DETERMINE HOW A FIRE

01:01:56.579 --> 01:01:57.647
STARTED, WHERE IT WAS, HOW IT

01:01:57.713 --> 01:01:59.115
WAS CAUSED. SOMETIMES IT TAKES

01:01:59.182 --> 01:02:01.250
A LITTLE LONGER, SOMETIMES IT

01:02:01.317 --> 01:02:02.318
TAKES A LITTLE LONGER JUST TO

01:02:02.385 --> 01:02:05.521
GET THE RIGHT SCIENTIFIC MINDS

01:02:05.588 --> 01:02:06.589
TOGETHER. FOR PURPOSES OF

01:02:06.656 --> 01:02:10.493
LOOKING AT IT, I GENERALLY WE

01:02:10.560 --> 01:02:13.062
DON'T RELY ON PUBLIC ENTITY

01:02:13.129 --> 01:02:16.365
REPORTS BECAUSE THEY TAKE A

01:02:16.432 --> 01:02:20.303
LONG TIME TO COME OUT. AND I

01:02:20.369 --> 01:02:21.637
THINK WE'VE JUST SEEN IN THE

01:02:21.704 --> 01:02:23.840
EATON MATTER THAT THE THE

01:02:23.906 --> 01:02:27.110
REPORT CAME OUT QUITE AFTER.

01:02:27.176 --> 01:02:28.578
RIGHT. EVERYBODY WAS WAS

01:02:28.644 --> 01:02:30.012
PROCEEDING FORWARD WITH

01:02:30.079 --> 01:02:32.882
LITIGATION. SO FROM FROM THAT

01:02:32.949 --> 01:02:35.718
STANDPOINT, THE INDIVIDUAL

01:02:35.785 --> 01:02:38.254
INSURED IS BEING PAID OUT ON

01:02:38.321 --> 01:02:40.456
THEIR CLAIM FROM THEIR CARRIER.

01:02:40.523 --> 01:02:42.992
THEY MAY HAVE AN UNINSURED OR

01:02:43.059 --> 01:02:44.760
UNDERINSURED LOSS. THEY MIGHT

01:02:44.827 --> 01:02:46.896
FROM THAT STANDPOINT, THEY

01:02:46.963 --> 01:02:48.364
WOULD NEED TO PURSUE THAT

01:02:48.431 --> 01:02:49.432
RECOVERY ON THEIR OWN THROUGH

01:02:49.499 --> 01:02:51.968
THEIR OWN COUNSEL. NOW, IF

01:02:52.034 --> 01:02:53.736
YOU'RE TALKING ABOUT AN

01:02:53.803 --> 01:02:55.505
INDIVIDUAL WHO HAS CHOSEN TO

01:02:55.571 --> 01:02:58.407
NOT OBTAIN INSURANCE, THAT

01:02:58.474 --> 01:03:00.610
INDIVIDUAL IS ULTIMATELY GOING

01:03:00.676 --> 01:03:03.146
TO BENEFIT FROM THE

01:03:03.212 --> 01:03:05.281
INVESTIGATION THAT'S BEING DONE.

01:03:05.348 --> 01:03:09.352
BECAUSE IN THAT CONTEXT, THEY

01:03:09.418 --> 01:03:11.020
ARE GOING TO RECEIVE THE FRUITS

01:03:11.087 --> 01:03:13.256
OF THE LABOR OF THE

01:03:13.322 --> 01:03:14.624
INVESTIGATION CONDUCTED BY THE

01:03:14.690 --> 01:03:17.193
INSURANCE INDUSTRY, ULTIMATELY,

01:03:17.260 --> 01:03:19.295
TO BE ABLE TO RECOVER ON THEIR

01:03:19.362 --> 01:03:20.863
INDIVIDUAL CLAIM. AND IF THAT

01:03:20.930 --> 01:03:23.266
WAS ELIMINATED, THE INSURANCE

01:03:23.332 --> 01:03:26.869
INVESTIGATION WAS ELIMINATED.

01:03:26.936 --> 01:03:29.739
THEY WOULDN'T HAVE A PILLAR ON

01:03:29.805 --> 01:03:33.009
THAT TO LEAN ON. THEY WOULD

01:03:33.075 --> 01:03:35.478
SIMPLY BE AT THE MERCY OF OF A

01:03:35.545 --> 01:03:38.814
UTILITY COMPANY TO, TO PAY ON A

01:03:38.881 --> 01:03:43.486
CLAIM. AND I WOULD HUMBLY

01:03:43.553 --> 01:03:46.322
SUGGEST THAT THAT IS NOT

01:03:46.389 --> 01:03:48.791
REALITY. SO IN YOUR JUST TO BE

01:03:48.858 --> 01:03:51.294
VERY CLEAR, IN YOUR OPINION,

01:03:51.360 --> 01:03:53.863
SUBROGATION MAKES WILDFIRE

01:03:53.930 --> 01:03:57.066
VICTIMS MORE LIKELY TO RECEIVE

01:03:57.133 --> 01:04:00.002
RESTITUTION IN A TIMELY MANNER

01:04:00.069 --> 01:04:02.104
THAN IF THEY DID NOT HAVE THAT

01:04:02.171 --> 01:04:06.842
OPTION. 100%. OKAY. THANK YOU.

01:04:06.909 --> 01:04:08.244
CAN I JUST ASK A COUPLE OF

01:04:08.311 --> 01:04:09.879
QUESTIONS ABOUT KIND OF THE

01:04:09.946 --> 01:04:11.147
BASICS OF THE PROCESS AND

01:04:11.214 --> 01:04:14.050
TIMELINE? SO, OKAY, THERE'S A

01:04:14.116 --> 01:04:17.587
WILDFIRE. THE WHETHER IT'S

01:04:17.653 --> 01:04:19.088
UTILITY CAUSED OR NOT DOESN'T

01:04:19.155 --> 01:04:21.290
REALLY MATTER. THE INSURER THEN

01:04:21.357 --> 01:04:23.693
PAYS THE HOMEOWNER THEIR CLAIM.

01:04:23.759 --> 01:04:24.794
HOW LONG DOES THAT TYPICALLY

01:04:24.860 --> 01:04:28.898
TAKE? HOW LONG DOES PAYMENT OF

01:04:28.965 --> 01:04:30.900
A CLAIM TAKE? IS THAT WHAT

01:04:30.967 --> 01:04:32.068
YOU'RE ASKING ME IF MY HOUSE,

01:04:32.134 --> 01:04:33.869
IF I'M A WILDFIRE VICTIM, MY

01:04:33.936 --> 01:04:36.072
HOUSE BURNS DOWN. HOW LONG DOES

01:04:36.138 --> 01:04:38.507
IT TAKE ME TO GET MY INSURANCE

01:04:38.574 --> 01:04:42.078
COMPANY TO GIVE ME MONEY? A

01:04:42.144 --> 01:04:44.313
LITTLE BIT OUTSIDE MY

01:04:44.380 --> 01:04:45.681
WHEELHOUSE. BUT FROM MY

01:04:45.748 --> 01:04:47.116
EXPERIENCE IN HANDLING THESE

01:04:47.183 --> 01:04:50.019
CASES, GENERALLY SPEAKING, THE

01:04:50.086 --> 01:04:53.256
CLAIMS ADJUDICATION PROCESS IS

01:04:53.322 --> 01:04:55.391
IS IN SEVERAL STEPS. THE FIRST

01:04:55.458 --> 01:04:57.193
THE FIRST STEP IS THERE'S AN

01:04:57.260 --> 01:04:58.527
INITIAL PAYOUT THAT'S GENERALLY

01:04:58.594 --> 01:05:01.197
MADE BY AN INSURANCE CARRIER.

01:05:01.264 --> 01:05:03.366
AND THEN GENERALLY SPEAKING,

01:05:03.432 --> 01:05:04.834
YOU'RE LOOKING AT IT FROM A

01:05:04.900 --> 01:05:06.269
PROPERTY LAW STANDPOINT. AND

01:05:06.335 --> 01:05:07.970
THEN YOU HAVE TO LOOK AT IT AS

01:05:08.037 --> 01:05:09.138
SOMEBODY'S GOING TO REBUILD, OR

01:05:09.205 --> 01:05:11.007
ARE THEY JUST GOING TO RECEIVE

01:05:11.073 --> 01:05:12.208
MONEY AND NOT REBUILD? SO THOSE

01:05:12.275 --> 01:05:13.876
ARE QUESTIONS THAT HAPPEN AS

01:05:13.943 --> 01:05:15.611
WELL. THOSE HAVE TO BE

01:05:15.678 --> 01:05:17.346
ADDRESSED BY THE INSURED

01:05:17.413 --> 01:05:18.914
INSUREDS CHOICES. AND THEN YOU

01:05:18.981 --> 01:05:20.716
HAVE CONTENTS ISSUES THAT THAT

01:05:20.783 --> 01:05:22.652
HAVE TO BE DEALT WITH. AND THAT

01:05:22.718 --> 01:05:23.819
HAS AND THAT'S DEALT WITH ON A

01:05:23.886 --> 01:05:26.389
BASIS OF THE INDIVIDUAL

01:05:26.455 --> 01:05:29.659
PRESENTING WELL A LIST OF THEIR

01:05:29.725 --> 01:05:30.993
CONTENTS. AND THEN THAT HAS TO

01:05:31.060 --> 01:05:33.562
BE VALUED AND WHAT HAVE YOU IN

01:05:33.629 --> 01:05:34.630
CATASTROPHIC LOSS SCENARIOS

01:05:34.697 --> 01:05:37.199
WHERE YOU HAVE THOUSANDS OF

01:05:37.266 --> 01:05:38.634
LOSSES, THOUSANDS OF CLAIMS AT

01:05:38.701 --> 01:05:41.871
THE SAME TIME. GENERALLY

01:05:41.937 --> 01:05:43.673
SPEAKING, IT'S BEEN MY

01:05:43.739 --> 01:05:45.808
EXPERIENCE THAT THOSE PAYMENTS

01:05:45.875 --> 01:05:47.643
FOR THE VAST MAJORITY OF THE

01:05:47.710 --> 01:05:48.744
PAYMENTS, YES, THERE'S ALWAYS

01:05:48.811 --> 01:05:49.779
SOMETHING THAT MAYBE HAPPENS A

01:05:49.845 --> 01:05:51.614
LITTLE BIT LATER, BUT THEY'RE

01:05:51.681 --> 01:05:53.783
GENERALLY PAID OUT WITHIN A

01:05:53.849 --> 01:05:56.252
YEAR, YEAR AND A HALF IN THEIR

01:05:56.319 --> 01:05:57.653
ENTIRETY BECAUSE WE'RE GOING

01:05:57.720 --> 01:05:59.855
FORWARD WITH THE LITIGATION.

01:05:59.922 --> 01:06:02.091
AND AGAIN, STEPPING IN THE

01:06:02.158 --> 01:06:04.260
SHOES OF THE INSURED, YOU CAN

01:06:04.327 --> 01:06:05.628
ONLY, FROM A SUBROGATION

01:06:05.695 --> 01:06:07.029
INSURER STANDPOINT, STEP IN THE

01:06:07.096 --> 01:06:08.864
SHOES TO THE AMOUNT YOU'VE PAID

01:06:08.931 --> 01:06:11.667
YOUR INSURED, RIGHT? SO THOSE

01:06:11.734 --> 01:06:12.835
AMOUNTS HAVE TO BE DETERMINED

01:06:12.902 --> 01:06:15.771
IN ORDER FOR THE LITIGATION TO

01:06:15.838 --> 01:06:18.741
ULTIMATELY GET RESOLVED. SO

01:06:18.808 --> 01:06:20.843
GENERALLY SPEAKING, IN A LARGE

01:06:20.910 --> 01:06:22.278
CATASTROPHIC LOSS SCENARIO,

01:06:22.345 --> 01:06:24.847
THAT'S BEEN MY EXPERIENCE YEAR,

01:06:24.914 --> 01:06:26.582
YEAR AND A HALF, MAYBE TWO

01:06:26.649 --> 01:06:28.651
YEARS. YOU KNOW, WE'RE COMING

01:06:28.718 --> 01:06:32.355
UP ON, YOU KNOW, THEY'RE EATING

01:06:32.421 --> 01:06:35.591
IS AND FIRES LIKE THAT. NAPA,

01:06:35.658 --> 01:06:37.093
THE FIRES THAT HAPPENED THERE

01:06:37.159 --> 01:06:39.829
ARE EXTRAORDINARY CIRCUMSTANCES

01:06:39.895 --> 01:06:41.397
WHERE YOU'RE TALKING ABOUT SO

01:06:41.464 --> 01:06:42.765
MANY PEOPLE, AND THEN YOU HAVE

01:06:42.832 --> 01:06:45.334
PEOPLE THAT MOVE AND THEY'VE

01:06:45.401 --> 01:06:47.136
RELOCATED AND FINDING THEM AND

01:06:47.203 --> 01:06:47.970
COMMUNICATING WITH THEM AND

01:06:48.037 --> 01:06:50.706
GETTING ALL OF THAT ADJUSTED.

01:06:50.773 --> 01:06:52.608
IT TAKES TIME. THERE IS NO

01:06:52.675 --> 01:06:55.077
QUICK FIX TO IT, UNFORTUNATELY.

01:06:55.144 --> 01:06:56.946
OKAY. BUT WE HAVE SORT OF THESE

01:06:57.012 --> 01:06:58.614
TWO PROCESSES THAT ARE

01:06:58.681 --> 01:07:00.082
UNFOLDING IN PARALLEL. YOU HAVE

01:07:00.149 --> 01:07:03.352
A PROCESS BETWEEN THE INSURER

01:07:03.419 --> 01:07:05.154
AND THE INSURED, AND THEN YOU

01:07:05.221 --> 01:07:06.889
HAVE A PROCESS BETWEEN THE

01:07:06.956 --> 01:07:11.227
INSURER AND THE UTILITY. SO WE

01:07:11.293 --> 01:07:12.428
TALKED A LITTLE BIT ABOUT THE

01:07:12.495 --> 01:07:14.497
FIRST PIECE OF THAT. SO WALK ME

01:07:14.563 --> 01:07:17.767
THROUGH THE STEPS BETWEEN

01:07:17.833 --> 01:07:19.135
INSURER TO UTILITY. AM I

01:07:19.201 --> 01:07:21.270
CORRECT IN UNDERSTANDING. IT'S

01:07:21.337 --> 01:07:23.139
SO YOU KNOW, AGAIN, SUPER HIGH

01:07:23.205 --> 01:07:24.573
LEVEL. FIRST STEP IS

01:07:24.640 --> 01:07:25.674
DETERMINING WHETHER OR NOT IT'S

01:07:25.741 --> 01:07:28.577
UTILITY CAUSED FIRE. THEN A

01:07:28.644 --> 01:07:30.980
LAWSUIT GETS FILED. THEN

01:07:31.046 --> 01:07:33.215
THERE'S LITIGATION AND FOLLOWED

01:07:33.282 --> 01:07:35.751
BY RESOLUTION. IS THAT BIG

01:07:35.818 --> 01:07:37.887
PICTURE AGAIN JUST THAT'S WHAT

01:07:37.953 --> 01:07:40.055
HAPPENS. THAT'S 30,000FT. OKAY.

01:07:40.122 --> 01:07:42.958
SO AND HOW LONG TYPICALLY DOES

01:07:43.025 --> 01:07:45.060
IT TAKE TO DETERMINE IT WAS A

01:07:45.127 --> 01:07:50.166
UTILITY CAUSED WILDFIRE? IT I

01:07:50.232 --> 01:07:51.934
HATE TO BE A LAWYER, BUT IT

01:07:52.001 --> 01:07:53.536
DEPENDS. YOU KNOW, IT REALLY

01:07:53.602 --> 01:07:55.838
DOES. IT DEPENDS ON ON SEVERAL

01:07:55.905 --> 01:08:00.576
FACTORS. IT DEPENDS ON THE

01:08:00.643 --> 01:08:02.778
TEMPERATURE OF A UTILITY TO SIT

01:08:02.845 --> 01:08:05.581
DOWN AND NEGOTIATE EARLY ON. I

01:08:05.648 --> 01:08:07.817
CAN, WITHOUT GETTING INTO

01:08:07.883 --> 01:08:09.218
SPECIFICS, I CAN GUARANTEE YOU

01:08:09.285 --> 01:08:11.353
CASES CAN RESOLVE AT LESSER

01:08:11.420 --> 01:08:12.621
PERCENTAGES. IF UTILITIES WOULD

01:08:12.688 --> 01:08:14.523
COME TO THE TABLE SOONER. THEY

01:08:14.590 --> 01:08:17.860
DON'T ALWAYS. I CAN GIVE YOU AN

01:08:17.927 --> 01:08:19.595
EXAMPLE OF WHERE IT DID OCCUR

01:08:19.662 --> 01:08:21.464
SOONER, AND THAT WAS IN SAN

01:08:21.530 --> 01:08:23.666
DIEGO IN 2007 WITH S, D, G AND

01:08:23.732 --> 01:08:27.236
 18 MONTHS AFTER THREE THE

01:08:27.303 --> 01:08:29.038
WHICH THE WICHITA AND RICE

01:08:29.104 --> 01:08:31.140
FIRES OCCURRED. WE HAD.

01:08:31.207 --> 01:08:33.008
RESOLUTION OF THE SUBROGATION

01:08:33.075 --> 01:08:36.545
CASES, WELL OVER $1 BILLION OF

01:08:36.612 --> 01:08:39.482
CLAIMS. AND THAT'S BECAUSE

01:08:39.548 --> 01:08:42.351
LAWYERS WORK TOGETHER. UTILITY

01:08:42.418 --> 01:08:44.487
WORKED WITH INSURERS AND PEOPLE

01:08:44.553 --> 01:08:46.956
CAME TO RESOLUTION. AND THAT'S

01:08:47.022 --> 01:08:49.091
THAT WAS PRETTY MAJOR IN TERMS

01:08:49.158 --> 01:08:51.660
OF COMING TO RESOLUTION FROM

01:08:51.727 --> 01:08:54.563
WHEN FIRE OCCURRED. THAT

01:08:54.630 --> 01:08:55.998
DOESN'T ALWAYS HAPPEN,

01:08:56.065 --> 01:08:56.832
UNFORTUNATELY. BUT I CAN

01:08:56.899 --> 01:08:58.767
GUARANTEE YOU AS A LAWYER

01:08:58.834 --> 01:09:00.603
REPRESENTING PLAINTIFFS IN

01:09:00.669 --> 01:09:02.004
THESE CASES, WE ARE VERY

01:09:02.071 --> 01:09:03.472
WILLING TO SIT DOWN EARLIER

01:09:03.539 --> 01:09:04.907
THAN LATER IN TERMS OF TRYING

01:09:04.974 --> 01:09:06.642
TO RESOLVE MATTERS FOR OUR

01:09:06.709 --> 01:09:10.346
CLIENTS. AND I GUESS WHAT WHAT

01:09:10.412 --> 01:09:13.215
I ALSO AM TRYING TO UNDERSTAND

01:09:13.282 --> 01:09:14.683
IS, OH, SORRY, I'M GOING TO ASK

01:09:14.750 --> 01:09:16.285
A FOLLOW UP QUESTION. LET ME

01:09:16.352 --> 01:09:17.453
FIRST JUST OUTLINE OUR TIMELINE.

01:09:17.520 --> 01:09:21.090
SO THEN HOW SOON AFTER A FIRE

01:09:21.156 --> 01:09:22.491
TAKES PLACE? TYPICALLY, WOULD

01:09:22.558 --> 01:09:25.728
AN INSURER INITIATE A LAWSUIT?

01:09:25.794 --> 01:09:28.330
AGAIN, THAT'S FACT SPECIFIC

01:09:28.397 --> 01:09:29.365
DEPENDING UPON THE

01:09:29.431 --> 01:09:30.399
INVESTIGATION PROCESS,

01:09:30.466 --> 01:09:32.635
DEPENDING UPON THE NEEDS OF THE

01:09:32.701 --> 01:09:34.036
INVESTIGATION, TO MAKE A

01:09:34.103 --> 01:09:35.437
SCIENTIFIC DETERMINATION AS TO

01:09:35.504 --> 01:09:38.707
THE ROOT CAUSE. IT'S A LOT

01:09:38.774 --> 01:09:40.209
EASIER IF THERE'S A TREE THAT

01:09:40.276 --> 01:09:41.977
FELL INTO A LINE, AND EVERYBODY

01:09:42.044 --> 01:09:43.145
CAN TAKE A PICTURE OF THE TREE

01:09:43.212 --> 01:09:45.147
THAT FELL INTO THE LINE, AND

01:09:45.214 --> 01:09:48.884
THAT YOU HAVE MOLTEN ALUMINUM

01:09:48.951 --> 01:09:50.653
METAL FROM FROM THE ENERGIZED

01:09:50.719 --> 01:09:52.421
CONDUCTORS DROPPING TO THE DRY

01:09:52.488 --> 01:09:54.557
VEGETATION BELOW, AS OPPOSED TO

01:09:54.623 --> 01:09:57.159
A SCENARIO THAT MAY BE MORE

01:09:57.226 --> 01:09:58.527
COMPLICATED, WHERE YOU HAVE TO

01:09:58.594 --> 01:09:59.995
DEVELOP DIFFERENT THINGS. YOU

01:10:00.062 --> 01:10:01.397
MAY HAVE TO HAVE METALLURGY

01:10:01.463 --> 01:10:02.498
INVOLVED. YOU MAY HAVE TO HAVE

01:10:02.565 --> 01:10:04.233
LAB ANALYSIS INVOLVED AND WHAT

01:10:04.300 --> 01:10:07.503
HAVE YOU. SO I COULD GIVE YOU A

01:10:07.570 --> 01:10:10.739
WINDOW, IF YOU WILL. GENERALLY

01:10:10.806 --> 01:10:12.508
SPEAKING, FROM THE THE DATE OF

01:10:12.575 --> 01:10:17.546
THE FIRE TO THE TIME SUIT IS

01:10:17.613 --> 01:10:19.415
FILED. GENERALLY SPEAKING, YOU

01:10:19.481 --> 01:10:20.783
COULD PROBABLY LOOK AT

01:10:20.849 --> 01:10:22.418
SOMETHING IN THE VICINITY OF A

01:10:22.484 --> 01:10:24.153
YEAR TO A YEAR AND A HALF. BUT

01:10:24.219 --> 01:10:27.656
THAT IS ALSO DEPENDENT UPON, I

01:10:27.723 --> 01:10:29.425
GUESS, THE CONCEPT OF EVERYBODY

01:10:29.491 --> 01:10:30.893
PLAYING IN THE SANDBOX TOGETHER,

01:10:30.960 --> 01:10:32.361
GETTING THE EXPERTS TOGETHER SO

01:10:32.428 --> 01:10:34.897
THAT THEY CAN REVIEW THINGS

01:10:34.964 --> 01:10:36.365
WITHOUT SOMEBODY DELAYING THEIR

01:10:36.432 --> 01:10:38.133
EXPERTS BEING AVAILABLE TO COME

01:10:38.200 --> 01:10:40.636
AND LOOK AT SOMETHING. SO IT'S

01:10:40.703 --> 01:10:44.640
ALL RELATIVE TO HOW THE

01:10:44.707 --> 01:10:46.375
PARTICIPANTS WORK WITH ONE

01:10:46.442 --> 01:10:47.943
ANOTHER. BUT GENERALLY SPEAKING,

01:10:48.010 --> 01:10:49.612
I WOULD I'M COMFORTABLE IN

01:10:49.678 --> 01:10:51.180
SAYING WITHIN A YEAR TO YEAR

01:10:51.246 --> 01:10:53.248
AND A HALF, WE'RE PRETTY

01:10:53.315 --> 01:10:55.084
SATISFIED AS A GENERAL RULE, AS

01:10:55.150 --> 01:10:56.552
TO WHERE WE MIGHT BE ABLE TO GO

01:10:56.619 --> 01:10:58.454
WITH A CASE. SOME HAVE BEEN

01:10:58.520 --> 01:11:01.123
LONGER. AND THEN HOW LONG ARE

01:11:01.190 --> 01:11:03.592
THESE CASES AGAIN? BECAUSE I

01:11:03.659 --> 01:11:05.494
THINK WE'RE REALLY ONLY TALKING.

01:11:05.561 --> 01:11:07.630
I THINK WE'RE REALLY FOCUSED ON

01:11:07.696 --> 01:11:11.600
THESE LARGE CATASTROPHIC EVENTS.

01:11:11.667 --> 01:11:13.102
SO IN THOSE SITUATIONS, HOW

01:11:13.168 --> 01:11:15.204
LONG IS IT TAKING FOR THERE TO

01:11:15.270 --> 01:11:16.905
BE RESOLUTION? HOW LONG ARE

01:11:16.972 --> 01:11:19.174
THESE LAWSUITS DRAGGING OUT?

01:11:19.241 --> 01:11:21.310
WELL, LOOK, I GAVE YOU THE

01:11:21.377 --> 01:11:22.745
EXAMPLE OF 18 MONTHS WITH THE

01:11:22.811 --> 01:11:26.415
FIRES IN SAN DIEGO IN 2007.

01:11:26.482 --> 01:11:27.783
TALK ABOUT MAJOR CATASTROPHIC

01:11:27.850 --> 01:11:31.553
LOSS MATTERS. THE THE WOOLSEY

01:11:31.620 --> 01:11:32.821
AND THOMAS FIRES THAT TOOK

01:11:32.888 --> 01:11:37.092
PLACE IN LA. PARDON ME. ABOUT A

01:11:37.159 --> 01:11:38.694
DECADE LATER, THOSE A LITTLE

01:11:38.761 --> 01:11:40.729
BIT MORE THAN A DECADE LATER,

01:11:40.796 --> 01:11:42.598
THOSE AGAIN, RESOLUTION WAS

01:11:42.665 --> 01:11:44.033
ACHIEVED FROM THE DATE OF THE

01:11:44.099 --> 01:11:46.101
FIRE. WITHIN TWO, TWO AND A

01:11:46.168 --> 01:11:47.302
HALF YEARS, WE'VE HAD SOME THAT

01:11:47.369 --> 01:11:50.372
HAVE BEEN LONGER BECAUSE OF THE

01:11:50.439 --> 01:11:52.675
NATURE. WELL, OBVIOUSLY THE

01:11:52.741 --> 01:11:55.144
NAPA VALLEY SCENARIO, THE NAPA

01:11:55.210 --> 01:11:57.680
FIRES WITH PG AND E, THAT THAT

01:11:57.746 --> 01:11:59.748
ENTAILED A BANKRUPTCY. I MEAN,

01:11:59.815 --> 01:12:03.085
SO THAT THAT WAS THAT THAT WAS

01:12:03.152 --> 01:12:04.820
A KIND OF AN OUTLIER, IF YOU

01:12:04.887 --> 01:12:06.689
WILL. THAT'S THE ONLY ONE THAT

01:12:06.755 --> 01:12:09.224
WE'VE EVER HAD WHERE THAT'S

01:12:09.291 --> 01:12:10.592
OCCURRED ACROSS THE UNITED

01:12:10.659 --> 01:12:13.896
STATES. SO BUT FROM AN

01:12:13.962 --> 01:12:15.297
EXPERIENCE ACROSS THE BOARD

01:12:15.364 --> 01:12:17.066
AROUND THE COUNTRY, WE REALLY

01:12:17.132 --> 01:12:21.303
SEE THAT FROM A STANDPOINT OF

01:12:21.370 --> 01:12:24.673
RESOLUTION. WITHIN TWO YEARS,

01:12:24.740 --> 01:12:27.876
WE'RE REALLY SHOOTING FOR THAT.

01:12:27.943 --> 01:12:29.778
AND THEN WHEN MULTIPLE INSURERS

01:12:29.845 --> 01:12:31.447
HAVE POTENTIAL SUBROGATION

01:12:31.513 --> 01:12:33.282
CLAIMS FROM THE SAME EVENT. DO

01:12:33.348 --> 01:12:34.917
THEY TYPICALLY COORDINATE AND

01:12:34.983 --> 01:12:37.920
WORK TOGETHER, OR DO THEY

01:12:37.986 --> 01:12:39.288
JOINTLY FUND AN INVESTIGATION?

01:12:39.354 --> 01:12:41.924
OR IS EVERYBODY DOING OR DO WE

01:12:41.990 --> 01:12:43.926
HAVE 17 INSURANCE CARRIERS THAT

01:12:43.992 --> 01:12:45.828
ARE ALL DOING THEIR OWN

01:12:45.894 --> 01:12:47.996
INVESTIGATION? WE REALLY TRY TO

01:12:48.063 --> 01:12:49.465
AVOID THAT LAST SCENARIO,

01:12:49.531 --> 01:12:51.600
BECAUSE THAT SCENARIO LEADS TO

01:12:51.667 --> 01:12:54.103
DELAY. AND SO WHAT GENERALLY

01:12:54.169 --> 01:12:55.370
SPEAKING, OBVIOUSLY INSURERS

01:12:55.437 --> 01:12:57.806
ALL HAVE THEIR OWN APPETITE FOR

01:12:57.873 --> 01:12:59.508
RESOLUTION OR PROCEEDING

01:12:59.575 --> 01:13:01.643
FORWARD WITH LITIGATION. BUT

01:13:01.710 --> 01:13:06.048
GENERALLY SPEAKING. WHEN PEOPLE

01:13:06.115 --> 01:13:07.416
WORK TOGETHER, JUST AS

01:13:07.483 --> 01:13:08.917
INDIVIDUAL PLAINTIFFS WORK

01:13:08.984 --> 01:13:10.686
TOGETHER, YOU SHARE FROM A

01:13:10.753 --> 01:13:12.121
STANDPOINT OF THE COST OF THE

01:13:12.187 --> 01:13:13.589
ECONOMICS, OF ALL THE EXPERTS

01:13:13.655 --> 01:13:15.724
INVOLVED AND THE EXPERTISE. SO

01:13:15.791 --> 01:13:18.260
IF IT'S BETTER TO HAVE A, A SET

01:13:18.327 --> 01:13:20.062
GROUP OF EXPERTS, AS OPPOSED TO

01:13:20.129 --> 01:13:21.797
FIVE SET GROUPS OF EXPERTS

01:13:21.864 --> 01:13:23.265
WHERE THE COSTS ARE GREATER.

01:13:23.332 --> 01:13:25.768
AND IT, IT DELAYS THE PROCESS.

01:13:25.834 --> 01:13:28.303
SO, YES, PEOPLE DO TRY TO WORK

01:13:28.370 --> 01:13:30.839
TOGETHER. AND I THINK TO SOME

01:13:30.906 --> 01:13:32.674
EXTENT, IT'S IT'S BEEN PRETTY

01:13:32.741 --> 01:13:34.042
EFFECTIVE IN TERMS OF PEOPLE

01:13:34.109 --> 01:13:37.312
WORKING TOGETHER. AND I GUESS.

01:13:37.379 --> 01:13:39.148
SO MY FOLLOW UP QUESTION, AND

01:13:39.214 --> 01:13:41.283
THIS IS SOMETHING THAT I'VE

01:13:41.350 --> 01:13:43.485
REALLY STRUGGLED TO UNDERSTAND,

01:13:43.552 --> 01:13:47.189
IS IN. I ABSOLUTELY UNDERSTAND

01:13:47.256 --> 01:13:49.224
IN MOST STATES, WHAT YOU

01:13:49.291 --> 01:13:50.659
DESCRIBED ABOUT THE

01:13:50.726 --> 01:13:51.693
INVESTIGATION THAT GOES ON AND

01:13:51.760 --> 01:13:54.263
YOU TALKED ABOUT THE, YOU KNOW,

01:13:54.329 --> 01:13:55.264
METALLURGY AND DIFFERENT

01:13:55.330 --> 01:13:57.833
SCENARIOS. BUT IN THE STATE OF

01:13:57.900 --> 01:13:58.634
CALIFORNIA, WE ARE THE ONLY

01:13:58.700 --> 01:14:00.469
STATE IN THE UNION, AS I KNOW,

01:14:00.536 --> 01:14:02.838
YOU KNOW, WITH INVERSE

01:14:02.905 --> 01:14:03.906
CONDEMNATION AND A STRICT

01:14:03.972 --> 01:14:06.742
LIABILITY STANDARD. SO GIVEN

01:14:06.809 --> 01:14:10.779
THAT, WHAT EXACTLY IS THE ROLE?

01:14:10.846 --> 01:14:12.247
HOW DO THESE HOW DO THE

01:14:12.314 --> 01:14:13.315
OUTCOMES OF THESE

01:14:13.382 --> 01:14:14.550
INVESTIGATIONS CHANGE ANYTHING

01:14:14.616 --> 01:14:17.553
IN TERMS OF THE ULTIMATE

01:14:17.619 --> 01:14:21.924
LIABILITY AND THE ULTIMATE, I

01:14:21.990 --> 01:14:23.692
GUESS, YOU KNOW, COST NUMBER

01:14:23.759 --> 01:14:25.561
THAT GETS THAT GETS RESOLVED.

01:14:25.627 --> 01:14:29.131
OKAY. ONE POINT OF

01:14:29.198 --> 01:14:29.865
CLARIFICATION. CALIFORNIA IS

01:14:29.932 --> 01:14:31.133
NOT THE ONLY STATE WHERE

01:14:31.200 --> 01:14:32.701
INVERSE CONDEMNATION IS

01:14:32.768 --> 01:14:34.269
RECOGNIZED ONLY WITH ONLY ONE

01:14:34.336 --> 01:14:37.406
WITH STRICT LIABILITY, BUT

01:14:37.472 --> 01:14:38.473
THAT'S I'M IN CALIFORNIA, SO

01:14:38.540 --> 01:14:39.608
WE'RE GOING TO TALK ABOUT

01:14:39.675 --> 01:14:42.444
CALIFORNIA. SECONDLY, THE

01:14:42.511 --> 01:14:44.613
INVESTIGATION PROCESS IS VERY

01:14:44.680 --> 01:14:46.048
NECESSARY FOR PURPOSES OF

01:14:46.114 --> 01:14:47.482
DETERMINING AN INVERSE

01:14:47.549 --> 01:14:48.550
CONDEMNATION SCENARIO, WHETHER

01:14:48.617 --> 01:14:51.086
OR NOT WHAT THE UTILITY

01:14:51.153 --> 01:14:52.554
INTENDED TO DO, WHAT THEY

01:14:52.621 --> 01:14:54.323
INTENDED TO EMPLOY IN TERMS OF

01:14:54.389 --> 01:14:57.526
THEIR OPERATIONS SYSTEM WAS IN

01:14:57.593 --> 01:15:01.897
FACT THE CAUSE OF THE FIRE. AND

01:15:01.964 --> 01:15:03.699
IT'S NOT THAT. AND PEOPLE GET

01:15:03.765 --> 01:15:05.167
THIS MIXED UP ALL THE TIME.

01:15:05.234 --> 01:15:06.535
THEY THINK SOMEHOW INVERSE

01:15:06.602 --> 01:15:07.569
CONDEMNATION IS THAT, WELL,

01:15:07.636 --> 01:15:09.805
NOBODY NO UTILITY INTENDS TO

01:15:09.872 --> 01:15:11.640
START A WILDFIRE. THAT'S NOT

01:15:11.707 --> 01:15:12.708
THAT'S NOT WHAT WE'RE TALKING

01:15:12.774 --> 01:15:14.076
ABOUT. BUT WHAT WE NEED TO

01:15:14.142 --> 01:15:15.210
INVESTIGATE IS TO DETERMINE

01:15:15.277 --> 01:15:18.080
WHETHER OR NOT THE INTENDED

01:15:18.146 --> 01:15:20.616
FUNCTION OF THE SYSTEM AS

01:15:20.682 --> 01:15:25.287
DESIGNED LED TO THE FIRE. AND

01:15:25.354 --> 01:15:28.924
THAT IS SOMETHING THAT ALWAYS

01:15:28.991 --> 01:15:31.026
REQUIRES SCIENTIFIC ANALYSIS,

01:15:31.093 --> 01:15:36.098
STUDY PROOF, EVIDENCE TO

01:15:36.164 --> 01:15:39.301
SUPPORT ANY ALLEGATION THAT

01:15:39.368 --> 01:15:41.803
THIS PARTICULAR SYSTEM, AS

01:15:41.870 --> 01:15:45.474
DESIGNED, CAUSED THE FIRE. THAT

01:15:45.540 --> 01:15:47.976
HAS TO BE DONE IT. IT'S NOT

01:15:48.043 --> 01:15:49.344
SOMETHING THAT YOU CAN JUST SAY,

01:15:49.411 --> 01:15:50.345
OH, IT'S INVERSE CONDEMNATION.

01:15:50.412 --> 01:15:51.480
THAT JUST MEANS WE'RE GONNA,

01:15:51.546 --> 01:15:52.581
YOU KNOW, UTILITY IS GOING TO

01:15:52.648 --> 01:15:54.449
BE HELD LIABLE. THAT IS SO

01:15:54.516 --> 01:15:57.352
UNTRUE. IT IS SO UNTRUE. PEOPLE

01:15:57.419 --> 01:15:59.187
GET IT MIXED UP ALL THE TIME

01:15:59.254 --> 01:16:00.188
THAT SOMEHOW INVERSE

01:16:00.255 --> 01:16:01.256
CONDEMNATION IS STRICT

01:16:01.323 --> 01:16:02.724
LIABILITY. IT IS NOT STRICT

01:16:02.791 --> 01:16:03.792
LIABILITY IS TAUGHT. INVERSE

01:16:03.859 --> 01:16:05.260
CONDEMNATION IS CONSTITUTIONAL

01:16:05.327 --> 01:16:07.396
LAW TOTALLY DIFFERENT CONCEPTS

01:16:07.462 --> 01:16:09.231
WHATSOEVER. BUT THE BUT THE

01:16:09.298 --> 01:16:11.400
ROOT ISSUE IN TERMS OF AN

01:16:11.466 --> 01:16:13.502
INVERSE CONDEMNATION PROCEEDING

01:16:13.568 --> 01:16:19.241
FOR PURPOSES OF OF A OBLIGATION

01:16:19.308 --> 01:16:23.245
OF A UTILITY TO OPERATE ITS

01:16:23.312 --> 01:16:24.780
SYSTEM. IT'S IT'S WHETHER OR

01:16:24.846 --> 01:16:27.582
NOT THAT SYSTEM WAS OPERATED,

01:16:27.649 --> 01:16:29.284
YOU KNOW, HOW IT WAS INTENDED

01:16:29.351 --> 01:16:30.786
TO BE OPERATED, IF IT WAS

01:16:30.852 --> 01:16:32.254
INTENDED TO BE OPERATED IN A

01:16:32.321 --> 01:16:34.089
CERTAIN WAY. AND THAT CERTAIN

01:16:34.156 --> 01:16:39.161
WAY CAUSED THE FIRE UNDER YOUR

01:16:39.227 --> 01:16:41.530
STATE CONSTITUTION AND UNDER

01:16:41.596 --> 01:16:44.066
YOUR STATE SUPREME COURT

01:16:44.132 --> 01:16:45.901
DECISIONS, THAT IS A BASIS FOR

01:16:45.968 --> 01:16:49.905
RECOVERY. AND ARE THERE

01:16:49.972 --> 01:16:51.640
EXAMPLES WHERE. AND AGAIN, I'M

01:16:51.707 --> 01:16:53.075
GOING TO USE SORT OF SIMPLE

01:16:53.141 --> 01:16:55.644
NUMBERS. SO MY HOUSE BURNS DOWN.

01:16:55.711 --> 01:16:57.813
MY HOUSE COST $1 MILLION. THE

01:16:57.879 --> 01:17:01.450
INSURER GIVES ME $1 MILLION. AT

01:17:01.516 --> 01:17:03.919
THE END OF THE DAY, IF THE

01:17:03.986 --> 01:17:05.787
UTILITY CAUSED THE FIRE, AREN'T

01:17:05.854 --> 01:17:07.122
THEY ULTIMATELY ON THE HOOK FOR

01:17:07.189 --> 01:17:09.725
THAT MILLION DOLLARS? AND NO

01:17:09.791 --> 01:17:11.159
MATTER WHAT YOUR INVESTIGATIONS

01:17:11.226 --> 01:17:13.895
TURN UP, THEY'RE EITHER ON THE

01:17:13.962 --> 01:17:15.097
HOOK FOR $1 MILLION OR THEY'RE

01:17:15.163 --> 01:17:18.000
NOT. RIGHT? IT'S LIKE A BINARY.

01:17:18.066 --> 01:17:19.801
ARE YOU TALKING ABOUT. I'M

01:17:19.868 --> 01:17:21.636
SORRY, ARE YOU? I MAY BE LOST

01:17:21.703 --> 01:17:23.238
HERE. ARE YOU TALKING ABOUT AN

01:17:23.305 --> 01:17:24.072
INVERSE CONDEMNATION SCENARIO

01:17:24.139 --> 01:17:25.307
OR YOU'RE JUST TALKING ABOUT IN

01:17:25.374 --> 01:17:27.676
A GENERAL CASE SCENARIO, ENSURE

01:17:27.743 --> 01:17:32.347
YOU'RE INSURED FOR Ó INVERSE.

01:17:32.414 --> 01:17:39.921
SO. IF IF THE IN THE CAUSE OF

01:17:39.988 --> 01:17:43.492
THE FIRE IS IS ROUTED TO THE

01:17:43.558 --> 01:17:45.627
INTENDED OPERATION OF THAT

01:17:45.694 --> 01:17:48.497
UTILITY SYSTEM, THAT UTILITIES

01:17:48.563 --> 01:17:52.134
EXPOSURE MAY BE 100% OF THE

01:17:52.200 --> 01:17:55.804
DAMAGE THAT THAT INDIVIDUAL NOT

01:17:55.871 --> 01:17:56.638
WISHING IT UPON YOU, BUT IN

01:17:56.705 --> 01:17:59.007
YOUR CASE, YOUR YOUR HOUSE, IF

01:17:59.074 --> 01:18:00.675
YOUR HOUSE BURNED DOWN AND YOU

01:18:00.742 --> 01:18:02.077
RECEIVE AND YOU HAD $1 MILLION

01:18:02.144 --> 01:18:04.312
OF DAMAGE AND YOU WERE PAID

01:18:04.379 --> 01:18:06.281
THAT MILLION DOLLARS OF DAMAGE,

01:18:06.348 --> 01:18:07.149
IRRESPECTIVE OF WHETHER YOU

01:18:07.215 --> 01:18:09.084
WERE PAID THAT OR NOT, THE

01:18:09.151 --> 01:18:10.519
UTILITY WOULD OWE THAT MILLION

01:18:10.585 --> 01:18:13.422
DOLLARS. IT JUST IS. IN A

01:18:13.488 --> 01:18:15.257
SUBROGATION SCENARIO, THE

01:18:15.323 --> 01:18:16.391
INSURER STEPPED INTO THE SHOES

01:18:16.458 --> 01:18:18.427
OF THE INSURED FOR PURPOSES OF

01:18:18.493 --> 01:18:19.995
PURSUING THAT RECOVERY UNDER

01:18:20.062 --> 01:18:26.368
THE LAW. YES. OKAY. GOT IT. IF

01:18:26.435 --> 01:18:28.637
I CAN ASK A FOLLOW UP QUESTION

01:18:28.703 --> 01:18:30.672
FOR MR. ROGERS. YEAH. BECAUSE

01:18:30.739 --> 01:18:31.873
PART OF WHAT I'M MISSING HERE,

01:18:31.940 --> 01:18:32.974
I THINK, IN THIS DISCUSSION,

01:18:33.041 --> 01:18:34.709
AND I THINK IT'S IMPORTANT, IS

01:18:34.776 --> 01:18:38.213
THERE ARE DIFFERENT NUMBERS.

01:18:38.280 --> 01:18:40.916
THE AMOUNT THAT A FIRE VICTIM

01:18:40.982 --> 01:18:43.819
LOST IS NOT NECESSARILY HOW

01:18:43.885 --> 01:18:45.087
MUCH THEIR SETTLEMENT OR

01:18:45.153 --> 01:18:48.323
INSURANCE PAID. AND THAT'S WHEN

01:18:48.390 --> 01:18:50.459
WE TALK ABOUT FIRE VICTIMS

01:18:50.525 --> 01:18:53.662
GETTING PAID OUT. THE QUESTION

01:18:53.728 --> 01:18:55.797
IS, IF YOU DIDN'T HAVE

01:18:55.864 --> 01:18:58.834
SUBROGATION AND YES, IF EVERY

01:18:58.900 --> 01:19:01.636
FIRE VICTIM WAS MADE 100% WHOLE,

01:19:01.703 --> 01:19:02.737
YOU MIGHT NOT HAVE TO GO

01:19:02.804 --> 01:19:04.139
THROUGH THE INVESTIGATIVE

01:19:04.206 --> 01:19:05.907
PROCESS. YOU'D SAY, THIS IS

01:19:05.974 --> 01:19:07.008
WHAT THEY LOST, THIS IS WHAT

01:19:07.075 --> 01:19:09.578
THE UTILITY IS OWED. BUT THAT'S

01:19:09.644 --> 01:19:11.313
IN A PERFECT IDEAL SYSTEM THAT

01:19:11.379 --> 01:19:13.215
DOESN'T EXIST IN CALIFORNIA. I

01:19:13.281 --> 01:19:14.583
DON'T THINK THAT EXISTS

01:19:14.649 --> 01:19:16.184
ANYWHERE. OR COULD IT? BECAUSE

01:19:16.251 --> 01:19:17.519
YOU HAVE TO HAVE THE

01:19:17.586 --> 01:19:18.520
INVESTIGATION TO DETERMINE

01:19:18.587 --> 01:19:19.988
WHETHER OR NOT THE UTILITY IS

01:19:20.055 --> 01:19:21.957
EVEN INVOLVED FROM A STANDPOINT

01:19:22.023 --> 01:19:23.758
OF THE ORIGIN OF THE FIRE OR

01:19:23.825 --> 01:19:26.128
THE CAUSE. SO LET ME SO FROM

01:19:26.194 --> 01:19:27.529
FROM MY PERSPECTIVE, THE

01:19:27.596 --> 01:19:31.133
QUESTION THAT IS RELEVANT IS

01:19:31.199 --> 01:19:34.035
WHAT VALUE DOES THE SUBROGATION

01:19:34.102 --> 01:19:36.571
PROCESS PROVIDE TO THE WILDFIRE

01:19:36.638 --> 01:19:39.107
VICTIM? DOES IT INCREASE

01:19:39.174 --> 01:19:40.876
ACCOUNTABILITY? DOES IT MAKE IT

01:19:40.942 --> 01:19:42.577
SO THAT THEIR PAYOUT IS GOING

01:19:42.644 --> 01:19:45.413
TO BE CLOSER TO THAT 100% IN

01:19:45.480 --> 01:19:49.184
SOME WAY? OR DOES THAT COST FOR

01:19:49.251 --> 01:19:52.053
THOSE EXPERTS AND THAT

01:19:52.120 --> 01:19:53.455
INVESTIGATION ACTUALLY IN SOME

01:19:53.522 --> 01:19:55.657
WAY, TAKE AWAY FROM THEM

01:19:55.724 --> 01:19:58.593
REACHING THAT 100%? SO YOUR

01:19:58.660 --> 01:20:01.062
SCENARIO, LIKE, I GET IT,

01:20:01.129 --> 01:20:02.063
EXCEPT THAT FIRE VICTIMS DON'T

01:20:02.130 --> 01:20:03.932
GET DON'T GET 100%. SO IF MY

01:20:03.999 --> 01:20:05.834
HOUSE IS WORTH A MILLION AND I

01:20:05.901 --> 01:20:07.302
HAVE IT BURNED DOWN, I'M NOT

01:20:07.369 --> 01:20:08.870
GOING TO GET A MILLION. AND

01:20:08.937 --> 01:20:09.971
WE'RE JUST ARGUING OVER WHERE

01:20:10.038 --> 01:20:11.006
THAT MILLION COMES FROM. THE

01:20:11.072 --> 01:20:13.308
QUESTION IS, DOES SUBROGATION

01:20:13.375 --> 01:20:15.744
INCREASE THE TOTAL PIE IN SOME

01:20:15.810 --> 01:20:17.279
MEANINGFUL WAY FOR THESE FOLKS

01:20:17.345 --> 01:20:20.849
OR NOT? 100%, 100%. IT

01:20:20.916 --> 01:20:22.284
INCREASES THE PIE BECAUSE IF

01:20:22.350 --> 01:20:24.452
YOU DIDN'T HAVE THE

01:20:24.519 --> 01:20:25.420
INVESTIGATION, IF YOU DIDN'T

01:20:25.487 --> 01:20:27.322
HAVE THE SCIENCE TO BACK UP

01:20:27.389 --> 01:20:30.192
YOUR ALLEGATION, IT'S SIMPLY A

01:20:30.258 --> 01:20:32.694
RAW ALLEGATION. WHAT

01:20:32.761 --> 01:20:34.162
SUBROGATION PROVIDES THE

01:20:34.229 --> 01:20:35.397
INDIVIDUAL, WHETHER THE

01:20:35.463 --> 01:20:37.065
INDIVIDUAL IS INSURED BY THAT

01:20:37.132 --> 01:20:39.167
CARRIER, UNINSURED OR INSURED

01:20:39.234 --> 01:20:41.670
BY ANOTHER CARRIER, THAT

01:20:41.736 --> 01:20:44.639
INDIVIDUAL BENEFITS 100% FROM

01:20:44.706 --> 01:20:46.408
THE INVESTIGATION THAT IS

01:20:46.474 --> 01:20:47.876
PROVIDED BY THE INSURANCE

01:20:47.943 --> 01:20:49.277
INDUSTRY. THE INSURANCE

01:20:49.344 --> 01:20:52.147
CARRIERS. THAT INDIVIDUAL COULD

01:20:52.214 --> 01:20:55.016
NEVER BEAR THAT COST 100

01:20:55.083 --> 01:20:55.884
INDIVIDUALS BANDED TOGETHER

01:20:55.951 --> 01:20:57.919
COULD NOT BEAR THAT COST. YEAH.

01:20:57.986 --> 01:20:59.354
AND I THINK WHAT I HEARD FROM

01:20:59.421 --> 01:21:02.924
THE QUESTION FROM THE CHAIR IS

01:21:02.991 --> 01:21:06.962
IN A STRICT LIABILITY SCENARIO,

01:21:07.028 --> 01:21:09.064
HOW MUCH VALUE ADD DOES THAT

01:21:09.130 --> 01:21:11.233
INVESTIGATION ACTUALLY HAVE?

01:21:11.299 --> 01:21:12.334
BECAUSE WE ALREADY KNOW WHAT

01:21:12.400 --> 01:21:14.803
THE LOSS ARE. WE KNOW WHAT

01:21:14.869 --> 01:21:17.339
THEORETICALLY SHOULD BE OWED.

01:21:17.405 --> 01:21:19.874
SO THE I, I'M KIND OF ASKING

01:21:19.941 --> 01:21:21.977
THE QUESTION IN A, IN A LEADING

01:21:22.043 --> 01:21:24.179
WAY, LIKE WHERE IS THE VALUE

01:21:24.246 --> 01:21:26.681
ADD? AND IF SUBROGATION WENT

01:21:26.748 --> 01:21:28.850
AWAY, WHAT WOULD THE IMPACT ON

01:21:28.917 --> 01:21:31.753
WILDFIRE VICTIMS BE? OKAY.

01:21:31.820 --> 01:21:33.555
AGAIN, GOING BACK TO INVERSE

01:21:33.622 --> 01:21:35.724
CONDEMNATION, IT'S NOT STRICT

01:21:35.790 --> 01:21:37.859
LIABILITY. INVERSE CONDEMNATION

01:21:37.926 --> 01:21:40.362
IS A CONSTITUTIONAL CLAIM THAT

01:21:40.428 --> 01:21:43.965
IS BASED UPON THE PREMISE THAT

01:21:44.032 --> 01:21:46.501
THE UTILITY WILL BE HELD

01:21:46.568 --> 01:21:49.070
ACCOUNTABLE IF IT IS DETERMINED

01:21:49.137 --> 01:21:50.872
THROUGH AN INVESTIGATION, BASED

01:21:50.939 --> 01:21:54.809
UPON EVIDENCE THAT THE FIRE

01:21:54.876 --> 01:21:57.012
OCCURRED, IRRESPECTIVE OF

01:21:57.078 --> 01:21:58.079
WHETHER THE UTILITY DID

01:21:58.146 --> 01:21:59.848
SOMETHING RIGHT, WRONG OR

01:21:59.914 --> 01:22:01.583
INDIFFERENT, BUT THAT THE FIRE

01:22:01.650 --> 01:22:04.486
OCCURRED THROUGH THE INTENDED

01:22:04.552 --> 01:22:07.055
OPERATION OF THAT UTILITY'S

01:22:07.122 --> 01:22:09.524
SYSTEM. THE ONLY WAY THE ONLY

01:22:09.591 --> 01:22:11.359
WAY YOU'RE GOING TO MAKE THAT

01:22:11.426 --> 01:22:12.727
DETERMINATION IS THROUGH A

01:22:12.794 --> 01:22:14.629
SCIENTIFIC INVESTIGATION. AND

01:22:14.696 --> 01:22:17.098
THAT SCIENTIFIC INVESTIGATION

01:22:17.165 --> 01:22:18.533
REQUIRES, AS I'VE EXPLAINED

01:22:18.600 --> 01:22:21.770
BEFORE, THE ELEMENTS OF

01:22:21.836 --> 01:22:23.672
EXPERTISE BEING BROUGHT IN, AND

01:22:23.738 --> 01:22:24.973
IT IS TRADITIONALLY BROUGHT IN

01:22:25.040 --> 01:22:26.841
BY THE INSURANCE INDUSTRY FOR

01:22:26.908 --> 01:22:28.977
PURPOSES OF CONDUCTING THESE

01:22:29.044 --> 01:22:31.179
INVESTIGATIONS, TO MAKE THE

01:22:31.246 --> 01:22:32.580
DETERMINATION AS TO WHETHER OR

01:22:32.647 --> 01:22:34.382
NOT, IN THIS PARTICULAR

01:22:34.449 --> 01:22:38.019
INSTANCE, THE FIRE WAS CAUSED

01:22:38.086 --> 01:22:41.589
THROUGH THE INTENDED USE OF

01:22:41.656 --> 01:22:47.062
THAT SYSTEM. SO I KNOW THAT

01:22:47.128 --> 01:22:48.430
SOMETIMES PEOPLE DO MISTAKE

01:22:48.496 --> 01:22:51.666
THAT FOR STRICT LIABILITY. IT

01:22:51.733 --> 01:22:53.935
IS NOT STRICT LIABILITY. THAT

01:22:54.002 --> 01:22:56.004
IS A TORT THEORY. WE'RE TALKING

01:22:56.071 --> 01:22:57.405
ABOUT CONSTITUTIONAL CLAIM

01:22:57.472 --> 01:23:00.241
BASED UPON TAKING A PROPERTY

01:23:00.308 --> 01:23:02.877
WITHOUT DUE PROCESS. AND IN

01:23:02.944 --> 01:23:05.413
THIS CONTEXT, IT HAS BEEN

01:23:05.480 --> 01:23:07.582
CLEARLY DETERMINED BY THE STATE

01:23:07.649 --> 01:23:11.119
OF CALIFORNIA THROUGH THE Ã

01:23:11.186 --> 01:23:13.955
BARNUM DECISION, STATE SUPREME

01:23:14.022 --> 01:23:16.524
COURT, HOW THAT TAKES PLACE.

01:23:16.591 --> 01:23:18.293
BUT IT'S NOT SIMPLY SAYING

01:23:18.360 --> 01:23:23.398
THERE'S A FIRE UTILITY YOU PAY.

01:23:23.465 --> 01:23:25.900
YOU HAVE TO SAY THERE'S A FIRE.

01:23:25.967 --> 01:23:27.635
WHERE WAS THE ORIGIN OF THE

01:23:27.702 --> 01:23:31.639
FIRE? HOW DID THE FIRE DEVELOP?

01:23:31.706 --> 01:23:34.943
WHAT CAUSED THAT FIRE WAS THE

01:23:35.009 --> 01:23:37.445
CAUSE A, A, AN ELEMENT OF THE

01:23:37.512 --> 01:23:39.547
INTENDED OPERATION OF THAT

01:23:39.614 --> 01:23:41.082
SYSTEM BY THAT UTILITY? OR WAS

01:23:41.149 --> 01:23:43.485
THE CAUSE SOMETHING THAT THE

01:23:43.551 --> 01:23:45.387
UTILITY HAD DID NOT INTEND FROM

01:23:45.453 --> 01:23:48.223
THE STANDPOINT OF ITS OPERATION

01:23:48.289 --> 01:23:51.226
TO OCCUR? THESE ARE ALL FACTORS

01:23:51.292 --> 01:23:52.460
THAT HAVE TO BE WEIGHED IN

01:23:52.527 --> 01:23:54.295
THROUGH A SCIENTIFIC ANALYSIS.

01:23:54.362 --> 01:23:56.865
IF YOU ELIMINATE THAT, YOU

01:23:56.931 --> 01:23:59.000
SIMPLY ARE ELIMINATING THE ONLY

01:23:59.067 --> 01:24:00.135
WAY THAT YOU'RE EVER GOING TO

01:24:00.201 --> 01:24:02.270
MAKE A DETERMINATION AS TO

01:24:02.337 --> 01:24:03.438
WHETHER OR NOT THAT UTILITY

01:24:03.505 --> 01:24:07.275
CAUSED THAT FIRE. AND THEN IF I

01:24:07.342 --> 01:24:08.410
MAY JUST CLARIFY ONE POINT AND

01:24:08.476 --> 01:24:10.245
THEN, MISS PAPIN, I'LL TURN TO

01:24:10.311 --> 01:24:11.613
YOU. DO YOU THINK IT'S

01:24:11.679 --> 01:24:13.047
IMPORTANT FOR US TO UNDERSTAND

01:24:13.114 --> 01:24:14.482
ONCE AGAIN, AS I SAID, LIKE

01:24:14.549 --> 01:24:15.917
WE'VE GOT TWO PROCESSES THAT

01:24:15.984 --> 01:24:18.420
ARE UNFOLDING SIMULTANEOUSLY,

01:24:18.486 --> 01:24:22.757
BUT THE WHAT THE INSURER IS

01:24:22.824 --> 01:24:24.559
PAYING TO THE HOMEOWNER TO

01:24:24.626 --> 01:24:27.829
SETTLE THEIR CLAIM, THAT IS

01:24:27.896 --> 01:24:31.399
SEPARATE FROM ANYTHING THAT IS

01:24:31.466 --> 01:24:33.535
HAPPENING ON THE SUBROGATION

01:24:33.601 --> 01:24:35.069
INVESTIGATION. CORRECT? THAT IS

01:24:35.136 --> 01:24:36.771
ABSOLUTELY CORRECT. IT HAS

01:24:36.838 --> 01:24:39.007
NOTHING TO DO WITH WHAT YOU GET

01:24:39.073 --> 01:24:41.109
PAID AS AN INDIVIDUAL. THAT IS

01:24:41.176 --> 01:24:42.544
EVERYTHING TO DO WITH YOU

01:24:42.610 --> 01:24:44.379
SETTLING A CLAIM WITH YOUR

01:24:44.446 --> 01:24:45.847
INSURER, AND THAT'S SEGREGATION

01:24:45.914 --> 01:24:47.215
CONTRACT. THE SUBROGATION

01:24:47.282 --> 01:24:50.084
PROCESS IS EXCLUSIVELY ABOUT

01:24:50.151 --> 01:24:52.620
HOW MUCH THE INSURERS THEN

01:24:52.687 --> 01:24:54.489
RECOUP FROM THE UTILITY. THAT

01:24:54.556 --> 01:24:56.558
IS WHAT THE PROCESS IS. THAT'S

01:24:56.624 --> 01:24:59.828
MISS PAPIN, WHICH I MAY. SO I'M

01:24:59.894 --> 01:25:01.396
I HAVE SOME BACKGROUND WITH IT.

01:25:01.463 --> 01:25:03.164
SO I'M GOING TO TRY TO SIMPLIFY

01:25:03.231 --> 01:25:04.532
THIS. AND YOU'RE ABSOLUTELY

01:25:04.599 --> 01:25:06.301
RIGHT. SO WE'VE GOT DIFFERENT,

01:25:06.367 --> 01:25:08.102
DIFFERENT RELATIONSHIPS, IF YOU

01:25:08.169 --> 01:25:10.672
WILL. SO YOU GOT HOMEOWNER TO

01:25:10.738 --> 01:25:12.073
INSURED AND MISTER ROGERS IS

01:25:12.140 --> 01:25:13.608
TELLING US, HEY, YOU NEVER GET

01:25:13.675 --> 01:25:15.410
THE FULL COST OF YOUR LOSS. AND

01:25:15.477 --> 01:25:16.678
THAT MIGHT BE UNDERWRITING

01:25:16.744 --> 01:25:18.179
ISSUES THAT WE MIGHT WANT TO

01:25:18.246 --> 01:25:20.381
TALK ABOUT AT SOME POINT.

01:25:20.448 --> 01:25:21.416
TOTALLY DIFFERENT ISSUE. BUT

01:25:21.483 --> 01:25:22.617
AND I RECOGNIZE YOU HAD A LOT

01:25:22.684 --> 01:25:24.519
OF FIRES IN YOUR AREA AND

01:25:24.586 --> 01:25:25.720
PEOPLE HAVE NOT BEEN MADE WHOLE.

01:25:25.787 --> 01:25:27.555
GOT THAT PART OF IT. I THINK

01:25:27.622 --> 01:25:29.457
WHAT WE'RE WHAT WE'VE COME HERE

01:25:29.524 --> 01:25:30.625
TODAY ABOUT IS HOW DO WE SHARE

01:25:30.692 --> 01:25:32.427
THIS RISK. AND THAT'S WHAT

01:25:32.494 --> 01:25:33.661
BRINGS YOU HERE TODAY. AND I

01:25:33.728 --> 01:25:35.530
WANT WHAT I THINK THE CHAIR IS

01:25:35.597 --> 01:25:38.366
GETTING AT, IF I MAY, IS WHAT.

01:25:38.433 --> 01:25:40.201
AND IN THE BACKGROUND, YOU USE

01:25:40.268 --> 01:25:42.670
THIS TERM TRANSACTIONAL COSTS.

01:25:42.737 --> 01:25:44.506
AND THE TRANSACTIONAL COSTS

01:25:44.572 --> 01:25:46.641
INCLUDE USER AND AND HOW MUCH

01:25:46.708 --> 01:25:48.443
ATTORNEYS GET PAID. AND IT MAY

01:25:48.510 --> 01:25:50.311
BE THAT YOU TAKE A CUT OF EVERY

01:25:50.378 --> 01:25:52.180
SETTLEMENT THAT YOU MAKE IN THE

01:25:52.247 --> 01:25:53.147
SUBROGATION WORLD. AND I'M

01:25:53.214 --> 01:25:54.215
ASSUMING THAT'S HOW. AND I'M

01:25:54.282 --> 01:25:55.416
NOT SAYING YOU AIN'T ENTITLED

01:25:55.483 --> 01:25:57.151
TO YOUR MONEY, THAT'S IT'S NOT

01:25:57.218 --> 01:25:59.153
A HOBBY. YEAH, I GOT YOU, I GOT

01:25:59.220 --> 01:26:00.288
YOU, AND THAT'S FAIR. THAT'S

01:26:00.355 --> 01:26:02.090
FAIR. BUT I THINK WHAT WE'RE

01:26:02.156 --> 01:26:04.659
LOOKING AT TODAY, WHEN WE'RE

01:26:04.726 --> 01:26:06.494
TALKING ABOUT INSURANCE

01:26:06.561 --> 01:26:07.862
COMPANIES AND WHAT THEIR RATES

01:26:07.929 --> 01:26:10.031
ARE, AND BY THE WAY, IF THEY

01:26:10.098 --> 01:26:11.132
RECOVER SOMETHING IN THE

01:26:11.199 --> 01:26:12.367
SUBROGATION WORLD AND AND

01:26:12.433 --> 01:26:14.068
YOU'VE BROUGHT THEM SOME VALUE,

01:26:14.135 --> 01:26:15.136
IT CERTAINLY MIGHT HELP US ON

01:26:15.203 --> 01:26:17.605
THE RATES THAT WE ALL PAY, OR

01:26:17.672 --> 01:26:19.207
THOSE OF US THAT OWN PROPERTY

01:26:19.274 --> 01:26:20.808
HAVE THE PRIVILEGE OF OWNING

01:26:20.875 --> 01:26:21.943
PROPERTY, THE HOMEOWNERS RATES

01:26:22.010 --> 01:26:23.344
THAT WE PAY. BECAUSE IF THEY'RE

01:26:23.411 --> 01:26:24.846
ABLE TO RECOVER, WHAT DOES THAT

01:26:24.913 --> 01:26:26.948
MEAN? THEY HAVE LESS LOSS.

01:26:27.015 --> 01:26:29.484
THEY'RE TRYING TO REDUCE GET

01:26:29.551 --> 01:26:30.351
SOMETHING BACK FROM WHAT

01:26:30.418 --> 01:26:32.687
THEY'VE PAID OUT. THAT'S

01:26:32.754 --> 01:26:33.488
SUBROGATION IN THE MOST

01:26:33.555 --> 01:26:37.025
FUNDAMENTAL WAY. BUT I SO WHAT

01:26:37.091 --> 01:26:38.493
WE'RE TALKING ABOUT TODAY IS

01:26:38.560 --> 01:26:39.961
WHAT ARE THESE TRANSACTIONAL

01:26:40.028 --> 01:26:41.129
COSTS? AND YOU ARE SPENDING

01:26:41.195 --> 01:26:42.864
MONEY DOING INVESTIGATIONS. AND

01:26:42.931 --> 01:26:44.632
IS THAT SOMETHING THAT WE MIGHT

01:26:44.699 --> 01:26:48.236
WANT TO LOOK AT AS A WAY OF

01:26:48.303 --> 01:26:50.004
TWEAKING THE ARRANGEMENTS HERE?

01:26:50.071 --> 01:26:51.472
AND, AND I DON'T KNOW WHETHER

01:26:51.539 --> 01:26:52.941
THAT IS OR IS NOT SOMETHING.

01:26:53.007 --> 01:26:54.776
AND WE'LL FIND THAT OUT AS WE

01:26:54.842 --> 01:26:55.843
GO FORWARD. BUT WHAT WE'RE

01:26:55.910 --> 01:26:57.745
TRYING TO GET AT IS WHAT ARE

01:26:57.812 --> 01:26:58.780
THOSE TRANSACTIONAL COSTS? WHAT

01:26:58.846 --> 01:26:59.914
DO WE PAY? WHAT ARE THE

01:26:59.981 --> 01:27:01.783
ATTORNEYS GETTING OUT OF IT? IF

01:27:01.849 --> 01:27:03.751
IF A HEDGE FUND HAS STEPPED IN

01:27:03.818 --> 01:27:05.587
TO BUY THESE CLAIMS, WHAT ARE

01:27:05.653 --> 01:27:07.322
THEY GETTING OUT OF IT? AND

01:27:07.388 --> 01:27:09.424
THEN WHAT IS THE INVESTIGATION

01:27:09.490 --> 01:27:10.692
COST? IF YOU DO HAVE, LIKE YOU

01:27:10.758 --> 01:27:12.327
SAY, PUBLIC INVESTIGATIONS AND

01:27:12.393 --> 01:27:14.829
PRIVATE INVESTIGATIONS. SO

01:27:14.896 --> 01:27:16.664
WHILE IT MAY NOT DIRECTLY

01:27:16.731 --> 01:27:18.499
AFFECT WHAT A WHAT AN ACTUAL

01:27:18.566 --> 01:27:20.668
VICTIM GETS, IT DOES AFFECT THE

01:27:20.735 --> 01:27:22.804
BIGGER PICTURE. HOW MUCH DO

01:27:22.870 --> 01:27:24.539
RATEPAYERS PAY? SHOULD THEY BE

01:27:24.606 --> 01:27:25.873
TOTALLY ON THE HOOK? WE HAD A

01:27:25.940 --> 01:27:26.941
HEARING YESTERDAY. WE HEARD

01:27:27.008 --> 01:27:29.611
FROM THE UTILITIES THERE TO THE

01:27:29.677 --> 01:27:31.112
HEAVENS ON WHAT THEIR BORROWING

01:27:31.179 --> 01:27:33.114
COSTS ARE TO TRY TO MAKE UP FOR

01:27:33.181 --> 01:27:34.182
THE WILDFIRE RISKS THAT THEY

01:27:34.248 --> 01:27:35.216
HAVE TO ACCOMMODATE. AND YOU

01:27:35.283 --> 01:27:37.085
DID TALK ABOUT HOW YOU THINK

01:27:37.151 --> 01:27:38.186
WILDFIRES HAVE COME DOWN. AND

01:27:38.252 --> 01:27:39.354
I'D LOVE TO KNOW WHERE THE

01:27:39.420 --> 01:27:40.388
CONNECTION TRULY IS BETWEEN

01:27:40.455 --> 01:27:42.523
SUBROGATION AND THAT. BUT AND

01:27:42.590 --> 01:27:46.160
THEN WE HAVE WE HAVE INSURANCE

01:27:46.227 --> 01:27:47.996
PEOPLE THAT PAY INSURANCE RATES.

01:27:48.062 --> 01:27:49.864
AND WHAT DOES THAT LOOK LIKE? I

01:27:49.931 --> 01:27:52.066
MEAN, I GET MY BILL JUST ABOUT,

01:27:52.133 --> 01:27:54.602
YOU KNOW, CHOKE. SO WE'RE

01:27:54.669 --> 01:27:55.837
TRYING TO SPREAD THE RISK. AND

01:27:55.903 --> 01:27:57.605
SO WHERE YOU COME IN AND WHERE

01:27:57.672 --> 01:27:58.773
THIS LINE OF QUESTIONING HAS

01:27:58.840 --> 01:28:00.508
GONE IS WHAT ARE THESE

01:28:00.575 --> 01:28:01.509
TRANSACTIONAL COSTS? IS THAT

01:28:01.576 --> 01:28:02.744
SOMETHING THAT WE SHOULD BE

01:28:02.810 --> 01:28:04.545
LOOKING AT? AND I DON'T HAVE

01:28:04.612 --> 01:28:07.015
THE ANSWER, BUT I THINK THAT'S

01:28:07.081 --> 01:28:08.116
SOMETHING MAYBE THAT THE CHAIR

01:28:08.182 --> 01:28:09.651
WAS GETTING AT WITH THE COSTS

01:28:09.717 --> 01:28:11.352
OF INVESTIGATIONS AND ALL THOSE

01:28:11.419 --> 01:28:13.254
THINGS, I DON'T KNOW. THANK YOU.

01:28:13.321 --> 01:28:14.455
YES. THANK YOU WASN'T REALLY A

01:28:14.522 --> 01:28:15.456
QUESTION, BUT THAT'S OKAY.

01:28:15.523 --> 01:28:17.125
THANK YOU. I COULD LIGHTEN THE

01:28:17.191 --> 01:28:18.393
DISCUSSION. THANK YOU. THANK

01:28:18.459 --> 01:28:20.028
YOU, MISS PEPIN. YES, THAT WAS

01:28:20.094 --> 01:28:22.130
HELPFUL. I CAN CAN I CHAIR I'M

01:28:22.196 --> 01:28:24.065
SORRY, MAY I JUST ADDRESS I

01:28:24.132 --> 01:28:25.500
THINK THERE WAS A QUESTION IN

01:28:25.566 --> 01:28:27.101
THERE THAT IF I COULD JUST

01:28:27.168 --> 01:28:29.037
ADDRESS THERE WAS ABOUT YOU

01:28:29.103 --> 01:28:30.505
THINK THAT THERE WOULD BE LESS

01:28:30.571 --> 01:28:31.572
WILDFIRES BECAUSE WE'VE HAD

01:28:31.639 --> 01:28:32.573
SUBROGATION. AND THE ARGUMENT

01:28:32.640 --> 01:28:34.108
IS, I THINK WHERE YOU'RE HEADED

01:28:34.175 --> 01:28:37.011
IS IT KEEPS THE UTILITIES

01:28:37.078 --> 01:28:38.346
WORKING TOWARDS REDUCING

01:28:38.413 --> 01:28:39.814
WILDFIRE RISK. IF THERE HAVE

01:28:39.881 --> 01:28:42.050
THIS CONCERN ABOUT SUBROGATION

01:28:42.116 --> 01:28:44.452
AND HAVING TO ULTIMATELY

01:28:44.519 --> 01:28:46.154
REIMBURSE CARRIERS OR WHOMEVER

01:28:46.220 --> 01:28:47.422
YOUR CLIENT MIGHT BE AT ANY

01:28:47.488 --> 01:28:49.123
GIVEN TIME, IS THAT FAIR TO SAY?

01:28:49.190 --> 01:28:51.092
AND IS THERE DATA TO THAT? THAT

01:28:51.159 --> 01:28:52.560
IS AN UNDENIABLE FACT. WHERE'S

01:28:52.627 --> 01:28:55.029
THE DATA? THE DATA AS TO COME

01:28:55.096 --> 01:28:56.698
IN? THERE'S AN UNDENIABLE FACT

01:28:56.764 --> 01:28:58.533
WITHOUT DATA, YOU GOT SOME DATA

01:28:58.599 --> 01:29:02.103
AS TO THAT. IF SUBROGATION WAS

01:29:02.170 --> 01:29:05.440
REMOVED, THAT UTILITIES WOULD

01:29:05.506 --> 01:29:07.108
WOULD NOT BE HELD ACCOUNTABLE.

01:29:07.175 --> 01:29:09.010
WELL, NO NO NO NO NO NO NO.

01:29:09.077 --> 01:29:10.945
WHAT I BELIEVE YOU SAID IS THE

01:29:11.012 --> 01:29:12.914
RISK OF WILDFIRE HAS COME DOWN

01:29:12.980 --> 01:29:15.450
AND UTILITIES ARE WORKING ON

01:29:15.516 --> 01:29:16.951
REDUCING THAT RISK BECAUSE THE

01:29:17.018 --> 01:29:18.519
THREAT OF SUBROGATION REMAINS

01:29:18.586 --> 01:29:21.589
OUT THERE. DID YOU NOT SAY THAT

01:29:21.656 --> 01:29:23.324
SUBROGATION IS CLEARLY AN

01:29:23.391 --> 01:29:24.826
ELEMENT TO THAT CONCEPT?

01:29:24.892 --> 01:29:27.061
BECAUSE LIKE I SAID BEFORE,

01:29:27.128 --> 01:29:28.796
WHAT WE'VE LEARNED THROUGH, AS

01:29:28.863 --> 01:29:31.065
I SAID, FIRES THAT OCCURRED IN

01:29:31.132 --> 01:29:33.134
THE REARVIEW MIRROR. BUT WE

01:29:33.201 --> 01:29:34.569
KNOW WE KNOW FROM A STANDPOINT

01:29:34.635 --> 01:29:36.504
OF FUTURE STANDPOINT, I CAN

01:29:36.571 --> 01:29:38.506
GIVE YOU A SPECIFIC EXAMPLE IF

01:29:38.573 --> 01:29:39.774
YOU'D LIKE. NO, I DON'T WANT TO

01:29:39.841 --> 01:29:41.609
SPEAK. I'D LIKE TO SEE SOME

01:29:41.676 --> 01:29:43.845
HARD DATA ON THAT PARTICULAR

01:29:43.911 --> 01:29:45.379
FACT. IT WAS ONE OF THE

01:29:45.446 --> 01:29:46.481
QUESTIONS I CAME PREPARED TODAY

01:29:46.547 --> 01:29:49.383
TO ASK. I'M JUST HERE AS AN

01:29:49.450 --> 01:29:50.785
INDIVIDUAL, MA'AM. I DON'T HAVE

01:29:50.852 --> 01:29:55.389
DATA ACCESS. I THINK

01:29:55.456 --> 01:29:57.225
PHILOSOPHICALLY THERE THERE IS

01:29:57.291 --> 01:29:59.060
A CONCERN ABOUT SUBROGATION AND

01:29:59.127 --> 01:30:01.562
IT DOES AFFECT CONDUCT OF THE

01:30:01.629 --> 01:30:03.731
UTILITIES IN IN MAKING SURE

01:30:03.798 --> 01:30:05.199
THAT THEY'RE REDUCING AS MUCH

01:30:05.266 --> 01:30:07.034
WILDFIRE RISK AS POSSIBLE. BUT

01:30:07.101 --> 01:30:09.003
I WOULD LOVE TO SEE SOME DATA

01:30:09.070 --> 01:30:10.605
TO THAT EFFECT. THAT'S ALL. I

01:30:10.671 --> 01:30:12.406
DID HEAR YOUR FINE PRESENTATION

01:30:12.473 --> 01:30:14.509
ABOUT SAN DIEGO AND HOW THEY'VE

01:30:14.575 --> 01:30:16.511
COME A LONG WAY. AND PG AND E

01:30:16.577 --> 01:30:17.712
MIGHT HAVE COME A LONG WAY AS

01:30:17.779 --> 01:30:19.614
WELL, BUT I JUST WOULD LOVE TO

01:30:19.680 --> 01:30:20.748
SEE SOMETHING, THAT'S ALL. AND

01:30:20.815 --> 01:30:22.617
IF YOU'RE NOT ABLE TO DO THAT,

01:30:22.683 --> 01:30:24.552
THAT'S FAIR, I GET IT. I KNOW

01:30:24.619 --> 01:30:25.653
THERE'S A NEW YORK TIMES

01:30:25.720 --> 01:30:27.455
ARTICLE THAT DID DISCUSS IT. I

01:30:27.522 --> 01:30:28.656
JUST DON'T HAVE IT ON THE TIP

01:30:28.723 --> 01:30:30.591
OF MY TONGUE RIGHT NOW. BUT I

01:30:30.658 --> 01:30:32.560
WILL SAY ONE THING THAT WAS NOT

01:30:32.627 --> 01:30:33.928
TOUCHED ON IS THAT SUBROGATION,

01:30:33.995 --> 01:30:35.396
AND PERHAPS THE RECOVERY THAT

01:30:35.463 --> 01:30:37.665
INSURANCE COMPANIES GET MIGHT

01:30:37.732 --> 01:30:39.400
BRING DOWN OUR RATES A BIT,

01:30:39.467 --> 01:30:41.302
BECAUSE IT RESTRICTS OR LIMITS

01:30:41.369 --> 01:30:43.004
THEIR EXPOSURE. SO THAT IS

01:30:43.070 --> 01:30:44.238
PROBABLY ONE THING WE DIDN'T

01:30:44.305 --> 01:30:45.673
TOUCH. AND I THINK THE CHAIR OF

01:30:45.740 --> 01:30:47.308
THE INSURANCE COMMITTEE IS OVER

01:30:47.375 --> 01:30:48.342
THERE GOING TO TELL US

01:30:48.409 --> 01:30:49.477
SOMETHING ABOUT THAT. THANK YOU.

01:30:49.544 --> 01:30:52.246
ALL RIGHT, CHAIR CALDERON THANK

01:30:52.313 --> 01:30:54.782
YOU, MADAM CHAIR. ACTUALLY, I

01:30:54.849 --> 01:30:57.585
WANT TO FOLLOW UP ON A QUESTION.

01:30:57.652 --> 01:31:00.488
ASSEMBLYWOMAN PAPAN ASKED FOR A

01:31:00.555 --> 01:31:03.024
COMMENT. IF YOU KNOW, DO YOU

01:31:03.090 --> 01:31:05.459
KNOW HOW MUCH OF SUBROGATION

01:31:05.526 --> 01:31:06.627
RECOVERIES GO TOWARDS LEGAL

01:31:06.694 --> 01:31:09.130
FEES AND THIRD PARTY COSTS, OR

01:31:09.197 --> 01:31:10.965
DO YOU HAVE A GENERAL IDEA? BY

01:31:11.032 --> 01:31:12.667
THIRD PARTIES YOU MEAN EXPERTS

01:31:12.733 --> 01:31:14.869
AND WHAT HAVE YOU? HEDGE FUNDS?

01:31:14.936 --> 01:31:17.004
OH GOSH, I DON'T I DON'T DEAL

01:31:17.071 --> 01:31:18.840
WITH THEM PURPOSEFULLY. HOW

01:31:18.906 --> 01:31:21.776
ABOUT ATTORNEYS FEES? OUR FEES

01:31:21.843 --> 01:31:24.946
ARE SET BY OUR CLIENTS AND

01:31:25.012 --> 01:31:27.815
THEY'RE THEY'RE VARIABLE AND

01:31:27.882 --> 01:31:29.650
RANGE CATASTROPHIC LOSS

01:31:29.717 --> 01:31:33.588
SCENARIOS. I'M A LITTLE

01:31:33.654 --> 01:31:35.056
RELUCTANT BECAUSE OF ATTORNEY

01:31:35.122 --> 01:31:37.225
CLIENT PRIVILEGE. THAT'S NOT MY

01:31:37.291 --> 01:31:40.761
PRIVILEGE TO DIVULGE WHAT A FEE

01:31:40.828 --> 01:31:44.065
SCALE IS. BUT I WOULD SAY I

01:31:44.131 --> 01:31:45.800
READ SOMETHING SOMEWHERE WHERE

01:31:45.867 --> 01:31:47.368
THERE WAS AN ESTIMATE OF

01:31:47.435 --> 01:31:49.437
SOMEWHERE AROUND 20% FOR LEGAL

01:31:49.503 --> 01:31:50.671
FEES IN SUBROGATION MATTERS.

01:31:50.738 --> 01:31:54.141
AND THAT IS EXTRAORDINARILY

01:31:54.208 --> 01:32:00.181
HIGH. OKAY. AND IF YOU KNOW,

01:32:00.248 --> 01:32:02.183
HOW DOES A SUBROGATION INTERACT

01:32:02.250 --> 01:32:03.918
WITH THE WILDFIRE FUND AND DOES

01:32:03.985 --> 01:32:05.620
A FUND CREATE UNINTENDED

01:32:05.686 --> 01:32:07.021
CONSEQUENCES FOR LARGER

01:32:07.088 --> 01:32:12.159
SETTLEMENTS? SEGREGATION IN THE

01:32:12.226 --> 01:32:14.295
CONTEXT OF WILDFIRE FUND? I

01:32:14.362 --> 01:32:17.198
MEAN, THE FUND IS ESTABLISHED.

01:32:17.265 --> 01:32:20.234
WHAT A SEPARATE RESOLUTION

01:32:20.301 --> 01:32:23.237
WOULD DO WOULD OBVIOUSLY WOULD

01:32:23.304 --> 01:32:26.173
PLAY INTO AN ELEMENT OF

01:32:26.240 --> 01:32:27.942
DISTRIBUTION UNDER THE FUND.

01:32:28.009 --> 01:32:30.544
BUT I'VE NOT SEEN ANY SCENARIO

01:32:30.611 --> 01:32:32.313
IN ANY FIRE, INCLUDING THE MOST

01:32:32.380 --> 01:32:33.748
RECENT ONES AND THE ONES WE'RE

01:32:33.814 --> 01:32:34.815
INVOLVED IN LITIGATION TODAY,

01:32:34.882 --> 01:32:36.984
INCLUDING EATON, WHERE THAT

01:32:37.051 --> 01:32:39.487
FUND, FIRST OF ALL, THE NUMBERS

01:32:39.553 --> 01:32:40.922
THAT ARE PROJECTED FOR

01:32:40.988 --> 01:32:42.323
SUBROGATION ARE GENERALLY

01:32:42.390 --> 01:32:44.091
SPEAKING IN IN THE MEDIA ARE

01:32:44.158 --> 01:32:48.162
NOT ACCURATE. THEY'RE INFLATED.

01:32:48.229 --> 01:32:50.965
BUT THE FUND, THE FUND HAS

01:32:51.032 --> 01:32:54.235
AMPLE RESERVE IN THAT FUND TO

01:32:54.302 --> 01:32:57.438
RESOLVE SUBROGATION MATTERS,

01:32:57.505 --> 01:32:59.607
INDIVIDUAL MATTERS, GOVERNMENT

01:32:59.674 --> 01:33:01.375
CLAIMS, AND STILL HAVE A

01:33:01.442 --> 01:33:02.877
SURPLUS LEFT OVER. FROM MY

01:33:02.944 --> 01:33:05.346
PERSONAL PERSPECTIVE AND SEEING

01:33:05.413 --> 01:33:07.648
WHAT THE FUND IS. OKAY. THANK

01:33:07.715 --> 01:33:10.785
YOU. ALL RIGHT. SEEING NO

01:33:10.851 --> 01:33:12.620
ADDITIONAL QUESTIONS FOR MR.

01:33:12.687 --> 01:33:13.754
GRÖNEFELD. THANK YOU SO MUCH

01:33:13.821 --> 01:33:14.989
FOR JOINING US. WE APPRECIATE

01:33:15.056 --> 01:33:16.691
YOU BEING HERE. THANK YOU. I'LL

01:33:16.757 --> 01:33:17.758
PRESS MY LITTLE BUTTON HERE.

01:33:17.825 --> 01:33:18.926
ALL RIGHT. THANK YOU. ALL RIGHT.

01:33:18.993 --> 01:33:20.661
WE'LL TURN TO THE SECOND

01:33:20.728 --> 01:33:22.997
PORTION OF THE HEARING. AND

01:33:23.064 --> 01:33:25.199
YOU'RE. SIR, YOU'RE FREE TO GO.

01:33:25.266 --> 01:33:30.571
THANK YOU SO MUCH. ALL RIGHT.

01:33:30.638 --> 01:33:34.942
OKAY. WE ARE NOW TURNING TO OUR

01:33:35.009 --> 01:33:38.112
THE SECOND PART OF OUR PANEL,

01:33:38.179 --> 01:33:42.049
AND WE ARE JOINED BY MICHAEL

01:33:42.116 --> 01:33:44.952
GUERRA AND NANCY WATKINS, WHO

01:33:45.019 --> 01:33:48.956
ARE GOING TO BE PROVIDING US

01:33:49.023 --> 01:33:51.459
WITH AN OVERVIEW ON HOW

01:33:51.525 --> 01:33:53.661
POTENTIAL CHANGES TO THE STATUS

01:33:53.728 --> 01:33:56.897
QUO SUBROGATION PROCESS MIGHT

01:33:56.964 --> 01:33:58.165
IMPACT CALIFORNIA RATEPAYERS

01:33:58.232 --> 01:34:00.101
AND CALIFORNIA HOME INSURANCE

01:34:00.167 --> 01:34:02.603
POLICYHOLDERS. SO THANK YOU

01:34:02.670 --> 01:34:03.704
BOTH FOR BEING HERE. I THINK

01:34:03.771 --> 01:34:04.805
WE'RE BEGINNING, MISS WATKINS

01:34:04.872 --> 01:34:09.810
WITH YOU. THANK YOU. I HAVE ONE

01:34:09.877 --> 01:34:14.148
SLIDE WITH NUMBERS ON IT. SO I

01:34:14.215 --> 01:34:15.216
APPRECIATE YOU ALL HAVING ME

01:34:15.282 --> 01:34:18.486
TODAY. I'M A AN ACTUARY AND A

01:34:18.552 --> 01:34:21.022
PRINCIPAL WITH MILLIMAN, AN

01:34:21.088 --> 01:34:22.790
INDEPENDENT CONSULTING FIRM

01:34:22.857 --> 01:34:24.959
LOCATED OUR OUR OFFICE IS

01:34:25.026 --> 01:34:28.562
LOCATED IN SAN FRANCISCO.

01:34:28.629 --> 01:34:30.331
PERSONALLY, I'M A SPECIALIST IN

01:34:30.398 --> 01:34:31.632
PROPERTY INSURANCE AVAILABILITY

01:34:31.699 --> 01:34:33.901
AND AFFORDABILITY. I CONSIDER

01:34:33.968 --> 01:34:36.437
MYSELF A RISK PLANNER. I WORK

01:34:36.504 --> 01:34:38.672
FOR THE INSURANCE INDUSTRY, THE

01:34:38.739 --> 01:34:41.509
TRADES. I'M WORKING FOR A

01:34:41.575 --> 01:34:42.943
UTILITY RIGHT NOW ON ON

01:34:43.010 --> 01:34:45.146
WILDFIRE MITIGATION. I WORK FOR

01:34:45.212 --> 01:34:47.882
THE BUILDERS ASSOCIATION. SO

01:34:47.948 --> 01:34:49.417
PRETTY MUCH IN THE MIDDLE OF,

01:34:49.483 --> 01:34:51.218
OF ALL THESE PARTIES THAT ARE

01:34:51.285 --> 01:34:53.054
FLOWING AROUND HERE, MOST

01:34:53.120 --> 01:34:54.422
RECENTLY Þ. AND WE WORK FOR THE,

01:34:54.488 --> 01:34:56.290
THE CDI AS WELL AND THEIR

01:34:56.357 --> 01:34:58.459
SUSTAINABLE INSURANCE STRATEGY.

01:34:58.526 --> 01:35:01.629
I PERFORMED AN ANALYSIS ON

01:35:01.695 --> 01:35:03.764
BEHALF OF THE CALIFORNIA

01:35:03.831 --> 01:35:05.633
NATURAL RESOURCES AGENCY IN THE

01:35:05.699 --> 01:35:07.435
CALIFORNIA GOVERNOR'S OFFICE IN

01:35:07.501 --> 01:35:10.671
AUGUST OF THIS YEAR ON UTILITY

01:35:10.738 --> 01:35:13.908
SUBROGATION THAT I'M NOT

01:35:13.974 --> 01:35:14.942
REPRESENTING THEM HERE TODAY.

01:35:15.009 --> 01:35:16.444
I'M REPRESENTING JUST MYSELF.

01:35:16.510 --> 01:35:18.179
MY. MY COMMENTS ARE JUST MINE,

01:35:18.245 --> 01:35:19.647
BUT THEY DID GIVE ME PERMISSION

01:35:19.713 --> 01:35:21.782
TO SHARE NUMBERS FROM THAT

01:35:21.849 --> 01:35:23.617
STUDY THAT HELPED ANSWER THE

01:35:23.684 --> 01:35:25.119
QUESTIONS THAT YOU ALL ASKED ME

01:35:25.186 --> 01:35:27.588
TO ADDRESS TODAY. SO THE THREE

01:35:27.655 --> 01:35:28.789
QUESTIONS THAT I WAS ASKED WERE

01:35:28.856 --> 01:35:31.492
TO, TO, OR THE QUESTION WAS TO

01:35:31.559 --> 01:35:33.327
SPEAK ABOUT THREE SCENARIOS AND

01:35:33.394 --> 01:35:34.795
THEIR IMPACTS ON CALIFORNIA

01:35:34.862 --> 01:35:36.697
INSURANCE POLICYHOLDERS. NUMBER

01:35:36.764 --> 01:35:38.732
ONE SCENARIO, ELIMINATING

01:35:38.799 --> 01:35:40.167
SUBROGATION FOR UTILITIES.

01:35:40.234 --> 01:35:41.969
NUMBER TWO, CAPPING SUBROGATION

01:35:42.036 --> 01:35:43.771
RECOVERIES AT 50%. AND NUMBER

01:35:43.838 --> 01:35:46.607
THREE, STATUS QUO. DO YOU ALL

01:35:46.674 --> 01:35:48.542
HAVE MY POWERPOINT SLIDES? OKAY,

01:35:48.609 --> 01:35:51.112
I SEE IT. OKAY. PEOPLE SHOULD

01:35:51.178 --> 01:35:52.713
HAVE A HARD COPY OF THIS SLIDE

01:35:52.780 --> 01:35:55.616
SO YOU CAN SEE THE NUMBERS,

01:35:55.683 --> 01:36:00.721
RIGHT? AND I ALSO ASKED THE CNA

01:36:00.788 --> 01:36:02.823
TO ALLOW ME TO PROVIDE THE

01:36:02.890 --> 01:36:04.258
LEGISLATIVE BRIEFING PACKAGE

01:36:04.325 --> 01:36:06.093
THAT I PUT TOGETHER FOR THEM IN

01:36:06.160 --> 01:36:07.895
AUGUST. AND THAT'S PART OF THE

01:36:07.962 --> 01:36:09.363
MATERIALS FOR THIS. SO IT'S GOT

01:36:09.430 --> 01:36:12.900
MORE DETAIL THAN THIS ONE SLIDE.

01:36:12.967 --> 01:36:14.902
SO WHAT WE WERE ASKED TO DO IS

01:36:14.969 --> 01:36:17.271
ESTIMATING HOW REMOVING

01:36:17.338 --> 01:36:19.039
SUBROGATION RECOVERIES AGAINST

01:36:19.106 --> 01:36:20.074
UTILITIES WOULD AFFECT THE

01:36:20.141 --> 01:36:21.976
CALIFORNIA HOMEOWNERS INSURANCE

01:36:22.042 --> 01:36:25.179
INDUSTRY. AND WE EXPRESSED THAT

01:36:25.246 --> 01:36:27.681
IMPACT AS THE PERCENTAGE OF

01:36:27.748 --> 01:36:29.483
TOTAL STATEWIDE HOMEOWNERS

01:36:29.550 --> 01:36:31.285
PREMIUM FOR OWNER OCCUPIED

01:36:31.352 --> 01:36:33.087
HOMES. SO THE CORE QUESTION WAS

01:36:33.154 --> 01:36:34.889
IF INSURERS CAN NO LONGER

01:36:34.955 --> 01:36:37.725
RECOVER SUBROGATION ON UTILITY

01:36:37.791 --> 01:36:39.560
RELATED WILDFIRES, HOW MUCH

01:36:39.627 --> 01:36:41.729
MORE PREMIUM WOULD BE REQUIRED

01:36:41.795 --> 01:36:43.931
TO ACHIEVE ACTUARIALLY SOUND

01:36:43.998 --> 01:36:46.400
RATES? ALL ELSE EQUAL? SO THE

01:36:46.467 --> 01:36:48.869
POSING THAT SPECIFIC QUESTION,

01:36:48.936 --> 01:36:49.970
THAT'S THE CONTEXT FOR THE

01:36:50.037 --> 01:36:51.739
NUMBERS THAT I'M GOING TO GIVE

01:36:51.805 --> 01:36:53.274
YOU TODAY. WHEN WE TRIED TO

01:36:53.340 --> 01:36:54.642
ANSWER THE QUESTION, WE USED

01:36:54.708 --> 01:36:55.743
TWO DIFFERENT METHODS, WHICH

01:36:55.809 --> 01:36:57.578
I'LL I'LL GO INTO MORE DETAIL

01:36:57.645 --> 01:36:59.346
ABOUT WHAT THEY ARE, BUT ONE IS

01:36:59.413 --> 01:37:01.148
A BOTTOM UP APPROACH THAT'S

01:37:01.215 --> 01:37:03.284
BASED ON HISTORICAL FIRE AND

01:37:03.350 --> 01:37:05.119
SUBROGATION DATA, AND THEN A

01:37:05.186 --> 01:37:07.321
TOP DOWN APPROACH BASED ON DATA

01:37:07.388 --> 01:37:10.524
FROM CALIFORNIA RATE FILINGS.

01:37:10.591 --> 01:37:11.892
WE. WITHIN EACH OF THOSE

01:37:11.959 --> 01:37:13.761
APPROACHES, WE. WE MODELED

01:37:13.827 --> 01:37:16.263
THREE DIFFERENT SCENARIOS USING

01:37:16.330 --> 01:37:17.731
REASONABLE ALTERNATIVE

01:37:17.798 --> 01:37:19.166
ASSUMPTIONS FOR THE INDUSTRY AS

01:37:19.233 --> 01:37:21.302
A WHOLE. NOW OUR ANSWERS ARE

01:37:21.368 --> 01:37:23.237
ALL EXPRESSED ON AVERAGE FOR

01:37:23.304 --> 01:37:24.872
THE CALIFORNIA INDUSTRY AS A

01:37:24.939 --> 01:37:26.373
WHOLE. AND WHEN YOU WHEN YOU

01:37:26.440 --> 01:37:27.808
HEAR THESE NUMBERS, YOU SHOULD

01:37:27.875 --> 01:37:29.944
JUST KEEP IN MIND INDIVIDUAL

01:37:30.010 --> 01:37:31.812
INSURER RESULTS ARE GOING TO BE

01:37:31.879 --> 01:37:34.982
OUTSIDE THIS RANGE. A COMPANY

01:37:35.049 --> 01:37:37.518
THAT IS HEAVILY EXPOSED IN

01:37:37.585 --> 01:37:39.353
WILDFIRE AREAS IN CALIFORNIA

01:37:39.420 --> 01:37:40.888
WILL BE HIGHER THAN OUR RANGE,

01:37:40.955 --> 01:37:42.923
AND A COMPANY THAT'S LESS

01:37:42.990 --> 01:37:44.458
EXPOSED WILL BE LOWER THAN OUR

01:37:44.525 --> 01:37:45.593
RANGE. SO KEEP THAT IN MIND.

01:37:45.659 --> 01:37:47.595
THIS IS ALL OF MY NUMBERS THAT

01:37:47.661 --> 01:37:48.729
I'M SHOWING YOU ARE AVERAGES.

01:37:48.796 --> 01:37:50.431
SO THE RESULTS ARE SHOWN ON

01:37:50.497 --> 01:37:53.367
THIS SLIDE THAT YOU SEE. AND

01:37:53.434 --> 01:37:56.237
AND THE BARS IN THE GRAPH

01:37:56.303 --> 01:37:58.806
REPRESENT THE RANGES OF THE

01:37:58.872 --> 01:38:00.207
ESTIMATES OF ELIMINATING

01:38:00.274 --> 01:38:01.609
SUBBAROW ENTIRELY. SO THAT'S

01:38:01.675 --> 01:38:03.077
SHIFTING THE COST FROM THE

01:38:03.143 --> 01:38:04.912
UTILITIES AND THEIR CUSTOMERS

01:38:04.979 --> 01:38:06.347
TO INSURANCE COMPANIES AND

01:38:06.413 --> 01:38:08.482
THEIR POLICYHOLDERS. FOR THE

01:38:08.549 --> 01:38:11.385
MEDIUM SCENARIO, THAT WOULD

01:38:11.452 --> 01:38:15.322
RESULT IN 10 OR 11% ESTIMATED

01:38:15.389 --> 01:38:17.191
INCREASE IN TOTAL STATEWIDE

01:38:17.258 --> 01:38:21.462
HOMEOWNERS PREMIUMS, THE 10%,

01:38:21.528 --> 01:38:23.597
BASED ON THE TOP DOWN METHOD

01:38:23.664 --> 01:38:32.172
AND 11% ON THE BOTTOM UP METHOD.

01:38:32.239 --> 01:38:35.042
BUT THIS IS FOR THE HOMEOWNERS.

01:38:35.109 --> 01:38:36.844
TAKE ALL OF THE IMPACT. IT

01:38:36.910 --> 01:38:38.612
WOULDN'T MAKE SENSE FOR THIS

01:38:38.679 --> 01:38:41.415
IMPACT TO FLOW THROUGH THEFT

01:38:41.482 --> 01:38:43.484
PREMIUMS OR WATER LEAK PREMIUMS

01:38:43.550 --> 01:38:45.486
OR ANYTHING LIKE THAT. SO IF

01:38:45.552 --> 01:38:46.587
WE'RE IF WE'RE TALKING ABOUT

01:38:46.654 --> 01:38:49.456
THE IMPACT ON WILDFIRE PREMIUMS

01:38:49.523 --> 01:38:51.625
ONLY, THAT WOULD BE HIGHER. AND

01:38:51.692 --> 01:38:53.661
THAT WOULD BE LIKE 3 OR 4 TIMES

01:38:53.727 --> 01:38:54.928
THESE AMOUNTS. SO KEEP IN MIND,

01:38:54.995 --> 01:38:56.664
THIS IS NOT A PEANUT BUTTER

01:38:56.730 --> 01:38:58.799
SPREAD KIND OF SITUATION WHERE

01:38:58.866 --> 01:39:00.200
EVERYBODY IN CALIFORNIA GETS A

01:39:00.267 --> 01:39:02.069
10% RATE INCREASE. IT WOULD

01:39:02.136 --> 01:39:04.905
WORK THAT POLICIES THAT HAVE

01:39:04.972 --> 01:39:06.674
VERY, VERY LOW WILDFIRE

01:39:06.740 --> 01:39:09.176
EXPOSURE WOULD HAVE ZERO RATE

01:39:09.243 --> 01:39:11.011
INCREASE OR SOMETHING CLOSE TO

01:39:11.078 --> 01:39:14.281
ZERO. AND HIGHER WOULD WOULD

01:39:14.348 --> 01:39:17.184
HAVE A SOME, SOME NUMBER THAT'S

01:39:17.251 --> 01:39:20.020
3 OR 4. THAT'S THAT'S THAT'S IN

01:39:20.087 --> 01:39:22.523
BETWEEN. IT'S A WEIGHTED

01:39:22.589 --> 01:39:23.924
AVERAGE OF ZERO AND THEN

01:39:23.991 --> 01:39:26.860
PROBABLY 30 OR 40%. SO JUST

01:39:26.927 --> 01:39:28.329
KEEP THAT IN MIND WHEN YOU'RE

01:39:28.395 --> 01:39:29.663
THINKING ABOUT, YOU GUYS HAVE

01:39:29.730 --> 01:39:31.165
TO THINK ABOUT IMPACT ON

01:39:31.231 --> 01:39:32.299
CONSUMERS AND PLEASE KEEP THAT

01:39:32.366 --> 01:39:34.835
IN MIND. SO STARTING WITH THE

01:39:34.902 --> 01:39:37.338
BOTTOM UP METHOD, WHAT IS THAT?

01:39:37.404 --> 01:39:39.106
IT'S WE START WITH UTILITY

01:39:39.173 --> 01:39:42.409
RELATED WILDFIRE DAMAGE

01:39:42.476 --> 01:39:45.245
ESTIMATES FROM CAL FIRE. WE WE

01:39:45.312 --> 01:39:46.747
LOOKED AT THE LARGE FIRE LIST

01:39:46.814 --> 01:39:49.917
FROM CAL FIRE FROM 2010 TO 2025

01:39:49.983 --> 01:39:52.886
FOR FIRES OVER 300 ACRES. AND

01:39:52.953 --> 01:39:53.987
OVER THAT TIME, THERE WERE

01:39:54.054 --> 01:39:56.156
ABOUT 80,000 STRUCTURES DAMAGED

01:39:56.223 --> 01:39:59.927
OR DESTROYED FROM THESE FIRES,

01:39:59.993 --> 01:40:03.530
ABOUT 70 OF WHICH WERE UTILITY

01:40:03.597 --> 01:40:06.500
RELATED. SO WE WE USED THAT TO,

01:40:06.567 --> 01:40:08.268
TO FIGURE OUT LIKE WHAT

01:40:08.335 --> 01:40:10.738
PERCENTAGE OF STRUCTURES

01:40:10.804 --> 01:40:12.206
GETTING DAMAGED COME FROM

01:40:12.272 --> 01:40:13.674
UTILITY COST WILDFIRES. AND

01:40:13.741 --> 01:40:16.543
THEN WE ALSO LOOKED AT PUBLICLY

01:40:16.610 --> 01:40:21.215
AVAILABLE DATA THAT, WELL, SO

01:40:21.281 --> 01:40:22.349
SO THAT PERCENTAGE, I'LL JUST

01:40:22.416 --> 01:40:24.051
SHOW YOU THAT DOWN AT THE

01:40:24.118 --> 01:40:25.886
BOTTOM, WE'VE GOT LIKE THE KEY

01:40:25.953 --> 01:40:28.422
ASSUMPTIONS THAT THAT AMOUNT

01:40:28.489 --> 01:40:29.590
VARIES FROM YEAR TO YEAR. SO

01:40:29.656 --> 01:40:31.492
IT'S, IT COULD BE 20% IN ONE

01:40:31.558 --> 01:40:33.761
YEAR OR 90% IN ANOTHER YEAR. A

01:40:33.827 --> 01:40:36.330
FEW FIRES LARGELY SWING THE

01:40:36.397 --> 01:40:37.765
NUMBERS. SO WHAT WE CAME OUT

01:40:37.831 --> 01:40:39.400
WITH IS A MEDIUM ESTIMATE OF

01:40:39.466 --> 01:40:41.802
ABOUT 50% OF, OF ALL HOME

01:40:41.869 --> 01:40:43.303
DAMAGE FROM LARGE FIRES IS

01:40:43.370 --> 01:40:44.938
COMING FROM UTILITY COST

01:40:45.005 --> 01:40:46.039
WILDFIRES. AND YOU PROBABLY

01:40:46.106 --> 01:40:47.508
HAVE HEARD A NUMBER, LIKE ABOUT

01:40:47.574 --> 01:40:49.276
HALF OF ALL FIRES ARE FROM

01:40:49.343 --> 01:40:50.711
UTILITIES. SO WE'RE CLOSE TO

01:40:50.778 --> 01:40:52.246
THAT. AND THEN OUR RANGE WAS

01:40:52.312 --> 01:40:56.450
LOW OF 45% AND HIGH OF 65%. SO

01:40:56.517 --> 01:40:57.985
THAT'S STARTING WITH WHICH OF

01:40:58.051 --> 01:41:00.154
THE DOLLARS FROM INSURANCE ARE

01:41:00.220 --> 01:41:01.922
GOING TO UTILITIES IN THE FIRST

01:41:01.989 --> 01:41:03.357
PLACE. AND THEN THE QUESTION IS,

01:41:03.424 --> 01:41:05.159
WHAT'S THE PERCENTAGE THAT WE

01:41:05.225 --> 01:41:07.261
GET THROUGH SUBROGATION AGAINST

01:41:07.327 --> 01:41:09.863
THE UTILITIES? AND THAT'S NOT

01:41:09.930 --> 01:41:11.265
100%. YOU JUST ESTABLISHED THAT

01:41:11.331 --> 01:41:14.134
IN THE PRIOR TESTIMONY. THE

01:41:14.201 --> 01:41:16.270
VALUE OF SUBROGATION IS WHAT

01:41:16.336 --> 01:41:17.471
INSURERS ARE WILLING AND ABLE

01:41:17.538 --> 01:41:19.840
TO SETTLE FOR. THEY WOULD LIKE

01:41:19.907 --> 01:41:21.675
TO GET 100%, BUT THEY NEVER DO.

01:41:21.742 --> 01:41:23.844
YOU ALREADY HEARD THAT. SO

01:41:23.911 --> 01:41:26.346
THAT'S GOING TO BE IMPACTED BY

01:41:26.413 --> 01:41:28.549
MANY THINGS. BUT A LOT OF IT IS

01:41:28.615 --> 01:41:30.017
CONFIDENCE ABOUT THE TIMING AND

01:41:30.083 --> 01:41:31.752
THE AMOUNT OF RECOVERIES FROM

01:41:31.819 --> 01:41:35.456
UTILITIES. SO THE HIGH OF 70%

01:41:35.522 --> 01:41:38.258
THAT WE ASSUMED IS THE MOST

01:41:38.325 --> 01:41:40.394
REASONABLE IS A REASONABLE

01:41:40.461 --> 01:41:41.862
NUMBER. IN A SITUATION WHERE

01:41:41.929 --> 01:41:43.630
THERE'S A STABLE SOURCE OF

01:41:43.697 --> 01:41:45.065
FUNDING, WHERE THERE'S A

01:41:45.132 --> 01:41:46.166
CREDITWORTHY SOURCE OF

01:41:46.233 --> 01:41:47.601
COLLECTING FROM UTILITIES

01:41:47.668 --> 01:41:50.137
INDUSTRY, THAT'S THAT'S WHERE

01:41:50.204 --> 01:41:52.339
WE'VE BEEN WITH THE CEA

01:41:52.406 --> 01:41:53.440
WILDFIRE FUND ESTABLISHED IN

01:41:53.507 --> 01:41:56.310
RECENT YEARS. THE LOW OF 40% IS

01:41:56.376 --> 01:41:58.445
MORE LIKE A DISCOUNTED VALUE,

01:41:58.512 --> 01:42:00.180
WHERE IT'S THAT'S A MORE

01:42:00.247 --> 01:42:01.482
REASONABLE NUMBER IN SITUATIONS

01:42:01.548 --> 01:42:02.716
WHERE THE TIMING AND THE AMOUNT

01:42:02.783 --> 01:42:04.952
OF RECOVERIES IS UNCERTAIN. AND

01:42:05.018 --> 01:42:07.788
THEN THE MEDIUM OF 55% IS THE

01:42:07.855 --> 01:42:09.957
LONG TERM AVERAGE. AND THAT'S

01:42:10.023 --> 01:42:12.826
CLOSER TO WHAT WE'VE, WE'VE

01:42:12.893 --> 01:42:16.063
SEEN OVER THIS TIME PERIOD. AND

01:42:16.129 --> 01:42:17.097
YOU SHOULD PROBABLY THINK OF

01:42:17.164 --> 01:42:18.565
THAT AS MORE LIKE WHAT'S

01:42:18.632 --> 01:42:19.633
CURRENTLY REFLECTED IN

01:42:19.700 --> 01:42:20.767
INSURANCE PREMIUMS, BECAUSE

01:42:20.834 --> 01:42:22.135
THAT'S WHAT'S SHOWING UP IN THE

01:42:22.202 --> 01:42:28.642
DOLLARS. SO WE START WITH SO SO

01:42:28.709 --> 01:42:30.811
THAT'S, THAT'S HOW WE GOT OUR

01:42:30.878 --> 01:42:31.845
ANSWERS FROM THE BOTTOM UP

01:42:31.912 --> 01:42:33.313
METHOD. THOSE ARE THE MOST

01:42:33.380 --> 01:42:34.715
IMPORTANT ASSUMPTIONS IN OUR

01:42:34.781 --> 01:42:37.017
BOTTOM UP METHODS. I WILL SAY

01:42:37.084 --> 01:42:39.386
THE PERCENTAGES, THERE'S NOT A

01:42:39.453 --> 01:42:41.255
LOT OF PUBLICLY AVAILABLE

01:42:41.321 --> 01:42:43.090
INFORMATION ON WHAT SETTLEMENTS

01:42:43.156 --> 01:42:44.992
ARE. THERE'S NO WAY FOR ANYONE,

01:42:45.058 --> 01:42:46.760
I THINK, IN THIS ROOM TO FIGURE

01:42:46.827 --> 01:42:48.795
OUT WHAT THE REAL NUMBERS ARE

01:42:48.862 --> 01:42:51.665
ON EVERY SINGLE SUBROGATION

01:42:51.732 --> 01:42:53.967
THAT'S HAPPENED. SO WE'RE WE'VE

01:42:54.034 --> 01:42:55.335
PULLED TOGETHER THE INFORMATION

01:42:55.402 --> 01:42:56.904
THAT WE HAD, AND WE TRIED TO

01:42:56.970 --> 01:42:58.505
TIE IT OUT USING THE DATA THAT

01:42:58.572 --> 01:43:01.441
WE HAVE WHEN WE GO TO THE TOP

01:43:01.508 --> 01:43:03.343
DOWN METHOD THAT STARTS WITH

01:43:03.410 --> 01:43:06.780
THE HISTORICAL SUBROGATION AND

01:43:06.847 --> 01:43:08.315
SALVAGE, IT'S ABBREVIATED S AND

01:43:08.382 --> 01:43:10.751
S. IF YOU EVER SEE THAT IT'S

01:43:10.817 --> 01:43:12.252
MOSTLY SUBROGATION IN

01:43:12.319 --> 01:43:13.287
CALIFORNIA. SO YOU CAN JUST

01:43:13.353 --> 01:43:15.422
LEAVE SALVAGE OUT AND JUST

01:43:15.489 --> 01:43:17.224
ASSUME THESE DOLLARS ARE

01:43:17.291 --> 01:43:19.493
SHOWING UP IN RATE FILINGS THAT

01:43:19.560 --> 01:43:21.929
THAT INSURANCE COMPANIES ARE

01:43:21.995 --> 01:43:24.464
PROVIDING TO THE C, D I. SO WE

01:43:24.531 --> 01:43:27.367
START WITH THOSE AMOUNTS. WE WE

01:43:27.434 --> 01:43:30.337
PULLED FILINGS FOR THE, FOR THE,

01:43:30.404 --> 01:43:32.306
FOR THE TOP CALIFORNIA INSURERS.

01:43:32.372 --> 01:43:35.642
WE, WE, WE'VE GOT 12 INSURERS

01:43:35.709 --> 01:43:37.477
REPRESENTING ABOUT 63% MARKET

01:43:37.544 --> 01:43:39.546
SHARE IN CALIFORNIA. PLUS WE

01:43:39.613 --> 01:43:40.647
PULLED A FILING FOR THE

01:43:40.714 --> 01:43:42.115
CALIFORNIA FAIR PLAN. SO WE'VE

01:43:42.182 --> 01:43:43.717
GOT THE MOST RECENT FILING FOR

01:43:43.784 --> 01:43:46.386
THESE 13 ENTITIES, NINE OF

01:43:46.453 --> 01:43:47.788
WHICH WERE SUBMITTED UNDER THE

01:43:47.854 --> 01:43:50.757
NEW SYSTEM REGULATIONS. AND

01:43:50.824 --> 01:43:53.961
THEN THE REST WERE WERE UNDER

01:43:54.027 --> 01:43:58.432
THE OLD RULES. SO WE USED THOSE

01:43:58.498 --> 01:44:01.168
TO COME OUT WITH THE KEY

01:44:01.234 --> 01:44:02.603
ASSUMPTION THAT'S SHOWN ON THE

01:44:02.669 --> 01:44:04.805
SLIDE OF SUBROGATION AND

01:44:04.871 --> 01:44:06.673
SALVAGE, PERCENTAGE OF WILDFIRE

01:44:06.740 --> 01:44:08.775
AND FIRE FOLLOWING EARTHQUAKE

01:44:08.842 --> 01:44:11.979
LOSSES. OUR LOW IS 20%, OUR

01:44:12.045 --> 01:44:15.616
MEDIUM IS 26% AND OUR HIGH IS

01:44:15.682 --> 01:44:17.718
28%. SO WHAT WE'RE SEEING FROM

01:44:17.784 --> 01:44:19.152
THE INSURANCE COMPANY RATE

01:44:19.219 --> 01:44:21.088
FILINGS IS OVER A LONG PERIOD

01:44:21.154 --> 01:44:24.958
OF TIME. THE THE SUBROGATION IS

01:44:25.025 --> 01:44:27.861
PAYING FOR ABOUT A QUARTER OF

01:44:27.928 --> 01:44:30.731
SOMEWHERE BETWEEN 20 AND 28% OF

01:44:30.797 --> 01:44:31.865
WILDFIRE AND FIRE FOLLOWING

01:44:31.932 --> 01:44:32.966
EARTHQUAKE. AND, YOU KNOW, FIRE

01:44:33.033 --> 01:44:33.800
FOLLOWING EARTHQUAKE IS NOT

01:44:33.867 --> 01:44:35.636
GOING TO HAVE SUB SUBROGATION

01:44:35.702 --> 01:44:37.237
BECAUSE UTILITY IS NOT GOING TO

01:44:37.304 --> 01:44:39.039
CAUSE AN EARTHQUAKE. SO AND THE

01:44:39.106 --> 01:44:40.774
DOLLARS ARE VERY SMALL. SO

01:44:40.841 --> 01:44:41.842
ESSENTIALLY WHAT YOU'RE ASKING

01:44:41.908 --> 01:44:43.710
FOR IS WHAT THESE NUMBERS

01:44:43.777 --> 01:44:45.212
REPRESENT. SO IF WE COMPARE THE

01:44:45.278 --> 01:44:48.715
TWO METHODS, THE MOST CRITICAL

01:44:48.782 --> 01:44:50.150
ASSUMPTIONS ARE REALLY AROUND

01:44:50.217 --> 01:44:51.985
HOW MUCH IS SUB REPRESENTING OF

01:44:52.052 --> 01:44:54.821
THE WILDFIRE LOSSES AND THE

01:44:54.888 --> 01:44:56.590
BOTTOM UP METHOD. IT'S GOING

01:44:56.657 --> 01:45:00.227
FROM 17% TO 44%. AND THE TOP

01:45:00.293 --> 01:45:03.830
DOWN METHOD, IT'S GOING FROM

01:45:03.897 --> 01:45:07.401
20% TO 28%. SO SO THIS IS

01:45:07.467 --> 01:45:08.902
ESSENTIALLY SAYING THAT THE

01:45:08.969 --> 01:45:11.405
UTILITIES ARE BEARING SOMEWHERE

01:45:11.471 --> 01:45:13.540
AROUND A FIFTH TO A QUARTER,

01:45:13.607 --> 01:45:15.676
MAYBE EVEN A THIRD OF THE WAIT

01:45:15.742 --> 01:45:18.945
FOR WILDFIRE LOSSES. RIGHT NOW,

01:45:19.012 --> 01:45:23.550
THIS IS THINK ABOUT THE, THE

01:45:23.617 --> 01:45:26.086
SUBROGATION IS LIKE A CANE

01:45:26.153 --> 01:45:28.321
WHERE THE INSURANCE INDUSTRY IS

01:45:28.388 --> 01:45:30.857
LEANING ON THIS CANE AND, AND

01:45:30.924 --> 01:45:32.993
IT'S BEARING SOME WEIGHT IN THE

01:45:33.060 --> 01:45:34.494
PROCESS. AND SO YOUR QUESTION

01:45:34.561 --> 01:45:36.263
TO ME TODAY IS, WHAT HAPPENS IF

01:45:36.329 --> 01:45:37.664
THAT CANE GOES AWAY OR IF IT

01:45:37.731 --> 01:45:39.900
GETS SHORTER? SO THAT'S, THAT'S

01:45:39.966 --> 01:45:41.301
WHAT I'M TRYING TO ANSWER FOR

01:45:41.368 --> 01:45:44.237
YOU. THE PREMIUM IMPACT FROM

01:45:44.304 --> 01:45:47.908
THE BOTTOM UP METHOD IS BETWEEN

01:45:47.974 --> 01:45:49.876
5 AND 23%. THIS IS A WIDE RANGE

01:45:49.943 --> 01:45:51.678
BECAUSE IT REFLECTS WHAT COULD

01:45:51.745 --> 01:45:53.146
HAPPEN IF WE TURN THE DIALS,

01:45:53.213 --> 01:45:54.548
WHICH IS WHAT YOU ALL ARE

01:45:54.614 --> 01:45:56.717
CONSIDERING. ON WHAT'S DRIVING

01:45:56.783 --> 01:45:58.618
SUBROGATION RECOVERIES. THE TOP

01:45:58.685 --> 01:46:00.454
DOWN METHOD IS A TIGHTER RANGE.

01:46:00.520 --> 01:46:03.223
IT'S 6 TO 13% BECAUSE THAT'S

01:46:03.290 --> 01:46:05.692
MOSTLY REFLECTING OBSERVED

01:46:05.759 --> 01:46:07.494
VARIATION IN WHAT HAS HAPPENED

01:46:07.561 --> 01:46:11.264
OVER TIME IN THE PAST. SO THE

01:46:11.331 --> 01:46:12.599
IF YOU LOOK AT THE MEDIUM

01:46:12.666 --> 01:46:13.667
ESTIMATES FOR BOTH OF THOSE,

01:46:13.734 --> 01:46:16.870
IT'S LIKE 10 OR 11%. THOSE ARE

01:46:16.937 --> 01:46:19.706
CONSISTENT. SO SO THE GOING AT

01:46:19.773 --> 01:46:21.575
IT EITHER WAY, YOU CAN SORT OF

01:46:21.641 --> 01:46:22.976
UNDERSTAND WHAT HAS HAPPENED

01:46:23.043 --> 01:46:25.479
AND WHY IT'S HAPPENED AND WHAT

01:46:25.545 --> 01:46:28.381
MIGHT BE THE IMPACT IF YOU

01:46:28.448 --> 01:46:31.351
CHANGE YOUR DIALS. SO THAT'S,

01:46:31.418 --> 01:46:33.787
THAT'S THE ELIMINATING

01:46:33.854 --> 01:46:35.989
SUBROGATION KIND OF ANSWER TO

01:46:36.056 --> 01:46:38.225
YOUR QUESTION. YOU ALSO ASKED

01:46:38.291 --> 01:46:40.260
WHAT HAPPENS IF THERE'S A 50%

01:46:40.327 --> 01:46:42.462
CAP ON SUBROGATION. SO THAT CAN

01:46:42.529 --> 01:46:44.898
ONLY BE EVALUATED EXPLICITLY

01:46:44.965 --> 01:46:47.868
USING THE BOTTOM UP METHOD.

01:46:47.934 --> 01:46:49.269
BECAUSE IF WE LOOK AT RATE

01:46:49.336 --> 01:46:52.272
FILING DATA, WE DON'T HAVE ANY

01:46:52.339 --> 01:46:53.774
WAY OF RESTATING THE HISTORY OF

01:46:53.840 --> 01:46:56.476
OF SUBROGATION IF EVERYONE WAS

01:46:56.543 --> 01:47:00.413
CAPPED AT 50%. SO I SHOW THE

01:47:00.480 --> 01:47:01.481
RESULTS. IT'S REALLY HARD TO

01:47:01.548 --> 01:47:03.683
SEE ON THE SLIDE, BUT THE GREEN

01:47:03.750 --> 01:47:05.852
DOTS SHOWN ON THE BOTTOM UP,

01:47:05.919 --> 01:47:09.422
DARK BLUE BARS FROM THE I'M

01:47:09.489 --> 01:47:13.393
SORRY, THE TOP DOWN DARK. SORRY,

01:47:13.460 --> 01:47:16.630
I'M LOSING MY PLACE HERE. SO

01:47:16.696 --> 01:47:18.198
I'M ASSUMING THAT THE CAP,

01:47:18.265 --> 01:47:20.600
WHICH IS 50%, BECOMES THE DE

01:47:20.667 --> 01:47:23.136
FACTO AVERAGE. AND SO IN THE

01:47:23.203 --> 01:47:26.673
LOW SCENARIO, WE WE HAD AN

01:47:26.740 --> 01:47:28.475
AVERAGE SUBROGATION PERCENTAGE

01:47:28.542 --> 01:47:33.213
OF OF 45, I'M SORRY, 40%. SO

01:47:33.280 --> 01:47:34.614
THERE'S NO IMPACT OF PUTTING A

01:47:34.681 --> 01:47:38.251
CAP OF 50%. IN THE MEDIUM

01:47:38.318 --> 01:47:40.420
SCENARIO, WE ASSUMED THAT THE

01:47:40.487 --> 01:47:42.189
AVERAGE WAS 55, AND THAT DROPS

01:47:42.255 --> 01:47:44.724
DOWN TO 50. AND THE TOTAL

01:47:44.791 --> 01:47:46.193
IMPACT ON STATEWIDE PREMIUM IS

01:47:46.259 --> 01:47:51.231
ABOUT 1%. IN THE HIGH SCENARIO,

01:47:51.298 --> 01:47:53.834
WE ASSUMED 70%. SO IF THAT

01:47:53.900 --> 01:47:57.671
DROPS TO 50%, THE IMPACT IS 6%

01:47:57.737 --> 01:48:02.409
ON STATEWIDE PREMIUM. SO IT'S

01:48:02.475 --> 01:48:04.511
THAT'S I THINK IT'S PRETTY

01:48:04.578 --> 01:48:05.946
REASONABLE TO SAY THAT IF YOU

01:48:06.012 --> 01:48:07.781
IMPLEMENT A 50% CAP, THAT

01:48:07.848 --> 01:48:10.650
BECOMES THE NEW NORMAL. AND

01:48:10.717 --> 01:48:14.221
ALMOST EVERY IT'S GOING TO BE

01:48:14.287 --> 01:48:16.022
HARD TO GET A SETTLEMENT LESS

01:48:16.089 --> 01:48:19.359
THAN 50%. AND YOU WON'T BE

01:48:19.426 --> 01:48:20.527
ALLOWED TO GET A SETTLEMENT

01:48:20.594 --> 01:48:21.928
MORE THAN 50%. SO THAT'S,

01:48:21.995 --> 01:48:23.496
THAT'S WHAT WE ASSUMED WHEN WE

01:48:23.563 --> 01:48:25.765
CAME UP WITH THOSE NUMBERS. THE

01:48:25.832 --> 01:48:27.200
STATUS QUO IS AN INTERESTING

01:48:27.267 --> 01:48:28.301
QUESTION. LIKE YOU'D THINK THAT

01:48:28.368 --> 01:48:30.837
THE ANSWER WAS JUST ZERO, BUT I

01:48:30.904 --> 01:48:31.972
DON'T REALLY THINK THE ANSWER

01:48:32.038 --> 01:48:33.506
IS ZERO. AND I'D LIKE TO

01:48:33.573 --> 01:48:36.176
EXPLAIN WHY THAT IS. IT'S IT'S

01:48:36.243 --> 01:48:38.078
MY MARKET OBSERVATION OF WHAT

01:48:38.144 --> 01:48:44.784
WOULD HAPPEN. IS THAT I'D LIKE

01:48:44.851 --> 01:48:46.586
TO EXPLAIN TO YOU KIND OF WHERE

01:48:46.653 --> 01:48:48.788
WE ARE. WE HAD AN AVAILABILITY

01:48:48.855 --> 01:48:49.923
CRISIS. YOU ALL LIVED THROUGH

01:48:49.990 --> 01:48:52.092
IT, YOU KNOW IT. AND IT WAS

01:48:52.158 --> 01:48:53.860
DRIVEN BY THE INABILITY OF

01:48:53.927 --> 01:48:55.629
INSURERS TO OBTAIN ACTUARIALLY

01:48:55.695 --> 01:48:59.599
SOUND RATES. THE SYSTEM CAME IN

01:48:59.666 --> 01:49:04.638
TO HELP DEAL WITH THAT. SO.

01:49:04.704 --> 01:49:06.573
WE'RE WE'RE SEEING GREEN SHOOTS

01:49:06.640 --> 01:49:07.874
OF RECOVERY. WE'RE SEEING

01:49:07.941 --> 01:49:09.409
COMPANIES MAKING SIS FILINGS

01:49:09.476 --> 01:49:10.744
AND COMMITTING TO WRITING

01:49:10.810 --> 01:49:13.046
DISTRESSED AREAS. WE HAVEN'T

01:49:13.113 --> 01:49:15.048
SEEN ANY BIG COMPANIES LEAVING

01:49:15.115 --> 01:49:16.883
CALIFORNIA, SO THAT'S GREAT.

01:49:16.950 --> 01:49:18.518
BUT WE'RE NOT OUT OF THE WOODS

01:49:18.585 --> 01:49:19.719
YET. I MEAN, WE'RE WE'RE IN A

01:49:19.786 --> 01:49:21.554
VERY SHAKY, SHAKY PLACE RIGHT

01:49:21.621 --> 01:49:25.191
NOW. SO IF THERE WERE A, AN

01:49:25.258 --> 01:49:27.294
INCREASE IN THE COST OF RISK

01:49:27.360 --> 01:49:28.795
WITHOUT INSURER CONFIDENCE IN

01:49:28.862 --> 01:49:30.931
THE ABILITY TO INCREASE THEIR

01:49:30.997 --> 01:49:32.699
PREMIUMS, THAT IS GOING TO

01:49:32.766 --> 01:49:34.100
SERIOUSLY THREATEN THE

01:49:34.167 --> 01:49:36.670
AVAILABILITY OF INSURANCE. SO

01:49:36.736 --> 01:49:38.138
REGULATORY UNCERTAINTY SHOULD

01:49:38.204 --> 01:49:41.007
BE CONSIDERED IN ANY POLICY

01:49:41.074 --> 01:49:43.176
QUESTION. IF WE PURSUE THE

01:49:43.243 --> 01:49:45.745
STATUS QUO, THAT DOESN'T MEAN

01:49:45.812 --> 01:49:48.949
THAT THE FUTURE IS NOT GOING TO

01:49:49.015 --> 01:49:54.688
CHANGE, BECAUSE IF THERE IS. AN

01:49:54.754 --> 01:49:56.523
INABILITY TO COLLECT THIS

01:49:56.589 --> 01:49:58.992
SUBROGATION THAT THE INSURANCE

01:49:59.059 --> 01:50:00.794
INDUSTRY HAS BEEN LEANING ON

01:50:00.860 --> 01:50:05.832
FROM THE UTILITY INDUSTRY, THAT

01:50:05.899 --> 01:50:08.368
ITSELF COULD THREATEN

01:50:08.435 --> 01:50:10.937
AVAILABILITY. MICHAEL JUAREZ IS

01:50:11.004 --> 01:50:12.672
AN EXPERT ON UTILITIES, AND HE

01:50:12.739 --> 01:50:14.240
CAN TALK ABOUT WHETHER OR NOT

01:50:14.307 --> 01:50:16.176
THERE IS A THREAT AND WHAT THAT

01:50:16.242 --> 01:50:17.410
RISK IS AND ALL THAT. I'M JUST

01:50:17.477 --> 01:50:19.913
SAYING THAT IF SUBROGATION IS

01:50:19.980 --> 01:50:22.749
NOT COLLECTIBLE AT 70%, IF IT'S,

01:50:22.816 --> 01:50:24.651
YOU KNOW, WE'RE TRYING TO GET

01:50:24.718 --> 01:50:27.120
70% FROM A BANKRUPT COMPANY OR

01:50:27.187 --> 01:50:29.255
THE WE COULD GET IT IF THE

01:50:29.322 --> 01:50:30.690
WILDFIRE FUND EXISTED, BUT NOW

01:50:30.757 --> 01:50:32.492
IT DOESN'T EXIST ANYMORE. IF

01:50:32.559 --> 01:50:34.661
THOSE THINGS WERE TO HAPPEN,

01:50:34.728 --> 01:50:37.564
YOUR STATUS QUO IS STILL A VERY

01:50:37.630 --> 01:50:40.800
RISKY AND BAD PROPOSITION. SO I

01:50:40.867 --> 01:50:42.335
THAT'S THE WAY I PERCEIVE THIS

01:50:42.402 --> 01:50:44.771
AS AS KIND OF A AN OBSERVER OF

01:50:44.838 --> 01:50:47.240
THE MARKET. I THINK OF IT AS

01:50:47.307 --> 01:50:49.442
BEING SORT OF LIKE A PERSON

01:50:49.509 --> 01:50:51.011
WHO'S KIND OF SHAKY, LEANING ON

01:50:51.077 --> 01:50:53.780
A CANE. IF THE CANE COLLAPSES

01:50:53.847 --> 01:50:57.384
WITHOUT WARNING THAT THAT

01:50:57.450 --> 01:50:58.852
PERSON CAN FALL AND MAYBE NOT

01:50:58.918 --> 01:51:00.754
BE ABLE TO GET BACK UP AGAIN.

01:51:00.820 --> 01:51:01.955
SO THINK OF THIS AS LIKE THE

01:51:02.022 --> 01:51:03.423
HIP REPLACEMENT SURGERY THAT

01:51:03.490 --> 01:51:06.092
WE'RE THAT WE'RE USING TO KIND

01:51:06.159 --> 01:51:07.861
OF MAKE OURSELVES LESS SHAKY.

01:51:07.927 --> 01:51:09.229
WE'RE REALLY LEANING ON THAT

01:51:09.295 --> 01:51:10.697
CANE RIGHT NOW. SO THAT'S WHERE

01:51:10.764 --> 01:51:12.766
I SEE IT. SO IF INSURERS AND

01:51:12.832 --> 01:51:14.267
REINSURERS FOR SOME REASON,

01:51:14.334 --> 01:51:15.668
BECOME UNCERTAIN ABOUT THE

01:51:15.735 --> 01:51:16.736
TIMING AND THE AMOUNT OF

01:51:16.803 --> 01:51:18.972
RECOVERIES FROM UTILITIES, THEY

01:51:19.039 --> 01:51:22.208
MIGHT HAVE DIFFICULTY GETTING

01:51:22.275 --> 01:51:23.610
CHANGES IN SUBROGATION

01:51:23.676 --> 01:51:25.812
INCORPORATED INTO RATES,

01:51:25.879 --> 01:51:27.580
REINSURANCE COSTS ARE LIKELY TO

01:51:27.647 --> 01:51:29.382
INCREASE IF THE ANTICIPATED

01:51:29.449 --> 01:51:31.151
CERTAINTY OF SUBROGATION

01:51:31.217 --> 01:51:33.319
DECREASES AND THE RIGHT TO

01:51:33.386 --> 01:51:35.855
SEGREGATE BECOMES LESS VALUABLE.

01:51:35.922 --> 01:51:38.792
IF THE REINSURERS COST IN. IF

01:51:38.858 --> 01:51:40.960
THE COST OF REINSURANCE

01:51:41.027 --> 01:51:42.095
INCREASES, THE SYSTEM ALLOWS

01:51:42.162 --> 01:51:43.430
THAT TO BE BUILT INTO RATES,

01:51:43.496 --> 01:51:45.065
BUT THERE'S ABOUT A TWO YEAR

01:51:45.131 --> 01:51:46.666
LAG BEFORE THAT HAPPENS. AND IN

01:51:46.733 --> 01:51:48.868
THAT TIME IT'S ALMOST A DOLLAR

01:51:48.935 --> 01:51:51.671
FOR DOLLAR LEVEL OF INADEQUACY

01:51:51.738 --> 01:51:54.941
FOR THE WILDFIRE EXPOSED

01:51:55.008 --> 01:51:57.110
POLICIES. AND THAT MIGHT VERY

01:51:57.177 --> 01:51:58.711
QUICKLY IMPACT THE WILLINGNESS

01:51:58.778 --> 01:52:00.713
OF INSURERS TO PROVIDE COVERAGE

01:52:00.780 --> 01:52:02.916
IN WILDFIRE EXPOSED AREAS. SO

01:52:02.982 --> 01:52:04.451
IN CONCLUSION, I GUESS I'D SAY

01:52:04.517 --> 01:52:06.453
THE VALUATION OF SUBROGATION IS

01:52:06.519 --> 01:52:08.555
A MOVING TARGET. IT DEPENDS ON

01:52:08.621 --> 01:52:10.790
HOW THE MARKET VALUE VALUES THE

01:52:10.857 --> 01:52:12.225
TIMING AND THE CERTAINTY OF

01:52:12.292 --> 01:52:15.128
RECOVERY. SO FOR YOU ALL, THE

01:52:15.195 --> 01:52:16.563
FOCUS SHOULD NOT ONLY BE ON

01:52:16.629 --> 01:52:18.031
WHAT IS THE RIGHT NUMBER. I

01:52:18.098 --> 01:52:19.566
KNOW NUMBERS MATTER TO YOU AND

01:52:19.632 --> 01:52:20.767
I'M AN ACTUARY, SO I'M TRYING

01:52:20.834 --> 01:52:22.669
TO GIVE YOU SOME, BUT I REALLY

01:52:22.735 --> 01:52:25.004
WANT TO EXPLAIN HOW THE CHANGES

01:52:25.071 --> 01:52:27.340
IN POLICY MIGHT AFFECT THE COST

01:52:27.407 --> 01:52:28.441
SHARING BETWEEN THE UTILITIES,

01:52:28.508 --> 01:52:30.243
THE INSURERS AND THEIR

01:52:30.310 --> 01:52:31.678
CUSTOMERS, AND THE CONFIDENCE

01:52:31.744 --> 01:52:33.847
OF THE UTILITIES AND INSURERS

01:52:33.913 --> 01:52:35.982
IN THE CALIFORNIA MARKET. SO MY

01:52:36.049 --> 01:52:37.817
MOST IMPORTANT THOUGHT TODAY IS

01:52:37.884 --> 01:52:41.421
WE NEED TO PLAN IN ADVANCE FOR

01:52:41.488 --> 01:52:42.755
CONTINUITY AND AVOID SITUATIONS

01:52:42.822 --> 01:52:43.823
WHERE THE INSURANCE MARKET DOES

01:52:43.890 --> 01:52:45.625
FALL AND IT CAN'T GET BACK UP

01:52:45.692 --> 01:52:47.861
AGAIN. SO WE HAVEN'T TALKED

01:52:47.927 --> 01:52:49.562
ABOUT COST REDUCTION. I THINK

01:52:49.629 --> 01:52:51.364
THAT'S IMPORTANT TO CONTINUE.

01:52:51.431 --> 01:52:53.500
IF WE REALLY WANT AFFORDABLE

01:52:53.566 --> 01:52:55.301
INSURANCE. AND I'M HAPPY TO

01:52:55.368 --> 01:52:58.538
ANSWER QUESTIONS. THANK YOU.

01:52:58.605 --> 01:52:59.706
YES, I THINK WHAT WE'LL DO

01:52:59.772 --> 01:53:01.841
WE'LL TAKE QUESTIONS FOR MISS

01:53:01.908 --> 01:53:03.209
WATKINS. NOW, YOU'VE GIVEN US A

01:53:03.276 --> 01:53:05.178
LOT TO DIGEST ON THIS ONE PIECE

01:53:05.245 --> 01:53:07.914
OF PAPER. THANK YOU SO MUCH. SO

01:53:07.981 --> 01:53:09.716
IF PEOPLE HAVE QUESTIONS FOR

01:53:09.782 --> 01:53:12.552
MISS WATKINS, CHAIR CALDERON

01:53:12.619 --> 01:53:14.020
THANK YOU, MADAM CHAIR. THANK

01:53:14.087 --> 01:53:15.421
YOU FOR BEING HERE. WE

01:53:15.488 --> 01:53:16.556
APPRECIATE YOUR PRESENCE AND

01:53:16.623 --> 01:53:20.160
YOUR TESTIMONY. DOES THIS UNDER

01:53:20.226 --> 01:53:21.227
THE DIFFERENT DIFFERENT

01:53:21.294 --> 01:53:23.062
SCENARIOS. DOES THIS INCLUDE

01:53:23.129 --> 01:53:24.797
HOW THE FAIR PLAN AND SURPLUS

01:53:24.864 --> 01:53:25.899
LINES WOULD BE AFFECTED, OR IS

01:53:25.965 --> 01:53:28.735
THIS JUST THE ADMITTED MARKET?

01:53:28.801 --> 01:53:32.372
THAT'S A GREAT QUESTION. WE DID

01:53:32.438 --> 01:53:34.941
INCLUDE THE FAIR PLAN. WE DID

01:53:35.008 --> 01:53:37.710
NOT INCLUDE SURPLUS LINES. OKAY.

01:53:37.777 --> 01:53:39.512
ALL RIGHT. AND THEN YOU TALKED

01:53:39.579 --> 01:53:41.047
ABOUT SETTLEMENT DATA. DOES

01:53:41.114 --> 01:53:45.985
ANYONE HAVE THAT DATA. THERE'S

01:53:46.052 --> 01:53:49.255
PUBLICLY AVAILABLE DATA ON

01:53:49.322 --> 01:53:51.424
SPECIFIC THINGS LIKE EDISON, I

01:53:51.491 --> 01:53:53.092
THINK HAD A PRESS RELEASE ABOUT

01:53:53.159 --> 01:53:55.828
THE EATON FIRE. AND THERE'S

01:53:55.895 --> 01:53:58.331
SOME DATA BACK FROM THE PGE

01:53:58.398 --> 01:54:00.133
BANKRUPTCY THAT YOU CAN PULL.

01:54:00.200 --> 01:54:02.635
IT'S VERY ANECDOTAL. THERE'S

01:54:02.702 --> 01:54:04.070
NOT ONE. IT'S JUST LIKE A

01:54:04.137 --> 01:54:05.505
SUBSET. AND YOU EVEN IF YOU

01:54:05.572 --> 01:54:07.674
LOOK AT ANY GIVEN YEAR, THE

01:54:07.740 --> 01:54:09.108
DOLLARS FOR ANY GIVEN INSURANCE

01:54:09.175 --> 01:54:10.510
COMPANY, YOU CAN'T ACTUALLY

01:54:10.577 --> 01:54:12.412
TELL WHAT THEY GOT. ALL YOU CAN

01:54:12.478 --> 01:54:17.083
SEE IS LIKE. YOU CHANGES LIKE

01:54:17.150 --> 01:54:18.751
MERCURY PUBLISHED A RANGE OF

01:54:18.818 --> 01:54:19.886
WHAT THEY SAID. THEY THOUGHT

01:54:19.953 --> 01:54:21.020
THAT THE LOW AND MEDIUM AND

01:54:21.087 --> 01:54:23.523
HIGH WERE CEA PUBLISHED

01:54:23.590 --> 01:54:26.025
SOMETHING. BUT BUT VERY, VERY

01:54:26.092 --> 01:54:29.562
SMALL NUMBER OF OF PUBLICLY

01:54:29.629 --> 01:54:31.030
AVAILABLE DATA POINTS. THAT'S

01:54:31.097 --> 01:54:32.832
WHY WE HAD TO USE TWO METHODS

01:54:32.899 --> 01:54:34.634
TO TIE THEM BACK. OKAY. THANK

01:54:34.701 --> 01:54:39.038
YOU. SO, MISS WATKINS, AS YOU

01:54:39.105 --> 01:54:40.773
AS YOU HIGHLIGHTED THE THE

01:54:40.840 --> 01:54:44.744
NUMBERS HERE ARE VERY MUCH

01:54:44.811 --> 01:54:46.879
AVERAGES AND THE INDIVIDUAL

01:54:46.946 --> 01:54:48.314
HOUSEHOLD IMPACT WILL, WILL BE

01:54:48.381 --> 01:54:50.850
DETERMINED VERY MUCH BY HOW

01:54:50.917 --> 01:54:52.485
MUCH WILDFIRE PREMIUM IS PART

01:54:52.552 --> 01:54:54.821
OF YOUR OVERALL PREMIUM. I WANT

01:54:54.887 --> 01:54:56.222
TO MAKE SURE I UNDERSTOOD WHAT

01:54:56.289 --> 01:54:58.091
WHAT I THINK YOU SAID. SO YOU

01:54:58.157 --> 01:55:00.193
SAID THAT WILDFIRE PREMIUM

01:55:00.260 --> 01:55:03.096
COULD GO ANYWHERE FROM ZERO TO

01:55:03.162 --> 01:55:06.733
3 TO 4 X, WHICH. SO FOR THE THE

01:55:06.799 --> 01:55:09.202
HIGH SCENARIO, I THINK YOU SAID

01:55:09.269 --> 01:55:11.371
THAT RANGE WOULD THEN BE, YOU

01:55:11.437 --> 01:55:12.505
KNOW, IF SOMEONE HAS NO

01:55:12.572 --> 01:55:14.674
WILDFIRE PREMIUM, THEN THEIR,

01:55:14.741 --> 01:55:16.776
THEIR DELTA IS GOING TO BE 0%

01:55:16.843 --> 01:55:19.679
FOR PEOPLE IN HIGHER WILDFIRE

01:55:19.746 --> 01:55:22.181
AREAS. IT WOULD BE MORE LIKE

01:55:22.248 --> 01:55:23.616
40%. IS THAT WHAT YOU SAID?

01:55:23.683 --> 01:55:25.451
WELL, THE WILDFIRE PORTION OF

01:55:25.518 --> 01:55:29.355
THE PREMIUM WOULD GO UP BY 40%.

01:55:29.422 --> 01:55:32.225
MICHAEL'S TEAM DID AN ANALYSIS

01:55:32.292 --> 01:55:34.761
USING OUR NUMBERS BY RISK SCORE

01:55:34.827 --> 01:55:37.697
BAND. AND SO I BROUGHT THEM

01:55:37.764 --> 01:55:38.898
WITH ME. SO YOU CAN, YOU CAN

01:55:38.965 --> 01:55:40.767
YEAH, YEAH, YEAH. YOU CAN ASK

01:55:40.833 --> 01:55:42.702
YOU CAN ASK HIM ABOUT THE OKAY,

01:55:42.769 --> 01:55:44.103
WE'LL SAVE DOLLAR AMOUNTS, BUT

01:55:44.170 --> 01:55:45.938
IT'S GOING TO BE 40% ON THE

01:55:46.005 --> 01:55:47.507
WILDFIRE PORTION OF PREMIUM FOR

01:55:47.573 --> 01:55:49.208
THOSE PEOPLE AND THEN ZERO ON

01:55:49.275 --> 01:55:50.276
THE OTHER PORTION OF PREMIUM

01:55:50.343 --> 01:55:52.078
FOR THOSE PEOPLE. AND IT STILL

01:55:52.145 --> 01:55:53.179
AVERAGES OUT TO SOMETHING LESS

01:55:53.246 --> 01:55:56.382
THAN 40%. OKAY. ALL RIGHT. AND

01:55:56.449 --> 01:55:58.885
I REALLY APPRECIATE YOUR POINT,

01:55:58.951 --> 01:56:00.820
WHICH IS SO IMPORTANT AROUND

01:56:00.887 --> 01:56:02.522
THE IMPORTANCE OF REGULATORY

01:56:02.588 --> 01:56:03.623
CERTAINTY AND THE IMPORTANCE OF

01:56:03.690 --> 01:56:05.692
MARKET CONFIDENCE, YOU KNOW,

01:56:05.758 --> 01:56:07.560
ACROSS BOTH OF THESE SECTORS IN

01:56:07.627 --> 01:56:09.329
ORDER TO ENSURE STABILITY FOR

01:56:09.395 --> 01:56:10.797
CALIFORNIANS. MY LAST QUESTION

01:56:10.863 --> 01:56:12.932
BEFORE WE TURN TO MR. LARA, YOU

01:56:12.999 --> 01:56:14.233
YOUR LAST COMMENT WAS SOMETHING

01:56:14.300 --> 01:56:15.301
ABOUT, YOU KNOW, THE IMPORTANCE

01:56:15.368 --> 01:56:18.004
OF COST CONTAINMENT. I DON'T

01:56:18.071 --> 01:56:19.772
THINK IT'S BECAUSE YOU STARTED

01:56:19.839 --> 01:56:21.607
OFF BY SAYING YOU WANTED THE

01:56:21.674 --> 01:56:23.376
LOWEST COST TO MANAGE DISASTERS

01:56:23.443 --> 01:56:25.178
AND THE SMARTEST PLACE TO

01:56:25.244 --> 01:56:28.414
SOCIALIZE AND CHAIR. YOU KNOW,

01:56:28.481 --> 01:56:29.849
WE'RE TALKING ABOUT AVAILABLE

01:56:29.916 --> 01:56:32.051
AND AFFORDABLE INSURANCE.

01:56:32.118 --> 01:56:33.820
MARKET CONFIDENCE GETS TO

01:56:33.886 --> 01:56:34.620
AVAILABILITY. IT DOESN'T REALLY

01:56:34.687 --> 01:56:36.689
GET TO AFFORDABILITY.

01:56:36.756 --> 01:56:37.790
AFFORDABILITY IS ONLY GOING TO

01:56:37.857 --> 01:56:40.293
HAPPEN WITH RISK REDUCTION. AND

01:56:40.360 --> 01:56:41.694
YOU DIDN'T ASK ME TO TESTIFY

01:56:41.761 --> 01:56:44.997
ABOUT THAT. BUT I WILL SAY IF

01:56:45.064 --> 01:56:47.867
IF WE DISINCENTIVIZE RISK

01:56:47.934 --> 01:56:48.935
REDUCTION, WE ARE REALLY

01:56:49.001 --> 01:56:50.703
MISSING THE POINT. IF ALL WE

01:56:50.770 --> 01:56:52.872
FOCUS ON IS THE COST OF RISK

01:56:52.939 --> 01:56:54.340
TRANSFER. WE MISSED A POINT, WE

01:56:54.407 --> 01:56:55.408
MISSED AN OPPORTUNITY, AND

01:56:55.475 --> 01:56:56.576
WE'RE STILL GOING TO MAKE MAKE

01:56:56.642 --> 01:56:58.444
IT SO THAT CALIFORNIA IS NOT A

01:56:58.511 --> 01:57:01.214
GOOD PLACE TO LIVE. YES, THAT

01:57:01.280 --> 01:57:03.716
IS AN INCREDIBLY IMPORTANT

01:57:03.783 --> 01:57:06.586
POINT. AND AS YOU KNOW,

01:57:06.652 --> 01:57:10.556
CRAFTING A HOLISTIC COMMUNITY

01:57:10.623 --> 01:57:11.591
WILDFIRE MITIGATION STRATEGY

01:57:11.657 --> 01:57:13.092
FOR THE STATE OF CALIFORNIA IS

01:57:13.159 --> 01:57:14.560
A REALLY, REALLY IMPORTANT PART

01:57:14.627 --> 01:57:16.963
OF THIS PUZZLE AND A REALLY

01:57:17.029 --> 01:57:18.097
IMPORTANT PART OF THE SOLUTION

01:57:18.164 --> 01:57:19.298
AS WE MOVE FORWARD AND JUST,

01:57:19.365 --> 01:57:20.600
YOU KNOW, PUBLIC SERVICE

01:57:20.666 --> 01:57:21.734
ANNOUNCEMENT, THE REASON THAT

01:57:21.801 --> 01:57:23.169
THIS COMMITTEE HAS NOT HOSTED A

01:57:23.236 --> 01:57:24.637
HEARING ON THAT TOPIC IS THAT

01:57:24.704 --> 01:57:26.739
WE'LL BE PARTNERING WITH THE

01:57:26.806 --> 01:57:28.107
COMMITTEES WHOSE JURISDICTION

01:57:28.174 --> 01:57:29.942
THAT IS TO ADVANCE THE

01:57:30.009 --> 01:57:31.010
CONVERSATIONS THAT WE BEGAN AT

01:57:31.077 --> 01:57:32.879
THE END OF SESSION AND ENSURE

01:57:32.945 --> 01:57:36.115
THAT WE EMERGE WITH A WILDFIRE

01:57:36.182 --> 01:57:37.550
MITIGATION STRATEGY THAT IS

01:57:37.617 --> 01:57:38.951
REALLY GOING TO DELIVER FOR

01:57:39.018 --> 01:57:40.386
CALIFORNIANS, BECAUSE, AS WE

01:57:40.453 --> 01:57:43.623
ALL KNOW, THE THE CHEAPEST

01:57:43.689 --> 01:57:45.091
DISASTER IS THE ONE THAT NEVER

01:57:45.158 --> 01:57:46.692
HAPPENS. I AGREE. ALL RIGHT.

01:57:46.759 --> 01:57:48.661
ANY QUESTIONS? NO. ALL RIGHT.

01:57:48.728 --> 01:57:50.596
SO WE IF YOU CAN STAY BECAUSE I

01:57:50.663 --> 01:57:52.432
THINK THAT THERE WILL BE SOME

01:57:52.498 --> 01:57:53.499
QUESTIONS THAT FOLKS HAVE FOR

01:57:53.566 --> 01:57:55.134
BOTH OF YOU. MR. GUERRA.

01:57:55.201 --> 01:57:59.172
WELCOME. THANK YOU. THANK YOU

01:57:59.238 --> 01:58:00.940
FOR HAVING ME. CHAIR

01:58:01.007 --> 01:58:03.810
PETRIE-NORRIS CHAIR CALDERON.

01:58:03.876 --> 01:58:05.678
OTHER MEMBERS OF THE ASSEMBLY.

01:58:05.745 --> 01:58:07.513
IT'S A PLEASURE TO BE HERE.

01:58:07.580 --> 01:58:08.614
EXCUSE MY VOICE. I'M GETTING

01:58:08.681 --> 01:58:12.518
OVER A COLD. THE YOU ASKED ME

01:58:12.585 --> 01:58:15.321
TO SPEAK ABOUT THE IMPACTS ON

01:58:15.388 --> 01:58:18.991
RATEPAYERS OF SUBROGATION AND.

01:58:19.058 --> 01:58:21.494
AND I'M GOING TO JUST CONTINUE

01:58:21.561 --> 01:58:22.895
ON WHERE WHERE THIS

01:58:22.962 --> 01:58:23.930
CONVERSATION LEFT OFF JUST FOR

01:58:23.996 --> 01:58:26.199
A MOMENT. YOU COULD SHOW MY

01:58:26.265 --> 01:58:27.333
SLIDES OR MAYBE YOU GUYS HAVE

01:58:27.400 --> 01:58:29.735
MY SLIDES. SO IT DOESN'T MATTER

01:58:29.802 --> 01:58:31.504
EITHER WAY, IT'S FINE BY ME. OH,

01:58:31.571 --> 01:58:33.439
THERE WE GO. OKAY, SO I'M

01:58:33.506 --> 01:58:36.375
MICHAEL LARA, I AM THE MELVIN

01:58:36.442 --> 01:58:37.710
AND JOAN LANE SENIOR FELLOW AT

01:58:37.777 --> 01:58:39.445
THE STANFORD INSTITUTE FOR THE

01:58:39.512 --> 01:58:41.614
ENVIRONMENT, WHERE I RUN A TEAM

01:58:41.681 --> 01:58:44.150
THAT FOCUSES ON WILDFIRE,

01:58:44.217 --> 01:58:45.952
UTILITY COST, WILDFIRE, AND

01:58:46.018 --> 01:58:48.521
INSURANCE IMPACTS AS WELL. AND

01:58:48.588 --> 01:58:50.289
I'M HONORED TO SPEAK WITH YOU

01:58:50.356 --> 01:58:53.092
TODAY. I AM SPEAKING IN MY

01:58:53.159 --> 01:58:57.463
PERSONAL CAPACITY. I THINK

01:58:57.530 --> 01:58:58.564
SOMEONE ELSE MAYBE RUNS THE

01:58:58.631 --> 01:59:01.067
SLIDES. NEXT SLIDE PLEASE. I

01:59:01.133 --> 01:59:02.869
JUST WANT TO START OFF THIS

01:59:02.935 --> 01:59:04.337
CONVERSATION BY NOTING THAT

01:59:04.403 --> 01:59:05.371
WILDFIRE STRUCTURE LOSS IS

01:59:05.438 --> 01:59:06.572
TRULY UNPRECEDENTED. THERE WAS

01:59:06.639 --> 01:59:08.241
SOME DISCUSSION OF THE WHICH

01:59:08.307 --> 01:59:10.776
RISK FIRES FROM OH SEVEN BY THE

01:59:10.843 --> 01:59:12.712
PRIOR PANELISTS. AND THOSE WERE

01:59:12.778 --> 01:59:15.481
A HORROR WHEN THEY OCCURRED.

01:59:15.548 --> 01:59:16.849
MANY OF US REMEMBER THEM. MY

01:59:16.916 --> 01:59:17.650
BROTHER IN LAW WAS A

01:59:17.717 --> 01:59:19.519
FIREFIGHTER ON THOSE FIRES, AND

01:59:19.585 --> 01:59:20.553
HE CAME BACK KIND OF

01:59:20.620 --> 01:59:26.092
TRAUMATIZED. THE. THE STRUCTURE

01:59:26.158 --> 01:59:28.094
LOSS TO THE LAST TEN YEARS HAS

01:59:28.160 --> 01:59:30.229
PLACED UNPRECEDENTED STRAIN ON

01:59:30.296 --> 01:59:32.031
BOTH THE UTILITIES AND THE

01:59:32.098 --> 01:59:34.200
INSURANCE SYSTEM IN CALIFORNIA.

01:59:34.267 --> 01:59:35.401
AND, YOU KNOW, THIS FIGURE JUST

01:59:35.468 --> 01:59:37.169
LAYS OUT THE NUMBERS AND YOU

01:59:37.236 --> 01:59:39.205
CAN SEE THAT, YOU KNOW, THEY

01:59:39.272 --> 01:59:41.774
ARE ENORMOUS. AND ON THE THE

01:59:41.841 --> 01:59:43.576
LITTLE SKINNY BARS SHOW YOU

01:59:43.643 --> 01:59:45.011
THAT THE LOSSES ARE REALLY

01:59:45.077 --> 01:59:46.512
COMING FROM A VERY SMALL NUMBER

01:59:46.579 --> 01:59:48.548
OF FIRES. AND WE REMEMBER WHAT

01:59:48.614 --> 01:59:50.383
THOSE FIRES ARE, RIGHT? WE

01:59:50.449 --> 01:59:52.218
REMEMBER THE TUBBS FIRE

01:59:52.285 --> 01:59:53.619
ASSEMBLY MEMBER, ROGERS, I AM

01:59:53.686 --> 01:59:56.122
CERTAIN THAT YOU DO. WE

01:59:56.188 --> 01:59:58.724
REMEMBER THE CAMPFIRE AND THE

01:59:58.791 --> 01:59:59.959
WOOLSEY AND THOMAS FIRES. AND

02:00:00.026 --> 02:00:01.193
WE, OF COURSE, REMEMBER THE

02:00:01.260 --> 02:00:02.261
TRAGEDIES IN SOUTHERN

02:00:02.328 --> 02:00:03.396
CALIFORNIA FROM LAST YEAR. AND

02:00:03.462 --> 02:00:05.331
THE THING I JUST WANT TO POINT

02:00:05.398 --> 02:00:06.732
TO IS THAT WE'RE, WE'RE, WE'RE

02:00:06.799 --> 02:00:07.733
REALLY FOCUSED ON THIS VERY

02:00:07.800 --> 02:00:09.368
SMALL NUMBER OF EVENTS, AND

02:00:09.435 --> 02:00:10.503
WE'RE LOSING TENS OF THOUSANDS

02:00:10.570 --> 02:00:12.672
OF STRUCTURES IN THOSE EVENTS.

02:00:12.738 --> 02:00:15.207
NEXT SLIDE PLEASE. SO THIS IS

02:00:15.274 --> 02:00:17.043
KIND OF A FUNNY PICTURE IN A

02:00:17.109 --> 02:00:19.979
WAY. THIS IS RICHARD NIXON ON

02:00:20.046 --> 02:00:23.849
HIS ROOF IN BEL AIR IN 1961.

02:00:23.916 --> 02:00:25.084
AND A COUPLE OF THINGS I WANT

02:00:25.151 --> 02:00:26.953
TO NOTE ABOUT THIS PICTURE. AND

02:00:27.019 --> 02:00:28.087
THIS GETS TO WHAT NANCY SAID

02:00:28.154 --> 02:00:30.022
AND WHAT THE SO MANY MEMBERS OF

02:00:30.089 --> 02:00:31.090
THIS HEARING HAVE WORKED SO

02:00:31.157 --> 02:00:32.825
HARD ON, WHICH IS RISK

02:00:32.892 --> 02:00:33.960
REDUCTION. NOTICE THAT HE IS

02:00:34.026 --> 02:00:35.795
STANDING ON A WOOD SHAKE

02:00:35.861 --> 02:00:37.563
SHINGLE ROOF. THERE'S A

02:00:37.630 --> 02:00:39.332
WONDERFUL CAL FIRE MOVIE IF YOU

02:00:39.398 --> 02:00:40.800
GO ON YOUTUBE CALLED BUILT TO

02:00:40.866 --> 02:00:42.568
BURN, ABOUT THIS FIRE AND ABOUT

02:00:42.635 --> 02:00:44.370
THE SIGNIFICANCE OF THOSE ROOFS

02:00:44.437 --> 02:00:46.205
IN CAUSING THE LOSSES. THE

02:00:46.272 --> 02:00:47.273
OTHER THING I WANT TO NOTE,

02:00:47.340 --> 02:00:51.277
THOUGH, 484 STRUCTURES THAT

02:00:51.344 --> 02:00:53.045
WOULD BARELY MAKE THE NEWS

02:00:53.112 --> 02:00:55.481
THESE DAYS, RIGHT. THIS IS A

02:00:55.548 --> 02:00:56.983
HISTORIC FIRE IN CALIFORNIA

02:00:57.049 --> 02:00:58.150
HISTORY. IT IS KIND OF THE

02:00:58.217 --> 02:01:00.653
BIRTH OF THE OF FIRE SCOPE. A

02:01:00.720 --> 02:01:02.455
LOT OF THE EMERGENCY MANAGEMENT

02:01:02.521 --> 02:01:03.456
MECHANISMS, LARGE INCIDENT

02:01:03.522 --> 02:01:04.490
MANAGEMENT MECHANISMS THAT WE

02:01:04.557 --> 02:01:05.558
HAVE IN CALIFORNIA AND THAT

02:01:05.625 --> 02:01:07.059
HAVE BECOME A NATIONAL STANDARD.

02:01:07.126 --> 02:01:11.764
WE LOST 484 HOMES. SPOKANE THIS

02:01:11.831 --> 02:01:14.066
SUMMER. 900 STRUCTURES MADE THE

02:01:14.133 --> 02:01:16.502
NEWS FOR ONE DAY. SO WE ARE

02:01:16.569 --> 02:01:18.237
LIVING IN A DIFFERENT WORLD.

02:01:18.304 --> 02:01:20.072
THE RISKS ARE FUNDAMENTALLY

02:01:20.139 --> 02:01:21.874
DIFFERENT NOW THAN THEY WERE.

02:01:21.941 --> 02:01:24.443
AND ALSO WE HAVE AGENCY. AND

02:01:24.510 --> 02:01:26.312
THE WORK THAT YOU ARE DOING TO

02:01:26.379 --> 02:01:28.648
DRIVE DOWN RISKS IS THE TRUE

02:01:28.714 --> 02:01:30.116
SOLUTION HERE, RIGHT? AND WE'VE

02:01:30.182 --> 02:01:31.917
ALL BEEN THROUGH THE ZONE ZERO

02:01:31.984 --> 02:01:33.986
MAYBE. WELL, SOME OF US HAVE

02:01:34.053 --> 02:01:35.087
BEEN THROUGH THE ZONE ZERO

02:01:35.154 --> 02:01:36.122
CONVERSATION. I ASSUME YOU ALL

02:01:36.188 --> 02:01:38.024
HAVE TO IN YOUR ROLE AS

02:01:38.090 --> 02:01:38.991
LEGISLATORS, AND YOU'VE BEEN

02:01:39.058 --> 02:01:40.026
HEARING ABOUT THAT PROBABLY

02:01:40.092 --> 02:01:41.293
FROM CONSTITUENTS. BUT I CAN'T

02:01:41.360 --> 02:01:44.196
EMPHASIZE ENOUGH HOW THE TRUE

02:01:44.263 --> 02:01:45.631
SOLUTIONS TO THIS PROBLEM

02:01:45.698 --> 02:01:49.201
INVOLVE SAFE COMMUNITIES. I

02:01:49.268 --> 02:01:51.671
PERSONALLY WAS SO HAPPY TO SEE

02:01:51.737 --> 02:01:53.839
THE THE ELEMENTARY SCHOOL IN

02:01:53.906 --> 02:01:56.042
PARADISE REOPENING THIS SUMMER.

02:01:56.108 --> 02:01:57.910
KIDS GETTING TO GO TO SCHOOL IN

02:01:57.977 --> 02:02:00.680
THAT TOWN, IN THE PLACE WHERE

02:02:00.746 --> 02:02:01.847
THEY LIVE FOR THE FIRST TIME

02:02:01.914 --> 02:02:03.816
SINCE 2018. WE NEED TO AVOID

02:02:03.883 --> 02:02:04.984
THOSE KINDS OF PERSONAL

02:02:05.051 --> 02:02:06.252
TRAGEDIES FOR PEOPLE, AND THE

02:02:06.318 --> 02:02:08.154
WAY WE'RE GOING TO DO THAT IS

02:02:08.220 --> 02:02:10.089
NOT BY REARRANGING THE DECK

02:02:10.156 --> 02:02:12.558
CHAIRS, BUT BY AVOIDING THE

02:02:12.625 --> 02:02:22.668
ICEBERG. NEXT SLIDE PLEASE. SO.

02:02:22.735 --> 02:02:24.503
YEAH, I, I DON'T HAVE

02:02:24.570 --> 02:02:26.205
VISIBILITY ON MY SLIDES. HERE

02:02:26.272 --> 02:02:31.510
WE GO. SO. OH, THEY DIDN'T ALL

02:02:31.577 --> 02:02:32.712
COME THROUGH. OH THANK YOU

02:02:32.778 --> 02:02:35.247
NANCY. YOU'RE THE BEST. SO

02:02:35.314 --> 02:02:36.749
FIRST POINT I WANT TO MAKE IS,

02:02:36.816 --> 02:02:38.751
IS THAT WE NEED TO BE THINKING

02:02:38.818 --> 02:02:39.919
ABOUT THIS PROBLEM HOLISTICALLY.

02:02:39.985 --> 02:02:43.189
THIS IS JUST A COUNT OF

02:02:43.255 --> 02:02:46.759
STRUCTURES IN IN CAL FIRE

02:02:46.826 --> 02:02:48.561
DEFINED WILDFIRE HAZARD

02:02:48.627 --> 02:02:51.097
SEVERITY ZONES FOR THE FOR

02:02:51.163 --> 02:02:52.531
UTILITIES IN CALIFORNIA THAT

02:02:52.598 --> 02:02:53.399
REALLY MATTER. AND ONE OF THEM

02:02:53.466 --> 02:02:55.267
YOU MAY NOT HAVE THOUGHT ABOUT

02:02:55.334 --> 02:02:57.203
VERY MUCH, BUT I WOULD URGE YOU

02:02:57.269 --> 02:02:59.405
TO THINK ABOUT MORE. OF COURSE,

02:02:59.472 --> 02:03:01.607
THERE'S PGE AND EDISON AND S, D,

02:03:01.674 --> 02:03:04.143
G AND E, BUT LADWP IS ALSO ON

02:03:04.210 --> 02:03:05.878
THERE AND WE HAVE A MAP THAT

02:03:05.945 --> 02:03:07.446
WE'VE MADE. YOU CAN GO LOOK ON

02:03:07.513 --> 02:03:09.415
THE WEBSITE AND YOU CAN LOOK UP

02:03:09.482 --> 02:03:10.583
YOUR DISTRICT ON THE WEBSITE IF

02:03:10.649 --> 02:03:13.152
YOU WANT TO. AND SEE THE NUMBER

02:03:13.219 --> 02:03:16.622
OF STRUCTURES THAT ARE IN

02:03:16.689 --> 02:03:19.558
LITTLE SORT OF PIXELS IN ACROSS

02:03:19.625 --> 02:03:20.593
CALIFORNIA. AND WHAT YOU SEE

02:03:20.659 --> 02:03:22.762
THERE IS THAT LA AND SOUTHERN

02:03:22.828 --> 02:03:24.630
CALIFORNIA IN PARTICULAR, ARE A

02:03:24.697 --> 02:03:27.800
PLACE OF TREMENDOUS RISK AND A

02:03:27.867 --> 02:03:29.502
PLACE WE REALLY NEED TO FOCUS

02:03:29.568 --> 02:03:30.669
ON FROM A RISK MITIGATION

02:03:30.736 --> 02:03:32.171
PERSPECTIVE. AS WE SAW IN

02:03:32.238 --> 02:03:36.142
JANUARY ALMOST TWO YEARS AGO.

02:03:36.208 --> 02:03:40.446
THANK YOU. WE'RE KIND OF A TEAM

02:03:40.513 --> 02:03:42.581
SOMETIMES. SO NEXT SLIDE PLEASE.

02:03:42.648 --> 02:03:43.983
HOW BIG IS THE IMPACT OF

02:03:44.049 --> 02:03:45.151
SUBROGATION ON UTILITY

02:03:45.217 --> 02:03:46.585
CUSTOMERS? I WOULD SAY IT

02:03:46.652 --> 02:03:48.354
DEPENDS. I THINK NANCY DID AN

02:03:48.420 --> 02:03:49.421
INCREDIBLE JOB OF EXPLAINING

02:03:49.488 --> 02:03:52.424
SOME OF THE FACTORS. YOU KNOW,

02:03:52.491 --> 02:03:54.059
AT THE CORE OF THIS IS REALLY

02:03:54.126 --> 02:03:55.194
THE HEARING THAT HAPPENED

02:03:55.261 --> 02:03:56.262
YESTERDAY. WHO PAYS FOR

02:03:56.328 --> 02:03:57.530
WILDFIRES? WHAT IS OUR METHOD

02:03:57.596 --> 02:03:59.532
OF COST SOCIALIZATION. AND AND

02:03:59.598 --> 02:04:00.966
THAT'S GOING TO DRIVE HUGE

02:04:01.033 --> 02:04:03.068
IMPACTS ON, ON THE SUBROGATION

02:04:03.135 --> 02:04:04.937
THAT UTILITIES MIGHT BE SUBJECT

02:04:05.004 --> 02:04:08.507
TO. CERTAINLY LEGAL CERTAINTY

02:04:08.574 --> 02:04:09.809
REGARDING INVERSE CONDEMNATION

02:04:09.875 --> 02:04:12.144
CAN BE AN IMPORTANT FACTOR.

02:04:12.211 --> 02:04:13.379
THERE'S A CASE THAT WAS DECIDED

02:04:13.445 --> 02:04:15.381
A COUPLE OF YEARS AGO THAT THAT

02:04:15.447 --> 02:04:16.448
MAYBE, MAYBE INCREASES THE

02:04:16.515 --> 02:04:17.516
LEVEL OF LEGAL CERTAINTY. I

02:04:17.583 --> 02:04:19.251
WOULD TELL YOU, AS SOMEONE WHO

02:04:19.318 --> 02:04:20.820
LIVED THROUGH 17, 18, 19 IN

02:04:20.886 --> 02:04:22.421
THIS CONTEXT, I THOUGHT I WAS

02:04:22.488 --> 02:04:23.622
PRETTY CERTAIN BACK THEN. BUT,

02:04:23.689 --> 02:04:25.825
YOU KNOW, EVERYBODY TRIES AND

02:04:25.891 --> 02:04:27.993
TO, TO CHANGE THAT DOCTRINE

02:04:28.060 --> 02:04:30.196
WHEN THEY CAN. AND SO FAR THAT

02:04:30.262 --> 02:04:33.732
HAS NOT BEEN SUCCESSFUL AS WAS

02:04:33.799 --> 02:04:35.868
AS AS NANCY MENTIONED, THE

02:04:35.935 --> 02:04:38.737
SOLVENCY OF THE PAYER OF THE

02:04:38.804 --> 02:04:40.206
SUBROGATION JUDGMENT OF THE

02:04:40.272 --> 02:04:42.741
DEFENDANT IS VERY IMPORTANT. WE

02:04:42.808 --> 02:04:44.510
LIVED THROUGH A SITUATION WHERE

02:04:44.577 --> 02:04:47.012
THAT PAYER PGE DID HAVE A

02:04:47.079 --> 02:04:49.682
SOLVENCY ISSUE. AND I WOULD

02:04:49.748 --> 02:04:51.350
JUST NOTE I WOULD DIFFER A

02:04:51.417 --> 02:04:52.818
LITTLE BIT FROM THE PRIOR

02:04:52.885 --> 02:04:55.721
WITNESS IN NOTING THAT I. I

02:04:55.788 --> 02:04:57.189
WOULD ARGUE, HAVING SPOKEN TO

02:04:57.256 --> 02:04:59.692
MANY VICTIMS AND AND JUST

02:04:59.758 --> 02:05:01.093
KNOWING MANY VICTIMS OF THE

02:05:01.160 --> 02:05:02.294
NAPA SONOMA FIRES IN PARTICULAR.

02:05:02.361 --> 02:05:04.129
I LIVE IN MARIN COUNTY, SO JUST

02:05:04.196 --> 02:05:07.666
SOUTH OF THERE THAT I DON'T

02:05:07.733 --> 02:05:09.335
THINK IT'S TRUE THAT THE

02:05:09.401 --> 02:05:10.369
VICTIMS AND THE INSURANCE

02:05:10.436 --> 02:05:12.238
COMPANIES GOT THE SAME DEAL

02:05:12.304 --> 02:05:14.006
COMING OUT OF THAT. BANKRUPTCY

02:05:14.073 --> 02:05:16.141
INSURERS GOT CASH, VICTIMS GOT

02:05:16.208 --> 02:05:17.576
STOCK. THE STOCK DID NOT

02:05:17.643 --> 02:05:19.411
RECOVER IN THE SAME WAY. AND SO

02:05:19.478 --> 02:05:22.314
THESE ISSUES OF WHO GETS WHAT

02:05:22.381 --> 02:05:24.450
IN A SETTLEMENT CAN BE QUITE

02:05:24.516 --> 02:05:26.619
COMPLEX. THAT COULD ALSO BE

02:05:26.685 --> 02:05:28.120
TRUE IN A CONTEXT WHERE THERE

02:05:28.187 --> 02:05:30.189
IS A WHERE THE WILDFIRE FUND

02:05:30.256 --> 02:05:32.358
RUNS OUT OF MONEY, RIGHT. AND

02:05:32.424 --> 02:05:34.560
FIRST IN, FIRST OUT IS IS IN

02:05:34.627 --> 02:05:36.662
GENERAL, THE RULE FOR ELIGIBLE

02:05:36.729 --> 02:05:38.464
CLAIMS BEFORE THE WILDFIRE FUND.

02:05:38.530 --> 02:05:39.865
AND I THINK IT'S JUST SOMETHING

02:05:39.932 --> 02:05:42.067
TO BE THINKING ABOUT AS WE AND

02:05:42.134 --> 02:05:44.703
I, I HOPE THAT THE PRIOR

02:05:44.770 --> 02:05:47.840
WITNESSES STATEMENT THAT MR.

02:05:47.907 --> 02:05:49.375
GUTFELD'S STATEMENT THAT HE'S

02:05:49.441 --> 02:05:51.810
NOT CONCERNED ABOUT THE CLAIMS

02:05:51.877 --> 02:05:53.245
PAYING CAPACITY, THE FUND TURNS

02:05:53.312 --> 02:05:55.214
OUT TO BE TRUE FOR THE FIRE. I

02:05:55.281 --> 02:05:56.448
THINK THAT WOULD BE A FANTASTIC

02:05:56.515 --> 02:05:57.516
OUTCOME. THAT MEANS EVERYBODY

02:05:57.583 --> 02:05:58.517
GETS ALL THE MONEY THEY'RE

02:05:58.584 --> 02:06:00.286
ENTITLED TO FROM THAT FUND. IT

02:06:00.352 --> 02:06:02.187
IS POSSIBLE THAT IT IS NOT TRUE.

02:06:02.254 --> 02:06:05.190
WE DO NOT KNOW AT THIS POINT. I

02:06:05.257 --> 02:06:06.325
GUESS THE OTHER POINT I'D MAKE

02:06:06.392 --> 02:06:08.027
HERE IS THAT PRIORITY IN

02:06:08.093 --> 02:06:09.161
BANKRUPTCY OF UNSECURED

02:06:09.228 --> 02:06:10.362
CREDITOR CLAIMS IS SOMETHING

02:06:10.429 --> 02:06:12.665
THAT WE KIND OF ASSUME MAYBE

02:06:12.731 --> 02:06:13.766
INTUITIVELY, RIGHT, BECAUSE OF

02:06:13.832 --> 02:06:15.935
WHAT HAPPENED IN THE BANKRUPTCY.

02:06:16.001 --> 02:06:18.837
BUT TODAY, P G E'S DEBT, THEIR

02:06:18.904 --> 02:06:20.973
BONDS ARE SECURED. THERE IS A

02:06:21.040 --> 02:06:22.408
LIEN ON THOSE BONDS, AND THAT

02:06:22.474 --> 02:06:23.575
MEANS THEY WILL HAVE PRIORITY

02:06:23.642 --> 02:06:25.277
IN A BANKRUPTCY. SOUTHERN

02:06:25.344 --> 02:06:26.345
CALIFORNIA EDISON HAS ALWAYS

02:06:26.412 --> 02:06:29.281
BEEN THAT WAY. IT'S THAT THE

02:06:29.348 --> 02:06:31.116
PGE SITUATION WAS EXTREMELY

02:06:31.183 --> 02:06:33.919
UNUSUAL PRIOR TO THE 17 AND 18

02:06:33.986 --> 02:06:35.554
FIRES. AND IT HAS TO DO WITH

02:06:35.621 --> 02:06:36.655
KIND OF IDIOSYNCRASIES OF THE

02:06:36.722 --> 02:06:37.923
UTILITY COMING OUT OF THE FIRST

02:06:37.990 --> 02:06:40.392
BANKRUPTCY. BUT MOST UTILITIES

02:06:40.459 --> 02:06:41.994
USE SECURED BONDS AS A TOOL TO

02:06:42.061 --> 02:06:43.162
SAVE MONEY FOR CUSTOMERS

02:06:43.228 --> 02:06:44.096
BECAUSE THE INTEREST RATE IS

02:06:44.163 --> 02:06:45.798
LOWER. IT'S JUST LIKE YOUR

02:06:45.864 --> 02:06:46.865
MORTGAGE, RIGHT? IT'S EASIER TO

02:06:46.932 --> 02:06:48.033
BORROW MONEY IF SOMEONE CAN

02:06:48.100 --> 02:06:49.134
COME TAKE SOMETHING AWAY. IF

02:06:49.201 --> 02:06:50.869
YOU DON'T PAY THE DEBT AND

02:06:50.936 --> 02:06:51.904
UTILITIES ROUTINELY DO THAT,

02:06:51.971 --> 02:06:53.806
ALL OF OUR UTILITIES DO. SO IF

02:06:53.872 --> 02:06:54.840
THERE WERE EVER ANOTHER

02:06:54.907 --> 02:06:57.309
BANKRUPTCY VICTIMS AND

02:06:57.376 --> 02:06:58.811
SUBROGATION CLAIMS WOULD COME

02:06:58.877 --> 02:06:59.945
LAST, AND THAT'S GOING TO LOWER

02:07:00.012 --> 02:07:01.347
THE SETTLEMENT VALUE. IT JUST

02:07:01.413 --> 02:07:04.883
WILL. SO ALL THESE FACTORS

02:07:04.950 --> 02:07:05.951
DRIVE SETTLEMENT VALUE. IT'S

02:07:06.018 --> 02:07:07.753
VERY HARD TO PREDICT KIND OF

02:07:07.820 --> 02:07:08.854
HOW THEY WILL INTERACT WITH

02:07:08.921 --> 02:07:11.790
EACH OTHER AND WITH ANY FUTURE

02:07:11.857 --> 02:07:13.926
CLAIM THAT'S OF A SIGNIFICANT

02:07:13.993 --> 02:07:17.563
MAGNITUDE. NEXT SLIDE PLEASE.

02:07:17.629 --> 02:07:19.698
SO WHAT'S GOING TO HAPPEN FOR

02:07:19.765 --> 02:07:22.301
THE TYPICAL SUBROGATION

02:07:22.368 --> 02:07:24.136
FRACTION OF TOTAL LIABILITY HAS

02:07:24.203 --> 02:07:27.006
BEEN ABOUT 40%. THOSE THOSE

02:07:27.072 --> 02:07:28.107
NUMBERS, YOU CAN YOU CAN GET

02:07:28.173 --> 02:07:29.241
THOSE NUMBERS FROM DIFFERENT

02:07:29.308 --> 02:07:31.310
WAYS, BOTH FROM PG AND E'S. 17

02:07:31.377 --> 02:07:33.078
AND 18 FIRES AND ALSO FROM

02:07:33.145 --> 02:07:34.980
EDISON 17 AND 18 FIRES. YOU

02:07:35.047 --> 02:07:36.615
KNOW, THOSE THAT THAT COMES OUT

02:07:36.682 --> 02:07:38.851
IN THE FILINGS FOR THE

02:07:38.917 --> 02:07:42.121
SECURITIZATIONS. TYPICAL

02:07:42.187 --> 02:07:44.790
SETTLEMENTS I USE A 55% NUMBER.

02:07:44.857 --> 02:07:46.425
BUT AS AS NANCY DISCUSSED AND

02:07:46.492 --> 02:07:47.559
KNOWS A LOT MORE THAN I DO

02:07:47.626 --> 02:07:49.495
ABOUT. AND I WOULD I WOULD

02:07:49.561 --> 02:07:50.796
TOTALLY DEFER TO HER. YOU KNOW,

02:07:50.863 --> 02:07:52.031
THERE THERE'S LARGE VARIATION

02:07:52.097 --> 02:07:53.399
IN THOSE NUMBERS. AND IT

02:07:53.465 --> 02:07:54.600
DEPENDS ON A LOT OF FACTORS

02:07:54.666 --> 02:07:56.402
LIKE THE ONES I MENTIONED ON

02:07:56.468 --> 02:07:59.038
THE LAST SLIDE. IT DOES APPEAR

02:07:59.104 --> 02:08:00.939
I'M GOING TO IT DOES APPEAR

02:08:01.006 --> 02:08:02.508
THAT THE EATON FIRE SETTLEMENTS

02:08:02.574 --> 02:08:04.309
ARE GOING TO COME IN ON THE

02:08:04.376 --> 02:08:05.878
HIGH SIDE. SOME EVIDENCE FOR

02:08:05.944 --> 02:08:07.513
THAT IS COMING. YOU KNOW, THERE

02:08:07.579 --> 02:08:10.916
WAS A LOT OF PRESSURE ON THE

02:08:10.983 --> 02:08:12.351
INSURERS, THE PRIMARY INSURERS,

02:08:12.418 --> 02:08:15.287
NOT TO SELL CLAIMS TO HEDGE

02:08:15.354 --> 02:08:17.723
FUNDS. AFTER THE FIRE. AND A

02:08:17.790 --> 02:08:19.425
LOT OF THEM DIDN'T. BUT SOME OF

02:08:19.491 --> 02:08:20.526
THEM HAVE STARTED TO. AND

02:08:20.592 --> 02:08:22.094
THEY'RE SELLING THEM, YOU KNOW,

02:08:22.161 --> 02:08:25.364
AT NUMBERS IN THE HIGH 40S,

02:08:25.431 --> 02:08:26.832
APPARENTLY MAYBE EVEN $0.50 ON

02:08:26.899 --> 02:08:28.834
THE DOLLAR. IF THE HEDGE FUND

02:08:28.901 --> 02:08:30.002
IS GOING TO MAKE MONEY, IT'S

02:08:30.069 --> 02:08:31.870
GOING TO HAVE TO SETTLE FOR A

02:08:31.937 --> 02:08:33.939
HIGHER VALUE THAN THAT. AND,

02:08:34.006 --> 02:08:36.108
AND, YOU KNOW, PERHAPS THIS

02:08:36.175 --> 02:08:37.509
CASE THAT WAS DECIDED IN 24 IS

02:08:37.576 --> 02:08:38.610
INCREASED LEGAL CERTAINTY.

02:08:38.677 --> 02:08:39.745
PERHAPS THE WILDFIRE FUND IS

02:08:39.812 --> 02:08:43.248
THERE IS A VERY, YOU KNOW, A

02:08:43.315 --> 02:08:45.851
VERY SECURE PAYER OF CLAIMS.

02:08:45.918 --> 02:08:47.219
IT'S HARD TO KNOW WHY, BUT IT

02:08:47.286 --> 02:08:48.754
DOES SEEM THAT THE CLAIMS ARE

02:08:48.821 --> 02:08:50.823
ARE COMING OUT ON THE HIGH SIDE.

02:08:50.889 --> 02:08:52.157
AND AS I SAID, THESE CLAIMS

02:08:52.224 --> 02:08:54.526
WILL BE PAID OUT OF THE FUND

02:08:54.593 --> 02:08:56.628
BECAUSE OF THE STRUCTURE OF SB

02:08:56.695 --> 02:09:00.632
1054, ENACTED IN 19. THAT HAS

02:09:00.699 --> 02:09:02.501
NO IMPACT ON CUSTOMERS BEYOND

02:09:02.568 --> 02:09:03.869
THE STATUS QUO. THE STATUS QUO

02:09:03.936 --> 02:09:06.338
IS THAT CUSTOMERS PAY A NON

02:09:06.405 --> 02:09:10.309
BYPASSABLE FIXED FEE INTO THE

02:09:10.375 --> 02:09:11.376
WILDFIRE FUND EVERY MONTH, AND

02:09:11.443 --> 02:09:13.545
THEY WILL UNTIL 2035. AND THE

02:09:13.612 --> 02:09:15.447
CONTINUATION ACCOUNT CREATED BY

02:09:15.514 --> 02:09:17.483
SB 254 EXTENDS THAT PAYMENT

02:09:17.549 --> 02:09:20.419
TIMELINE OUT TO 2045. IF YOU

02:09:20.486 --> 02:09:22.154
ASSUME THAT LOSSES ARE ON THE

02:09:22.221 --> 02:09:24.189
ORDER OF 40% OR SUBROGATION,

02:09:24.256 --> 02:09:26.191
CLAIMS ARE ABOUT 40% OF TOTAL

02:09:26.258 --> 02:09:28.293
PAYOUTS FROM THE FUND, THAT

02:09:28.360 --> 02:09:29.328
IMPLIES THAT CUSTOMERS ARE

02:09:29.394 --> 02:09:32.998
PAYING DEPENDING ON THE UTILITY,

02:09:33.065 --> 02:09:36.535
SOMEWHERE BETWEEN $0.89 AND

02:09:36.602 --> 02:09:38.203
$1.30 A MONTH TO COVER

02:09:38.270 --> 02:09:39.238
SUBROGATION LOSSES FROM THE

02:09:39.304 --> 02:09:41.306
FROM THE WILDFIRE FUND.

02:09:41.373 --> 02:09:44.476
PROBABLY UNTIL 2045. NEXT SLIDE

02:09:44.543 --> 02:09:49.915
PLEASE. SO I THINK IT'S VERY

02:09:49.982 --> 02:09:51.350
HARD. AND ACTUALLY, WE'RE WE'RE

02:09:51.416 --> 02:09:52.151
DEVELOPING SOME TOOLS THAT

02:09:52.217 --> 02:09:53.318
WE'RE GOING TO HAVE AVAILABLE

02:09:53.385 --> 02:09:55.287
IN THE NEXT FEW MONTH OR SO TO

02:09:55.354 --> 02:09:57.789
THINK ABOUT KIND OF A POLICY

02:09:57.856 --> 02:10:01.760
CHANGE THAT YOU MIGHT CONSIDER,

02:10:01.827 --> 02:10:03.262
BUT IT'S VERY HARD TO SORT OF

02:10:03.328 --> 02:10:05.063
SAY WHAT THE FUTURE WILL LOOK

02:10:05.130 --> 02:10:07.232
LIKE. I JUST TOOK THE

02:10:07.299 --> 02:10:09.735
OPPORTUNITY TO IMAGINE A FIRE

02:10:09.801 --> 02:10:10.869
THAT LOOKS A LITTLE BIT LIKE

02:10:10.936 --> 02:10:12.771
THE EATON FIRE, YOU KNOW, AND I

02:10:12.838 --> 02:10:13.906
PICKED SOME ROUND NUMBERS TO

02:10:13.972 --> 02:10:15.707
MAKE THE MATH EASY. I HOPE

02:10:15.774 --> 02:10:17.743
THAT'S OKAY. BUT IMAGINE, YOU

02:10:17.809 --> 02:10:20.913
KNOW, IMAGINE A $22 BILLION

02:10:20.979 --> 02:10:24.516
LOSS IN 2027. THAT'D BE A

02:10:24.583 --> 02:10:26.251
HORRIFIC TRAGEDY. LET'S JUST

02:10:26.318 --> 02:10:27.719
START THERE, RIGHT? THIS IS

02:10:27.786 --> 02:10:29.621
ABOUT PEOPLE'S LIVES. BUT WE'RE

02:10:29.688 --> 02:10:30.689
HERE TODAY TO TALK ABOUT

02:10:30.756 --> 02:10:31.790
DOLLARS AND CENTS. SO WE'RE

02:10:31.857 --> 02:10:35.661
GOING TO DO THAT. THE UNDER

02:10:35.727 --> 02:10:37.763
EXISTING LAW, THE WILDFIRE FUND

02:10:37.829 --> 02:10:39.298
CONTINUATION ACCOUNT WOULD BE

02:10:39.364 --> 02:10:42.067
EXHAUSTED BY THAT FIRE. THAT'S

02:10:42.134 --> 02:10:43.635
THE CONTINUATION ACCOUNT IS HAS

02:10:43.702 --> 02:10:45.971
A NOMINAL VALUE OF $18 BILLION.

02:10:46.038 --> 02:10:47.172
BUT IT DOESN'T START COLLECTING

02:10:47.239 --> 02:10:49.107
MONEY UNTIL 2035 AND DOESN'T

02:10:49.174 --> 02:10:50.542
GET ALL THE MONEY UNTIL 2045.

02:10:50.609 --> 02:10:52.144
SO THE NET PRESENT VALUE, THE

02:10:52.211 --> 02:10:53.946
VALUE TODAY, THE CLAIMS PAYING

02:10:54.012 --> 02:10:55.814
CAPACITY IS CLOSER TO 12

02:10:55.881 --> 02:10:57.716
BILLION PEOPLE. PEOPLE'S

02:10:57.783 --> 02:10:59.084
ESTIMATES OF THAT CAN VARY.

02:10:59.151 --> 02:11:00.285
I'VE TALKED TO SOME INVESTORS

02:11:00.352 --> 02:11:01.453
WHO SAY IT'S CLOSER TO TEN AND

02:11:01.520 --> 02:11:05.123
NOT 12. I'M GOING TO SAY 12. SO

02:11:05.190 --> 02:11:07.025
LET'S ASSUME THE REMAINING $10

02:11:07.092 --> 02:11:09.494
BILLION IN LIABILITY, RIGHT? 22

02:11:09.561 --> 02:11:10.929
-12 IS TEN. THAT'S A NICE ROUND

02:11:10.996 --> 02:11:12.464
NUMBER. I LIKE ROUND NUMBERS

02:11:12.531 --> 02:11:14.866
BECAUSE I'M NOT GOOD AT MATH.

02:11:14.933 --> 02:11:17.069
LET'S ASSUME IT'S 40%

02:11:17.135 --> 02:11:18.637
SUBROGATION 60% OTHER CLAIMS.

02:11:18.704 --> 02:11:20.272
AND THERE'S A 55% SETTLEMENT

02:11:20.339 --> 02:11:22.040
VALUE. THAT WOULD SORT OF BE

02:11:22.107 --> 02:11:23.842
TYPICAL, RIGHT. AND LET'S

02:11:23.909 --> 02:11:26.712
ASSUME PRUDENCE. THIS IS

02:11:26.778 --> 02:11:28.180
IMPORTANT IN TERMS OF OUR LEGAL

02:11:28.247 --> 02:11:30.015
STRUCTURE FOR FIRE, BECAUSE

02:11:30.082 --> 02:11:32.951
THAT MEANS THAT UTILITY

02:11:33.018 --> 02:11:34.319
SHAREHOLDERS DO NOT HAVE TO PAY

02:11:34.386 --> 02:11:36.088
BACK THE WILDFIRE FUND. NOW

02:11:36.154 --> 02:11:37.222
THEY MIGHT AND THAT WOULD

02:11:37.289 --> 02:11:38.657
CHANGE THE CALCULUS. AND IT

02:11:38.724 --> 02:11:39.658
WOULD MEAN THAT, YOU KNOW,

02:11:39.725 --> 02:11:41.526
THERE'S A CAP ON REPAYMENTS UP

02:11:41.593 --> 02:11:43.729
TO 20% OF TÊ AND RATE BASE. AND

02:11:43.795 --> 02:11:46.231
THAT COULD AFFECT BOTH, YOU

02:11:46.298 --> 02:11:49.434
KNOW, HOW MUCH HOW MUCH

02:11:49.501 --> 02:11:51.169
LIABILITY IS THERE ALL THESE

02:11:51.236 --> 02:11:53.005
THINGS. BUT YOU KNOW, COST PER

02:11:53.071 --> 02:11:55.140
CUSTOMER OF A FIRE LIKE THAT

02:11:55.207 --> 02:11:57.242
DEPENDS ON ON NOT JUST HOW MUCH

02:11:57.309 --> 02:11:58.744
DOES THE FIRE COST, BUT WHAT

02:11:58.810 --> 02:12:00.879
UTILITY DOES THAT HAPPEN TO?

02:12:00.946 --> 02:12:04.816
AND, AND, AND YOU'D HAVE TO

02:12:04.883 --> 02:12:05.884
THINK ABOUT THIS ALL IN

02:12:05.951 --> 02:12:07.486
ADDITION TO THE WILDFIRE FUND

02:12:07.552 --> 02:12:08.620
SECURITIZATION CHARGE, WHICH IS

02:12:08.687 --> 02:12:10.355
GOING TO, AS I SAID, EXTEND OUT

02:12:10.422 --> 02:12:12.858
TO 2045. BUT IF SOMETHING LIKE

02:12:12.924 --> 02:12:17.095
THAT WERE TO HAPPEN, THE TOTAL

02:12:17.162 --> 02:12:18.263
COST PER CUSTOMER, YOU CAN SEE

02:12:18.330 --> 02:12:20.332
ON THE SLIDE BY UTILITY. AND

02:12:20.399 --> 02:12:22.868
THAT'S REALLY ASSUMING

02:12:22.934 --> 02:12:24.303
SECURITIZATION OF THE LOSS IN

02:12:24.369 --> 02:12:26.171
RATES, RIGHT? SO FOR THOSE OF

02:12:26.238 --> 02:12:28.307
YOU WHO ARE NOT UTILITY NERDS,

02:12:28.373 --> 02:12:30.842
THAT'S BASICALLY A A FIXED BILL

02:12:30.909 --> 02:12:32.611
CHARGE THAT IS THAT THE

02:12:32.678 --> 02:12:33.512
COMMISSION CAN'T MESS WITH. AND

02:12:33.578 --> 02:12:35.047
THAT ALLOWS YOU TO BORROW AT

02:12:35.113 --> 02:12:36.915
VERY LOW COST, I ASSUME 5.6%

02:12:36.982 --> 02:12:39.785
INTEREST, WHICH IS ROUGHLY

02:12:39.851 --> 02:12:41.553
WHERE THINGS SEEM TO BE RIGHT

02:12:41.620 --> 02:12:43.422
NOW FOR UTILITY SECURITIZATION.

02:12:43.488 --> 02:12:44.623
IT'S KIND OF UNBELIEVABLY LOW,

02:12:44.690 --> 02:12:46.124
IN MY OPINION, BUT IT'S GREAT

02:12:46.191 --> 02:12:48.126
THAT WE CAN DO IT. WHAT YOU SEE

02:12:48.193 --> 02:12:49.628
THERE IS THAT THE IMPACTS VARY

02:12:49.695 --> 02:12:51.263
A LOT DEPENDING ON THE SIZE OF

02:12:51.330 --> 02:12:52.731
THE UTILITY. IF THIS WERE TO

02:12:52.798 --> 02:12:54.232
HAPPEN IN SAN DIEGO, AND I

02:12:54.299 --> 02:12:56.234
WOULD AGREE THAT SAN DIEGO IS A

02:12:56.301 --> 02:12:57.803
LEADER ON WILDFIRE SAFETY, BUT

02:12:57.869 --> 02:13:00.038
ALSO IF THEIR HEAD OF WILDFIRE,

02:13:00.105 --> 02:13:01.073
BRIAN D'AGOSTINO, WERE SITTING

02:13:01.139 --> 02:13:02.307
NEXT TO ME, HE'D BE THE FIRST

02:13:02.374 --> 02:13:04.242
TO SAY THAT THERE IS NOT ZERO

02:13:04.309 --> 02:13:06.111
RISK THERE. AND VERY BAD THINGS

02:13:06.178 --> 02:13:07.512
ARE STILL POSSIBLE IN SAN DIEGO

02:13:07.579 --> 02:13:09.281
BECAUSE YOU CANNOT ELIMINATE

02:13:09.348 --> 02:13:12.617
THE RISK OF HIGH VOLTAGE LINES

02:13:12.684 --> 02:13:14.553
CAUSING SPARKS THAT CAUSE FIRES.

02:13:14.619 --> 02:13:17.589
YOU CAN REDUCE THE ODDS, BUT

02:13:17.656 --> 02:13:21.960
YOU CAN'T ELIMINATE IT. THE

02:13:22.027 --> 02:13:23.862
THIS CHART, THIS COST IS REALLY

02:13:23.929 --> 02:13:25.230
THE TOTAL COST. AND SO IF YOU

02:13:25.297 --> 02:13:28.400
WANT TO GET THE, THE, THE COST

02:13:28.467 --> 02:13:30.569
OF JUST THE SUBRO TAKE 40% OF

02:13:30.635 --> 02:13:32.537
THAT NUMBER, RIGHT? THAT'S

02:13:32.604 --> 02:13:33.839
THAT'S WHAT THAT'S WHAT THE

02:13:33.905 --> 02:13:40.312
SUBRO NUMBER WOULD BE. WHAT IF

02:13:40.379 --> 02:13:42.814
THAT WAS A POO FIRE? NEXT SLIDE

02:13:42.881 --> 02:13:44.216
PLEASE. SO WHAT IF THIS WAS AN

02:13:44.282 --> 02:13:45.784
LA DEPARTMENT OF WATER AND

02:13:45.851 --> 02:13:48.253
POWER FIRE? THAT'S THE POO MOST

02:13:48.320 --> 02:13:50.322
LIKELY TO BE RESPONSIBLE

02:13:50.389 --> 02:13:51.390
BECAUSE THEY HAVE MORE

02:13:51.456 --> 02:13:52.524
STRUCTURES AT RISK. THIS IS NOT

02:13:52.591 --> 02:13:54.326
THROWING SHADE ON THE CITY OF

02:13:54.393 --> 02:13:55.827
LOS ANGELES OR THE GREAT PEOPLE

02:13:55.894 --> 02:13:57.362
THAT RUN THAT UTILITY. IT IS A

02:13:57.429 --> 02:13:59.731
GOOD UTILITY. I THINK IT HAS A

02:13:59.798 --> 02:14:00.832
JOURNEY TO TAKE ON WILDFIRE

02:14:00.899 --> 02:14:01.867
MITIGATION SAFETY. THAT'S

02:14:01.933 --> 02:14:02.968
ANOTHER HEARING, PERHAPS

02:14:03.034 --> 02:14:05.904
SOMETIME. BUT BUT THEY'RE

02:14:05.971 --> 02:14:06.571
WORKING ON IT. AND THEY

02:14:06.638 --> 02:14:08.006
RECOGNIZE, ESPECIALLY TODAY

02:14:08.073 --> 02:14:09.074
AFTER THE PALISADES FIRE, THAT

02:14:09.141 --> 02:14:10.642
THEY DO HAVE A LOT OF RISK IN

02:14:10.709 --> 02:14:12.744
THEIR SERVICE TERRITORY. COST

02:14:12.811 --> 02:14:14.546
WOULD BE MUCH HIGHER BECAUSE

02:14:14.613 --> 02:14:15.947
PWA'S ARE NOT IN THE WILDFIRE

02:14:16.014 --> 02:14:17.349
FUND. AND LA DEPARTMENT OF

02:14:17.416 --> 02:14:19.017
WATER AND POWER IS A SMALLER

02:14:19.084 --> 02:14:20.185
UTILITY IN TERMS OF CUSTOMER

02:14:20.252 --> 02:14:21.720
COUNT AND LOAD, RIGHT? SO THE

02:14:21.787 --> 02:14:24.156
SAME, THE SAME FIRE THAT BURNS

02:14:24.222 --> 02:14:28.527
DOWN, SAY, 10,000 HOUSES IS AN

02:14:28.593 --> 02:14:31.129
ENORMOUS COST FOR LA, CITY OF

02:14:31.196 --> 02:14:32.097
LOS ANGELES, DEPARTMENT OF

02:14:32.164 --> 02:14:33.698
WATER AND POWER RATEPAYERS, 33

02:14:33.765 --> 02:14:34.900
BUCKS A MONTH FOR 30 YEARS.

02:14:34.966 --> 02:14:37.769
THAT'S LIKE A 25% RATE INCREASE

02:14:37.836 --> 02:14:45.010
FOR THEM. NEXT SLIDE PLEASE. SO

02:14:45.076 --> 02:14:48.180
WHAT DO WE SAVE IF WE CHANGE

02:14:48.246 --> 02:14:49.414
SUBROGATION? I THINK THE ANSWER

02:14:49.481 --> 02:14:51.850
IS IT DEPENDS A LOT ON WHAT YOU

02:14:51.917 --> 02:14:53.618
THINK THE STATUS QUO IS OR WHAT

02:14:53.685 --> 02:14:55.020
THE WHAT THE STATUS WHAT THE

02:14:55.086 --> 02:14:56.488
SITUATION MIGHT BE. FOR SOME

02:14:56.555 --> 02:14:58.657
FUTURE FIRE IS THE SETTLEMENT

02:14:58.723 --> 02:15:01.993
VALUE 55 OR 70%. IF SUB IS

02:15:02.060 --> 02:15:03.328
CAPPED AT 50% AND THE

02:15:03.395 --> 02:15:05.230
SETTLEMENT VALUE IS 55%, YOU

02:15:05.297 --> 02:15:08.066
HAVE A MODEST SAVINGS. YOU KNOW

02:15:08.133 --> 02:15:09.167
THIS. I REALIZE THERE'S A LOT

02:15:09.234 --> 02:15:10.335
OF PERCENTAGES CAN BE CONFUSING.

02:15:10.402 --> 02:15:12.070
YOUR STAFF ASKED ME QUESTIONS

02:15:12.137 --> 02:15:13.271
ABOUT THIS, BUT I WAS SORT OF

02:15:13.338 --> 02:15:15.173
THINKING IF YOU IF YOU REDUCE

02:15:15.240 --> 02:15:17.476
SETTLEMENT VALUE FROM, SAY, $55

02:15:17.542 --> 02:15:19.644
TO $50, YOU'VE SAVED 10%. YOU

02:15:19.711 --> 02:15:21.112
COULD ALSO SAY FRAME THAT AS

02:15:21.179 --> 02:15:22.113
SAVING, REDUCING OVERALL COSTS

02:15:22.180 --> 02:15:26.084
BY 5%. WHAT IS IT ABOUT THAT

02:15:26.151 --> 02:15:30.255
STATISTICS? LIES, DAMN LIES AND

02:15:30.322 --> 02:15:33.258
STATISTICS. THANK YOU. LARGER

02:15:33.325 --> 02:15:34.359
SAVINGS. IF YOU BELIEVE THAT

02:15:34.426 --> 02:15:36.828
THE STATUS QUO, BECAUSE OF THE

02:15:36.895 --> 02:15:37.863
LITIGATION, THE DECISIONS THAT

02:15:37.929 --> 02:15:40.065
HAVE COME DOWN IN COURT, MEAN

02:15:40.131 --> 02:15:42.234
THAT 70% IS NOW THE STATUS QUO.

02:15:42.300 --> 02:15:46.204
YOU'D SAVE MORE. AND IF YOU

02:15:46.271 --> 02:15:47.272
ELIMINATE AND ACTUALLY, I WANT

02:15:47.339 --> 02:15:49.241
TO SAY THIS IS AN ERROR ON THE

02:15:49.307 --> 02:15:50.509
SLIDE AND I APOLOGIZE FOR IT.

02:15:50.575 --> 02:15:51.543
CUSTOMER SAVINGS ARE SMALLER.

02:15:51.610 --> 02:15:53.178
THIS IS THE TOTAL CUSTOMER

02:15:53.245 --> 02:15:54.212
SAVINGS FROM FROM ELIMINATING

02:15:54.279 --> 02:15:56.982
WILDFIRE LIABILITY. THE SAVINGS

02:15:57.048 --> 02:16:04.523
WOULD BE 165 $1.65 FOR PG AND E,

02:16:04.589 --> 02:16:08.894
RANGING UP TO $16.50 FOR LA

02:16:08.960 --> 02:16:10.262
DEPARTMENT OF WATER AND POWER

02:16:10.328 --> 02:16:11.796
PER MONTH FOR 30 YEARS. BUT

02:16:11.863 --> 02:16:13.732
THAT'S FROM A TOTAL ELIMINATION.

02:16:13.798 --> 02:16:15.634
AND AS NANCY SAID, WE ARE IN A

02:16:15.700 --> 02:16:17.135
DELICATE PLACE IN THE INSURANCE

02:16:17.202 --> 02:16:19.237
MARKET. I WOULD WHOLEHEARTEDLY

02:16:19.304 --> 02:16:21.139
AGREE WITH HER. AND I'M GOING

02:16:21.206 --> 02:16:22.307
TO STEAL THAT METAPHOR ABOUT

02:16:22.374 --> 02:16:23.975
THE CANE, JUST LIKE I STOLE THE

02:16:24.042 --> 02:16:25.410
LAST ONE SHE USED IN THIS

02:16:25.477 --> 02:16:27.212
RESPECT ABOUT THE FIRST DOSE OF

02:16:27.279 --> 02:16:28.346
ANTIBIOTICS. AND I THINK THAT'S

02:16:28.413 --> 02:16:29.414
ANOTHER WAY TO THINK ABOUT

02:16:29.481 --> 02:16:30.582
WHERE WE ARE IN INSURANCE IS

02:16:30.649 --> 02:16:32.417
THE SYSTEM HAS WE'RE AT THE

02:16:32.484 --> 02:16:33.518
POINT WHERE WE HAVE A HIGH

02:16:33.585 --> 02:16:35.353
FEVER. WE'VE TAKEN A SINGLE

02:16:35.420 --> 02:16:36.521
DOSE, AND WE GOT FOUR DOSES

02:16:36.588 --> 02:16:38.423
LEFT OR MAYBE SIX LEFT TO

02:16:38.490 --> 02:16:40.258
ACTUALLY GET HEALTHY AGAIN. AND

02:16:40.325 --> 02:16:42.327
AND SO WE'RE AT THAT FRAGILE

02:16:42.394 --> 02:16:43.528
PLACE. IF YOU STOP TAKING YOUR

02:16:43.595 --> 02:16:44.529
ANTIBIOTICS AFTER ONE DOSE,

02:16:44.596 --> 02:16:46.364
YOU'RE NOT GOING TO GET BETTER,

02:16:46.431 --> 02:16:47.432
RIGHT? THE INFECTION WILL COME

02:16:47.499 --> 02:16:53.271
ROARING BACK. ANOTHER NOTABLE

02:16:53.338 --> 02:16:54.606
THING, YOU KNOW, THAT I WILL

02:16:54.673 --> 02:16:55.707
MENTION THOUGH, IS THAT ALL OF

02:16:55.774 --> 02:16:57.475
THIS WOULD INCREASE THE

02:16:57.542 --> 02:16:58.843
DURABILITY. THE CHANGES TO

02:16:58.910 --> 02:17:00.111
SUBROGATION THAT REDUCE PAYOUTS

02:17:00.178 --> 02:17:01.379
WILL INCREASE THE DURABILITY OF

02:17:01.446 --> 02:17:04.282
THE CONTINUATION ACCOUNT. SO IT

02:17:04.349 --> 02:17:06.818
CHANGES KIND OF HOW UTILITY

02:17:06.885 --> 02:17:08.954
CUSTOMERS AND SHAREHOLDERS PAY

02:17:09.020 --> 02:17:11.089
FOR WILDFIRES IN SOME SENSE.

02:17:11.156 --> 02:17:12.958
ALSO BECAUSE THE CONTINUATION

02:17:13.024 --> 02:17:14.292
ACCOUNT YOU CAN THINK OF AS

02:17:14.359 --> 02:17:15.827
LIKE BUYING INSURANCE, IT'S A

02:17:15.894 --> 02:17:17.228
PREPAYMENT RATHER THAN A

02:17:17.295 --> 02:17:19.397
POST-EVENT ASSESSMENT ON

02:17:19.464 --> 02:17:21.600
CUSTOMERS, LIKE A

02:17:21.666 --> 02:17:22.601
SECURITIZATION. SO IT'LL MAKE

02:17:22.667 --> 02:17:23.802
IT, IT'LL MAKE US IT'LL SHIFT

02:17:23.868 --> 02:17:26.671
US FROM TOWARDS PREPAYMENT OF

02:17:26.738 --> 02:17:28.740
LIABILITIES AND AWAY FROM

02:17:28.807 --> 02:17:29.874
POST-EVENT PAYMENT OF

02:17:29.941 --> 02:17:34.913
LIABILITIES. NEXT SLIDE. HERE'S

02:17:34.980 --> 02:17:36.314
KIM NOVAK FIGHTING THE SAME

02:17:36.381 --> 02:17:41.720
FIRE ON HER WOOD SHAKE ROOF. SO

02:17:41.786 --> 02:17:43.488
SUBROGATION COSTS ARE AN

02:17:43.555 --> 02:17:44.589
IMPORTANT CONTRIBUTOR TO

02:17:44.656 --> 02:17:46.358
OVERALL UTILITY WILDFIRE

02:17:46.424 --> 02:17:49.260
LIABILITY. I USE THE NUMBER 40%.

02:17:49.327 --> 02:17:50.695
IT COULD BE HIGHER IF THE

02:17:50.762 --> 02:17:52.497
SUBROGATION SETTLEMENTS GO UP.

02:17:52.564 --> 02:17:54.065
RIGHT. THAT'S THAT THAT THAT

02:17:54.132 --> 02:17:56.101
WILL SHIFT THAT TOWARD A HIGHER

02:17:56.167 --> 02:17:58.737
PERCENTAGE OF RECOVERIES. THE

02:17:58.803 --> 02:17:59.771
MAGNITUDE REALLY DEPENDS ON

02:17:59.838 --> 02:18:01.139
FACTORS THAT HAVE VARIED

02:18:01.206 --> 02:18:02.974
ENORMOUSLY THROUGH TIME AND

02:18:03.041 --> 02:18:05.477
WILL CHANGE DEPENDING ON OTHER

02:18:05.543 --> 02:18:06.544
DECISIONS THAT THE LEGISLATURE

02:18:06.611 --> 02:18:08.380
AND THIS GOVERNOR OR THE NEW

02:18:08.446 --> 02:18:10.915
GOVERNOR MAY MAKE RELATIVE TO

02:18:10.982 --> 02:18:12.651
HOW WE SOCIALIZE THE COSTS OF

02:18:12.717 --> 02:18:14.586
WILDFIRE IN CALIFORNIA AND HOW

02:18:14.653 --> 02:18:17.722
MUCH WE INVEST IN REDUCING RISK

02:18:17.789 --> 02:18:19.391
BY HARDENING. I HATE THAT WORD

02:18:19.457 --> 02:18:20.592
HARDENING COMMUNITIES, BUILDING

02:18:20.659 --> 02:18:22.027
SAFER COMMUNITIES, RETROFITTING

02:18:22.093 --> 02:18:23.161
COMMUNITIES SO THAT THEY'RE

02:18:23.228 --> 02:18:27.866
SAFE PLACES TO LIVE. SO

02:18:27.932 --> 02:18:29.601
CUSTOMER BILL IMPACTS, I THINK

02:18:29.668 --> 02:18:31.403
I'VE GIVEN YOU LIKE A FEEL FOR

02:18:31.469 --> 02:18:32.504
THAT. THAT'S WHAT I WAS TRYING

02:18:32.570 --> 02:18:34.439
TO DO. BUT I WOULD EMPHASIZE

02:18:34.506 --> 02:18:35.440
THAT THEY'RE GOING TO VARY.

02:18:35.507 --> 02:18:37.308
THEY COULD VARY A LOT DEPENDING

02:18:37.375 --> 02:18:38.543
ON HOW ALL OF THESE FACTORS

02:18:38.610 --> 02:18:40.445
PLAY OUT FOR A PARTICULAR FIRE

02:18:40.512 --> 02:18:41.846
OR SERIES OF FIRES OVER YEARS.

02:18:41.913 --> 02:18:46.584
THANK YOU. THANK YOU. QUESTIONS

02:18:46.651 --> 02:18:48.653
FROM MEMBERS FOR EITHER OR BOTH

02:18:48.720 --> 02:18:51.623
OF OUR PANELISTS. MR. ROGERS,

02:18:51.690 --> 02:18:52.957
JUST AS A POINT OF

02:18:53.024 --> 02:18:55.160
CLARIFICATION. SO I APPRECIATE

02:18:55.226 --> 02:18:57.696
SEEING SOME REAL NUMBERS ON THE

02:18:57.762 --> 02:18:59.464
IMPACT THAT IT COULD HAVE IF

02:18:59.531 --> 02:19:02.734
THERE WAS ANOTHER WILDFIRE.

02:19:02.801 --> 02:19:04.202
WHEN WE DISCUSSED THE

02:19:04.269 --> 02:19:06.304
ELIMINATION OF SUBROGATION,

02:19:06.371 --> 02:19:08.106
THERE IS NO GUARANTEE THAT

02:19:08.173 --> 02:19:09.874
UTILITY RATES WOULD GO DOWN.

02:19:09.941 --> 02:19:11.376
WE'RE TALKING MORE ABOUT AN

02:19:11.443 --> 02:19:13.845
AVOIDANCE OF A FUTURE INCREASE

02:19:13.912 --> 02:19:22.887
RELATIVE TO WILDFIRES. THAT'S

02:19:22.954 --> 02:19:24.622
CORRECT. SO THIS IS SO WHEN WE

02:19:24.689 --> 02:19:27.225
TALK ABOUT SUBROGATION WILL BE

02:19:27.292 --> 02:19:31.930
ABSORBED AS MOST LIKELY, YOU

02:19:31.996 --> 02:19:33.665
KNOW, EITHER BY THE WILDFIRE

02:19:33.732 --> 02:19:34.833
FUND, RIGHT? THAT'S IN THE

02:19:34.899 --> 02:19:36.000
FIRST INSTANCE. AND THEN IF THE

02:19:36.067 --> 02:19:38.403
FUND IS EXHAUSTED, IT'LL BE

02:19:38.470 --> 02:19:41.272
ABSORBED EITHER BY SHAREHOLDERS

02:19:41.339 --> 02:19:44.509
OR RATEPAYERS. YOU KNOW, THE

02:19:44.576 --> 02:19:45.944
QUESTION YOU KNOW, A QUESTION I

02:19:46.010 --> 02:19:49.447
WOULD ASK IS, AND WE'LL HAVE TO

02:19:49.514 --> 02:19:52.016
SEE LIKE HOW THE PUC EVALUATES

02:19:52.083 --> 02:19:54.152
PRUDENCE FOR A PARTICULAR FIRE

02:19:54.219 --> 02:19:55.653
OR, YOU KNOW, IN THE CONTEXT OF

02:19:55.720 --> 02:19:56.888
ALL THE WORK THAT'S BEEN GOING

02:19:56.955 --> 02:19:58.690
ON. RIGHT. SO I WOULD IT'S

02:19:58.757 --> 02:20:00.692
WORTH NOTING THAT IN THE CASE

02:20:00.759 --> 02:20:04.295
OF THE THOMAS FIRE, THE PUC

02:20:04.362 --> 02:20:06.097
FOUND THAT THE UTILITY HAD BEEN

02:20:06.164 --> 02:20:08.366
PRUDENT. THAT WAS REALLY BEFORE

02:20:08.433 --> 02:20:10.402
THE TIME OF MANY OF THE

02:20:10.468 --> 02:20:11.469
MITIGATION STRATEGIES THAT ARE

02:20:11.536 --> 02:20:14.439
MOST COMMON TODAY, LIKE FAST

02:20:14.506 --> 02:20:16.174
TRIP SETTINGS, WHICH IS

02:20:16.241 --> 02:20:17.275
PROBABLY THE MOST EFFECTIVE

02:20:17.342 --> 02:20:18.376
OPERATIONAL STRATEGY, EVEN MORE

02:20:18.443 --> 02:20:20.879
EFFECTIVE THAN PSPS. AND OF

02:20:20.945 --> 02:20:22.580
COURSE, BEFORE ALL THE GRID

02:20:22.647 --> 02:20:23.548
HARDENING THAT'S HAPPENED OVER

02:20:23.615 --> 02:20:24.949
THE LAST FIVE YEARS, THERE ARE

02:20:25.016 --> 02:20:27.318
A NUMBER OF DECISIONS COMING UP,

02:20:27.385 --> 02:20:29.854
WOOLSEY, BUT ALSO LIBERTY,

02:20:29.921 --> 02:20:31.256
UTILITIES, FIRE, I BELIEVE, AS

02:20:31.322 --> 02:20:32.557
WELL. THAT WILL BE INTERESTING

02:20:32.624 --> 02:20:34.559
KIND OF VIEW VIEWS INTO HOW THE

02:20:34.626 --> 02:20:36.661
PUC THINKS ABOUT THIS. BUT BUT

02:20:36.728 --> 02:20:39.197
MY ASSUMPTION IN THE END, IF

02:20:39.264 --> 02:20:40.999
EVEN IF THERE'S A DISALLOWANCE

02:20:41.065 --> 02:20:42.767
THAT'S GOING TO HAVE AN IMPACT

02:20:42.834 --> 02:20:44.969
ON THE COST OF CAPITAL FOR

02:20:45.036 --> 02:20:45.737
UTILITIES, WHICH WILL

02:20:45.804 --> 02:20:46.771
ULTIMATELY PROBABLY FEED BACK

02:20:46.838 --> 02:20:48.540
INTO RATES VIA ANOTHER

02:20:48.606 --> 02:20:50.708
MECHANISM. GOTCHA. KIND OF A

02:20:50.775 --> 02:20:52.544
QUESTION FOR BOTH OF YOU. DO

02:20:52.610 --> 02:20:56.815
YOU SEE THE RISK BEING SPREAD

02:20:56.881 --> 02:20:58.283
RELATIVELY EVENLY, EVENLY

02:20:58.349 --> 02:21:00.051
THROUGHOUT THOSE TERRITORIES,

02:21:00.118 --> 02:21:02.187
OR ESPECIALLY AS IT PERTAINS TO

02:21:02.253 --> 02:21:04.122
THE FAIR PLAN, MIGHT BE A KIND

02:21:04.189 --> 02:21:06.191
OF A GREAT STARTING POINT. DO

02:21:06.257 --> 02:21:12.263
YOU SEE THAT THE COST IS BORNE

02:21:12.330 --> 02:21:14.532
MORE BY THE AREAS THAT HAVE THE

02:21:14.599 --> 02:21:17.302
GREATER RISK, OR BY AREAS THAT

02:21:17.368 --> 02:21:20.939
HAVE THE GREATER PROPERTY VALUE?

02:21:21.005 --> 02:21:22.841
WHEN YOU SAY COST, CAN YOU CAN

02:21:22.907 --> 02:21:24.108
YOU BE A LITTLE BIT MORE

02:21:24.175 --> 02:21:25.143
SPECIFIC ABOUT WHAT YOU'RE

02:21:25.210 --> 02:21:26.377
ASKING? YEAH. THE POTENTIAL FOR

02:21:26.444 --> 02:21:30.315
RATE INCREASES. FOR INSURANCE,

02:21:30.381 --> 02:21:32.050
FOR INSURANCE. OKAY. INSURANCE

02:21:32.116 --> 02:21:36.387
RATE INCREASES IF WE SHIFTED

02:21:36.454 --> 02:21:37.856
SUBROGATION DOLLARS FROM

02:21:37.922 --> 02:21:40.425
UTILITIES TO POLICYHOLDERS, THE

02:21:40.491 --> 02:21:43.995
COST WOULD BE BORNE BY THE MOST,

02:21:44.062 --> 02:21:45.396
WHILE THE PEOPLE WHO ARE

02:21:45.463 --> 02:21:47.599
ALREADY PAYING, YOU KNOW, THE

02:21:47.665 --> 02:21:49.767
HIGHEST WILDFIRE PREMIUMS. SO

02:21:49.834 --> 02:21:51.502
THEN SO THAT ASSUMES THEN THAT

02:21:51.569 --> 02:21:54.105
THAT IS BASED ON RISK FACTORS

02:21:54.172 --> 02:21:55.907
WITHIN A COMMUNITY OR A ZIP

02:21:55.974 --> 02:21:58.076
CODE. OR DO YOU MEAN BY

02:21:58.142 --> 02:22:00.211
PROPERTY VALUE? ARE THEY DO

02:22:00.278 --> 02:22:01.646
THEY HAVE THE MOST RISK?

02:22:01.713 --> 02:22:03.047
BECAUSE IF YOU THINK ABOUT TWO

02:22:03.114 --> 02:22:04.849
HOUSES SIDE BY SIDE WITH THE

02:22:04.916 --> 02:22:09.254
SAME RISK, ONE'S GOING TO COST,

02:22:09.320 --> 02:22:11.022
YOU KNOW, 1.5 MILLION TO

02:22:11.089 --> 02:22:12.790
REPLACE, THE OTHER ONE IS GOING

02:22:12.857 --> 02:22:15.793
TO COST 750,000 TO REPLACE THE,

02:22:15.860 --> 02:22:18.162
THE $1.5 MILLION HOUSE PAYS A

02:22:18.229 --> 02:22:19.631
HIGHER PREMIUM. SO THE

02:22:19.697 --> 02:22:21.065
PERCENTAGE MIGHT CHANGE BY THE

02:22:21.132 --> 02:22:22.901
SAME AMOUNT, BUT THE DOLLARS

02:22:22.967 --> 02:22:24.335
WILL BE HIGHER FOR THE HIGHER

02:22:24.402 --> 02:22:26.838
VALUE HOMES. SO THEN LAST

02:22:26.905 --> 02:22:28.306
QUESTION. SO AS WE'RE TALKING

02:22:28.373 --> 02:22:31.209
ABOUT WHO ULTIMATELY PAYS, IS

02:22:31.276 --> 02:22:33.711
IT FAIR TO SAY THAT UNDER THE

02:22:33.778 --> 02:22:36.948
CURRENT SYSTEM, WHERE THERE'S A

02:22:37.015 --> 02:22:37.949
SIGNIFICANT PORTION THAT IS

02:22:38.016 --> 02:22:40.151
PICKED UP BY THE IOUS, THAT

02:22:40.218 --> 02:22:43.054
THAT ACTUALLY IN FUNCTION IS

02:22:43.121 --> 02:22:46.991
MORE SPREAD ACROSS ALL USERS

02:22:47.058 --> 02:22:49.160
AND NOT AS NARROWLY FOCUSED ON

02:22:49.227 --> 02:22:50.561
THE FOLKS WITH THE HIGHEST

02:22:50.628 --> 02:22:52.030
FACTORS OR THE HIGHEST PROPERTY

02:22:52.096 --> 02:22:54.165
VALUES, BUT A SHIFT IN

02:22:54.232 --> 02:22:55.800
SUBROGATION THAT PUSHES MORE OF

02:22:55.867 --> 02:22:58.870
THE LIABILITY ONTO UTILITIES

02:22:58.937 --> 02:23:01.739
WOULD, IN ESSENCE, TARGET THAT

02:23:01.806 --> 02:23:04.609
MORE ON WHERE THE RISK LIES.

02:23:04.676 --> 02:23:08.246
THE SUBSIDIZATION, I GUESS, IS

02:23:08.313 --> 02:23:11.149
IS MOSTLY BENEFITING THE HIGHER

02:23:11.215 --> 02:23:13.351
RISK, HIGHER VALUE HOMES IN OUR

02:23:13.418 --> 02:23:16.154
CURRENT SYSTEM RIGHT NOW. SO

02:23:16.220 --> 02:23:17.355
ELIMINATING THEM, WOULD THEY?

02:23:17.422 --> 02:23:19.390
THEY WOULDN'T SOAK UP THE COST

02:23:19.457 --> 02:23:22.260
MORE. WHO'S FROM THE UTILITY

02:23:22.327 --> 02:23:23.361
CUSTOMERS. WHICH ONES ARE

02:23:23.428 --> 02:23:27.365
PAYING. THAT'S A QUESTION. IT'S

02:23:27.432 --> 02:23:30.902
A UTILITY RATES ARE LARGELY IN

02:23:30.969 --> 02:23:32.704
CALIFORNIA VOLUMETRIC. SO IT

02:23:32.770 --> 02:23:34.539
REALLY JUST DEPENDS. YOU KNOW,

02:23:34.605 --> 02:23:36.708
THE PEOPLE PAYING THE MOST. NOW

02:23:36.774 --> 02:23:39.944
FOR IN THE CURRENT SYSTEM

02:23:40.011 --> 02:23:41.379
ARGUABLY ARE FOLKS THAT LIVE IN

02:23:41.446 --> 02:23:43.881
LOW RISK PLACES THAT ARE HOT.

02:23:43.948 --> 02:23:51.122
SO FRESNO PAYS A LOT. JUST

02:23:51.189 --> 02:23:53.257
BECAUSE AIR CONDITIONING IS, IS

02:23:53.324 --> 02:23:56.127
A HUGE LOAD, A HUGE PART OF AN

02:23:56.194 --> 02:23:58.663
ELECTRICITY BILL IN FRESNO.

02:23:58.730 --> 02:24:00.798
WHEREAS I'LL JUST TAKE ME. SO

02:24:00.865 --> 02:24:02.333
MY I LIVE IN MILL VALLEY, WHICH

02:24:02.400 --> 02:24:05.203
IS A AFFLUENT, HIGH VALUE, HIGH

02:24:05.269 --> 02:24:06.904
REAL ESTATE VALUE, ALSO HIGH

02:24:06.971 --> 02:24:09.073
FIRE RISK, PART OF CALIFORNIA.

02:24:09.140 --> 02:24:10.908
AND I BENEFIT FROM THE FOG THAT

02:24:10.975 --> 02:24:12.343
COMES IN EVERY NIGHT FROM THE

02:24:12.410 --> 02:24:13.745
FROM THE PACIFIC. SO I DON'T

02:24:13.811 --> 02:24:14.779
ACTUALLY HAVE AIR CONDITIONING

02:24:14.846 --> 02:24:17.348
IN MY HOUSE. SO MY ELECTRICITY

02:24:17.415 --> 02:24:19.117
BILL IS QUITE LOW. AND I ALSO

02:24:19.183 --> 02:24:20.952
HAVE A MODERN, RELATIVELY HIGH

02:24:21.019 --> 02:24:22.420
QUALITY HOUSE BECAUSE I'M

02:24:22.487 --> 02:24:23.755
FORTUNATE TO EARN A SALARY

02:24:23.821 --> 02:24:27.058
WHERE I CAN AFFORD THAT. SO MY

02:24:27.125 --> 02:24:29.627
BILL IS QUITE LOW. THAT MEANS I

02:24:29.694 --> 02:24:31.429
PAY A VERY SMALL SHARE OF THESE

02:24:31.496 --> 02:24:32.530
COSTS RELATIVE TO SOMEONE WHO

02:24:32.597 --> 02:24:34.665
LIVES IN FRESNO, WHO MAYBE IS

02:24:34.732 --> 02:24:36.067
LOW INCOME AND HAS LOWER

02:24:36.134 --> 02:24:37.168
QUALITY HOUSING, BUT IS

02:24:37.235 --> 02:24:38.603
DEPENDENT ON AIR CONDITIONING,

02:24:38.669 --> 02:24:40.038
THEIR HOUSE IS NOT TIGHT AND

02:24:40.104 --> 02:24:41.839
EFFICIENT. SO THERE AND SO, SO

02:24:41.906 --> 02:24:43.608
THEIR THEIR BILL CAN BE VERY

02:24:43.674 --> 02:24:44.809
HIGH. AND IF YOU WANT TO SEE

02:24:44.876 --> 02:24:46.010
NUMBERS THAT ILLUSTRATE THIS,

02:24:46.077 --> 02:24:47.678
WE HAVE SOME WORK RELATED TO

02:24:47.745 --> 02:24:49.814
THE CLIMATE CREDIT WHERE WE LAY

02:24:49.881 --> 02:24:51.949
THIS OUT VERY CLEARLY. JUST

02:24:52.016 --> 02:24:55.186
JUST THE HOW BIG THE, THE

02:24:55.253 --> 02:24:56.988
ELECTRICITY BILLS ARE IN THE

02:24:57.055 --> 02:24:58.423
SUMMERTIME IN THE FOUR SUMMER

02:24:58.489 --> 02:25:00.958
MONTHS FOR THOSE CUSTOMERS. AND

02:25:01.025 --> 02:25:02.360
THOSE PEOPLE ARE PICKING UP AN

02:25:02.427 --> 02:25:04.028
EXTRA SHARE OF THE COST OF

02:25:04.095 --> 02:25:05.229
WILDFIRE RISK. IF SUBJUGATION

02:25:05.296 --> 02:25:08.132
WERE TOTALLY ELIMINATED, YOU'D

02:25:08.199 --> 02:25:10.301
BE SHIFTING IT TO THE HIGH RISK

02:25:10.368 --> 02:25:11.736
PLACES BECAUSE OF THE WAY THAT

02:25:11.803 --> 02:25:13.204
INSURANCE PRICING WORKS AND

02:25:13.271 --> 02:25:18.609
ONTO THE HIGHER VALUE HOMES.

02:25:18.676 --> 02:25:22.513
YEAH. THAT'S HELPFUL. THANK YOU.

02:25:22.580 --> 02:25:25.783
SO WE ARE TRYING, I THINK, TO

02:25:25.850 --> 02:25:27.585
KIND OF MAKE A HOLISTIC PICTURE

02:25:27.652 --> 02:25:29.387
OF SOMETHING THAT HAS A LOT OF

02:25:29.454 --> 02:25:32.623
MOVING PARTS AS WE, AS POLICY

02:25:32.690 --> 02:25:34.792
MAKERS ARE CONSIDERING A SET OF

02:25:34.859 --> 02:25:37.228
OPTIONS BEFORE US, WHAT PIECES

02:25:37.295 --> 02:25:41.199
OF AND AS YOU AS ACADEMICS, AS

02:25:41.265 --> 02:25:42.934
AN ACTUARY, LIKE WHAT PIECES OF

02:25:43.000 --> 02:25:45.236
DATA DO YOU WISH THAT YOU HAD

02:25:45.303 --> 02:25:47.472
TO DO THIS WORK, AND WHICH

02:25:47.538 --> 02:25:48.840
PIECES OF DATA DO YOU WISH THAT

02:25:48.906 --> 02:25:50.675
WE HAD TO DO THIS WORK? LIKE

02:25:50.741 --> 02:25:52.477
WHERE? WHERE ARE THE GAPS IN

02:25:52.543 --> 02:25:54.579
OUR UNDERSTANDING, AND HOW

02:25:54.645 --> 02:25:56.214
MIGHT WE GO ABOUT FILLING THOSE

02:25:56.280 --> 02:26:06.124
IN? I MEAN, I THINK NANCY'S

02:26:06.190 --> 02:26:08.926
TESTIMONY ALREADY ALLUDED TO

02:26:08.993 --> 02:26:10.061
ONE OF THE GAPS IN OUR

02:26:10.128 --> 02:26:11.129
UNDERSTANDING, WHICH IS JUST

02:26:11.195 --> 02:26:13.598
WHAT WHAT ARE THESE SETTLEMENTS,

02:26:13.664 --> 02:26:15.133
RIGHT? WHAT ARE THE ACTUAL

02:26:15.199 --> 02:26:16.868
VALUES THAT ARE, THAT ARE AT

02:26:16.934 --> 02:26:19.070
WHICH UTILITIES AND INSURERS

02:26:19.137 --> 02:26:20.872
ARE, ARE SETTLING CLAIMS? AND,

02:26:20.938 --> 02:26:22.306
YOU KNOW, IF WE HAD MORE

02:26:22.373 --> 02:26:23.307
COMPLETE INFORMATION ABOUT THAT,

02:26:23.374 --> 02:26:24.775
WE COULD MAYBE UNDERSTAND MORE

02:26:24.842 --> 02:26:27.311
ABOUT THE CAUSES FOR THE

02:26:27.378 --> 02:26:29.213
VARIATION. AND THEN IN TURN,

02:26:29.280 --> 02:26:32.350
WHAT YOU MIGHT OR MIGHT NOT DO

02:26:32.416 --> 02:26:35.219
TO AFFECT THOSE SETTLEMENT

02:26:35.286 --> 02:26:38.122
VALUES. I'D JUST SAY ONE THING

02:26:38.189 --> 02:26:42.860
THAT, YOU KNOW, I THINK I'M

02:26:42.927 --> 02:26:43.494
FORGETTING WHICH MEMBER

02:26:43.561 --> 02:26:44.562
MENTIONED THIS, BUT REINSURERS

02:26:44.629 --> 02:26:46.364
ARE VERY IMPORTANT IN THIS

02:26:46.430 --> 02:26:48.900
PROCESS. THE SUBROGATION

02:26:48.966 --> 02:26:52.136
SETTLEMENTS FLOW FIRST TO THE

02:26:52.203 --> 02:26:53.237
INSURED PARTY. THEY GET THEIR

02:26:53.304 --> 02:26:54.705
DEDUCTIBLE BACK, BUT THEN THE

02:26:54.772 --> 02:26:56.340
LION'S SHARE OF THE MONEY GOES

02:26:56.407 --> 02:26:57.642
TO REINSURERS. THAT'S AND

02:26:57.708 --> 02:26:59.510
THAT'S AND THEN THE THE BENEFIT

02:26:59.577 --> 02:27:02.313
TO FUTURE TO POLICYHOLDERS IS

02:27:02.380 --> 02:27:04.382
REDUCED REINSURANCE COSTS.

02:27:04.448 --> 02:27:05.583
ANOTHER THING THAT IS VERY HARD

02:27:05.650 --> 02:27:07.418
TO FIGURE OUT THOUGH IS LIKE,

02:27:07.485 --> 02:27:08.719
HOW DOES THAT ACTUALLY WORK?

02:27:08.786 --> 02:27:11.222
HOW DOES THE CREDIT THAT'S

02:27:11.289 --> 02:27:13.791
THAT'S GIVEN IN REINSURANCE

02:27:13.858 --> 02:27:18.796
PRICES AFFECT PRIMARY INSURANCE

02:27:18.863 --> 02:27:21.332
PREMIUM COST, PARTICULARLY IN A

02:27:21.399 --> 02:27:23.167
CONTEXT WHERE, YOU KNOW, WE

02:27:23.234 --> 02:27:25.670
HAVE SAID AS A STATE THAT ONLY

02:27:25.736 --> 02:27:28.606
CALIFORNIA REINSURANCE COST CAN

02:27:28.673 --> 02:27:30.675
BE INCLUDED IN OUR POLICIES,

02:27:30.741 --> 02:27:32.376
WHICH MAKES SENSE WHEN YOU SAY

02:27:32.443 --> 02:27:34.278
IT THAT WAY. BUT THE REALITY IS

02:27:34.345 --> 02:27:36.113
THAT THE NATIONAL INSURERS HAVE

02:27:36.180 --> 02:27:37.515
NATIONAL REINSURANCE PROGRAMS,

02:27:37.582 --> 02:27:39.116
AND THAT'S A GOOD THING BECAUSE

02:27:39.183 --> 02:27:40.718
IT REDUCES THE COST OF

02:27:40.785 --> 02:27:41.852
REINSURANCE, BECAUSE IT

02:27:41.919 --> 02:27:43.287
INCREASES BOTH GEOGRAPHIC AND

02:27:43.354 --> 02:27:45.489
PERIL DIVERSITY, WHICH LOWERS

02:27:45.556 --> 02:27:48.659
COSTS. BUT BUT SO HOW A CREDIT

02:27:48.726 --> 02:27:51.229
FOR CALIFORNIA SPECIFIC

02:27:51.295 --> 02:27:52.663
SUBROGATION, WHICH IS WHERE A

02:27:52.730 --> 02:27:53.731
LOT OF THE SUBROGATION COMES

02:27:53.798 --> 02:27:55.933
FROM BECAUSE OF OUR INVERSE

02:27:56.000 --> 02:27:57.635
CONDEMNATION LIABILITY

02:27:57.702 --> 02:27:58.803
STRUCTURE HERE, AND BECAUSE

02:27:58.869 --> 02:28:00.204
THERE ARE SO MANY HOUSES AT

02:28:00.271 --> 02:28:01.973
RISK FROM WILDFIRE AND THE

02:28:02.039 --> 02:28:03.407
LOSSES HAVE BEEN SO LARGE,

02:28:03.474 --> 02:28:05.643
RIGHT? HOW THAT AFFECTS THE

02:28:05.710 --> 02:28:07.445
COST OF A NATIONAL REINSURANCE

02:28:07.511 --> 02:28:09.547
PROGRAM THAT'S THEN FED BACK

02:28:09.614 --> 02:28:12.116
INTO CALIFORNIA. PREMIUM COST

02:28:12.183 --> 02:28:16.020
IS A VERY COMPLICATED PROCESS,

02:28:16.087 --> 02:28:17.855
AND IT'S TO SOME EXTENT MARKET

02:28:17.922 --> 02:28:21.092
DRIVEN BECAUSE REINSURERS AND

02:28:21.158 --> 02:28:22.693
AND PRIMARIES ARE SHOPPING

02:28:22.760 --> 02:28:23.694
AROUND LIKE THEY'RE THEY'RE

02:28:23.761 --> 02:28:25.563
TRYING TO FIND THE BEST DEAL IN

02:28:25.630 --> 02:28:28.766
THAT TRANSACTION PROCESS. NANCY

02:28:28.833 --> 02:28:31.302
IS A WORLD LEADER ON THAT ISSUE.

02:28:31.369 --> 02:28:33.204
SO MAYBE I SHOULD LIKE, SHUT UP

02:28:33.271 --> 02:28:35.439
AND LET HER TALK. OKAY. THAT

02:28:35.506 --> 02:28:37.642
WAS HELPFUL. THANK YOU. NOT THE

02:28:37.708 --> 02:28:40.945
SHUT UP PART. SO YEAH, THE I,

02:28:41.012 --> 02:28:43.014
I'M GOING TO ANSWER WITH WHAT I

02:28:43.080 --> 02:28:44.849
THINK IS KNOWABLE AND NOT WHAT

02:28:44.915 --> 02:28:45.983
THE INSURANCE INDUSTRY IS

02:28:46.050 --> 02:28:47.718
WILLING TO GIVE YOU. YOU CAN

02:28:47.785 --> 02:28:49.420
TALK TO SOME OF THE FOLKS

02:28:49.487 --> 02:28:50.554
BEHIND ME ABOUT THAT. I THINK

02:28:50.621 --> 02:28:53.824
WHAT IS KNOWABLE IS SUBROGATION

02:28:53.891 --> 02:28:56.360
SETTLEMENTS BY FIRE. WE WE CÁC

02:28:56.427 --> 02:28:58.195
DOLLARS OF SUBROGATION IN THE

02:28:58.262 --> 02:28:59.230
INSURANCE RATE FILINGS, BUT WE

02:28:59.297 --> 02:29:02.166
CAN'T SEE HOW MUCH OF THE TOTAL

02:29:02.233 --> 02:29:04.001
LOSSES WERE FOR SPECIFIC FIRE

02:29:04.068 --> 02:29:05.269
AND HOW MUCH OF THE SUBROGATION

02:29:05.336 --> 02:29:06.470
WAS FROM A SPECIFIC FIRE,

02:29:06.537 --> 02:29:07.471
ESPECIALLY WHEN YOU HAVE

02:29:07.538 --> 02:29:09.273
MULTIPLE FIRES IN A YEAR, SOME

02:29:09.340 --> 02:29:10.441
OF WHICH WERE CAUSED BY

02:29:10.508 --> 02:29:11.242
UTILITIES AND SOME OF WHICH

02:29:11.309 --> 02:29:13.010
WERE NOT CAUSED BY UTILITIES.

02:29:13.077 --> 02:29:14.278
LIKE ALL OF A SUDDEN YOU CAN'T

02:29:14.345 --> 02:29:16.180
SEE ANYTHING IN TERMS OF WHAT

02:29:16.247 --> 02:29:17.982
THE ACTUAL SETTLEMENT WAS. SO

02:29:18.049 --> 02:29:19.417
IF YOU'RE IF YOU'RE TRYING TO

02:29:19.483 --> 02:29:21.552
GET AT NUMBERS, THE KNOWABLE

02:29:21.619 --> 02:29:23.387
NUMBERS, IF YOU CAN GET A

02:29:23.454 --> 02:29:24.789
CONFIDENTIAL DATA CALL OR

02:29:24.855 --> 02:29:25.956
WHATEVER, WOULD BE WHAT WERE

02:29:26.023 --> 02:29:27.992
THE PERCENTAGE SETTLEMENTS FOR

02:29:28.059 --> 02:29:29.460
GIVEN INSURANCE COMPANY FOR A

02:29:29.527 --> 02:29:35.266
GIVEN FIRE AND, AND THEN SOME

02:29:35.333 --> 02:29:39.170
SENSE OF HOW MUCH OF THAT WAS,

02:29:39.236 --> 02:29:42.473
I GUESS, WENT OUT INTO LOSS

02:29:42.540 --> 02:29:44.775
ADJUSTMENT EXPENSE TO ACHIEVE

02:29:44.842 --> 02:29:47.144
THE SETTLEMENT, LIKE YOUR

02:29:47.211 --> 02:29:50.348
PROCESS OF, OF, OF SUBSTITUTING,

02:29:50.414 --> 02:29:52.183
I DON'T KNOW, STATE A STATE

02:29:52.249 --> 02:29:53.884
FUND FOR THE HEDGE FOR WHAT THE

02:29:53.951 --> 02:29:55.219
HEDGE FUNDS DO. LIKE IF THERE'S

02:29:55.286 --> 02:29:56.887
A PROCESS THAT ELIMINATES THE

02:29:56.954 --> 02:29:58.622
NEED FOR HEDGE FUNDS TO BUY UP

02:29:58.689 --> 02:30:01.158
THE, THE SUBROGATION RIGHTS,

02:30:01.225 --> 02:30:03.227
HOW MUCH YOU'VE BEEN TRYING TO

02:30:03.294 --> 02:30:04.428
GET AT SAVINGS WITH THE FIRST

02:30:04.495 --> 02:30:06.230
WITNESS YOU WERE TRYING TO GET

02:30:06.297 --> 02:30:07.398
IT SAVINGS, I THINK GETTING

02:30:07.465 --> 02:30:08.566
GOING TO THE INSURANCE INDUSTRY

02:30:08.632 --> 02:30:09.567
AND FIGURING OUT LIKE, WHAT'S

02:30:09.633 --> 02:30:11.268
THE DELTA BETWEEN THE

02:30:11.335 --> 02:30:12.436
SETTLEMENTS VALUE AND WHAT THEY

02:30:12.503 --> 02:30:14.171
GOT FROM THE HEDGE FUNDS OR

02:30:14.238 --> 02:30:16.307
WHAT THEY HAVE TO PAY ATTORNEYS

02:30:16.374 --> 02:30:18.476
AND WHAT THEY GET TO KEEP TO,

02:30:18.542 --> 02:30:20.711
TO ACTUALLY PUT BACK INTO THEIR,

02:30:20.778 --> 02:30:22.780
YOU KNOW, RATE ADEQUACY. THAT'S,

02:30:22.847 --> 02:30:24.115
THAT'S WHERE YOU CAN GET AT

02:30:24.181 --> 02:30:25.216
SOME OF YOUR SAVINGS THINGS

02:30:25.282 --> 02:30:28.119
WITH YOUR POLICY CHANGES. SO

02:30:28.185 --> 02:30:30.755
THAT WOULD BE ACHIEVABLE. AND

02:30:30.821 --> 02:30:33.290
THEN HOW MUCH HAS BEEN PAID OUT

02:30:33.357 --> 02:30:35.726
TO REINSURERS VERSUS RETAINED

02:30:35.793 --> 02:30:38.295
BY THE INSURANCE COMPANY?

02:30:38.362 --> 02:30:39.263
THAT'S, THAT'S, THAT'S A

02:30:39.330 --> 02:30:41.165
KNOWABLE NUMBER. NOW, WHAT I

02:30:41.232 --> 02:30:43.033
THINK IS UNKNOWABLE IS WHAT DID

02:30:43.100 --> 02:30:44.769
THE REINSURER DO AS FAR AS

02:30:44.835 --> 02:30:47.238
THEIR FUTURE PRICING IN TERMS

02:30:47.304 --> 02:30:49.039
OF, YOU KNOW, CHANGING THE NET

02:30:49.106 --> 02:30:50.508
COST OF REINSURANCE? I THINK

02:30:50.574 --> 02:30:52.343
IT'S IT'S FAIR TO ASSUME THAT

02:30:52.410 --> 02:30:54.145
IF THERE'S A MATERIAL AMOUNT OF

02:30:54.211 --> 02:30:55.546
CEREBRO THAT GOES TO THE

02:30:55.613 --> 02:30:56.647
REINSURERS, THAT IF YOU

02:30:56.714 --> 02:30:57.715
DECREASE THAT AMOUNT, THE COST

02:30:57.782 --> 02:31:00.918
IS GOING TO GO UP. BUT IT'S,

02:31:00.985 --> 02:31:03.687
IT'S, THAT'S, THAT'S ABOUT THE

02:31:03.754 --> 02:31:04.889
BEST ASSUMPTION YOU CAN MAKE.

02:31:04.955 --> 02:31:06.323
YOU CAN'T REALLY DO VERY MUCH

02:31:06.390 --> 02:31:08.859
MORE THAN THAT BECAUSE OF HOW

02:31:08.926 --> 02:31:10.628
COMPLICATED AND SPECIFIC AND

02:31:10.694 --> 02:31:13.564
BESPOKE REINSURANCE PRICING IS.

02:31:13.631 --> 02:31:15.332
AND A LOT OF DIFFERENT THINGS

02:31:15.399 --> 02:31:17.134
ARE NEGOTIATED IN ANY GIVEN

02:31:17.201 --> 02:31:18.569
REINSURANCE CONTRACT AT ANY

02:31:18.636 --> 02:31:20.004
GIVEN TIME FOR ANY GIVEN

02:31:20.070 --> 02:31:21.405
COMPANY. SO YOU'RE NOT GOING TO

02:31:21.472 --> 02:31:22.573
BE ABLE THERE'S THERE'S NOT

02:31:22.640 --> 02:31:23.607
REALLY AN ANSWER TO THE

02:31:23.674 --> 02:31:25.409
QUESTION OF HOW MUCH DID YOU

02:31:25.476 --> 02:31:26.644
CHANGE OUR COST OF REINSURANCE?

02:31:26.710 --> 02:31:27.678
BECAUSE THE SUBROGATION POLICY

02:31:27.745 --> 02:31:32.249
IN CALIFORNIA CHANGED. AND TO

02:31:32.316 --> 02:31:35.419
THAT POINT, AS YOU FLAGGED THE

02:31:35.486 --> 02:31:37.321
THE OPPORTUNITY FOR SAVINGS

02:31:37.388 --> 02:31:39.790
REALLY COMES IN. IF WE CAN

02:31:39.857 --> 02:31:42.092
LOWER TRANSACTION COSTS AND

02:31:42.159 --> 02:31:43.761
KIND OF FRICTION COSTS. WE

02:31:43.828 --> 02:31:45.196
TALKED ABOUT THAT IN THE

02:31:45.262 --> 02:31:47.398
BACKGROUND DOCUMENT AS WELL. IT

02:31:47.465 --> 02:31:48.566
SOUNDS LIKE THERE'S QUITE A BIT

02:31:48.632 --> 02:31:50.501
OF THAT THAT WE DON'T KNOW. I

02:31:50.568 --> 02:31:52.369
MEAN, DO WE HAVE ESTIMATES FOR

02:31:52.436 --> 02:31:55.272
THE THE SCALE OF THOSE

02:31:55.339 --> 02:31:57.808
TRANSACTION AND FRICTION COSTS

02:31:57.875 --> 02:32:02.112
AND THEREFORE POTENTIAL SAVINGS.

02:32:02.179 --> 02:32:04.381
I DON'T I MEAN, I THINK YOU GOT

02:32:04.448 --> 02:32:07.151
THE ANSWER THAT 20% IS HIGH IN

02:32:07.218 --> 02:32:08.552
THE FIRST WHEN YOU ASK THE

02:32:08.619 --> 02:32:13.257
QUESTION THE FIRST TIME TODAY.

02:32:13.324 --> 02:32:16.927
SO MAYBE LESS THAN 20%. BUT

02:32:16.994 --> 02:32:18.662
YEAH, I THINK TALKING TO THE

02:32:18.729 --> 02:32:20.164
INSURANCE COMPANIES IS THE BEST

02:32:20.231 --> 02:32:22.633
WAY TO AND LOOKING AT WHAT LOSS

02:32:22.700 --> 02:32:24.468
ADJUSTMENT EXPENSES THEY'RE,

02:32:24.535 --> 02:32:25.903
THEY'RE LIKE, WHAT ARE THE

02:32:25.970 --> 02:32:27.705
COMPONENTS OF, OF LÀ THAT ARE

02:32:27.771 --> 02:32:29.473
BEING PAID TO SETTLE THE CLAIMS

02:32:29.540 --> 02:32:31.308
WITH POLICYHOLDERS VERSUS

02:32:31.375 --> 02:32:33.444
SELLING CLAIMS AGAINST

02:32:33.511 --> 02:32:34.879
UTILITIES? I DON'T THINK THAT'S

02:32:34.945 --> 02:32:36.313
KNOWABLE RIGHT NOW USING THE

02:32:36.380 --> 02:32:38.883
DATA THAT THAT'S PUBLICLY

02:32:38.949 --> 02:32:40.651
AVAILABLE, BUT I THINK YOU

02:32:40.718 --> 02:32:43.153
MIGHT BE ABLE TO GET AT IT IF

02:32:43.220 --> 02:32:45.022
INSURANCE COMPANIES ARE ABLE TO

02:32:45.089 --> 02:32:48.225
SHARE THAT INFORMATION.

02:32:48.292 --> 02:32:49.727
ANYTHING TO ADD? MR. LARA? NO,

02:32:49.793 --> 02:32:51.395
I MEAN, I THINK IT WOULD BE

02:32:51.462 --> 02:32:53.330
GOOD TO KNOW IT WAS. I'LL JUST

02:32:53.397 --> 02:32:54.832
SAY, YOU KNOW, I AM AN ATTORNEY

02:32:54.899 --> 02:32:59.036
AND I WAS I, I HAVE A TON OF

02:32:59.103 --> 02:33:01.171
RESPECT FOR THE ATTORNEYS THAT

02:33:01.238 --> 02:33:02.573
BRING LARGE CLASS ACTIONS,

02:33:02.640 --> 02:33:03.674
PLAINTIFFS ATTORNEYS, AND

02:33:03.741 --> 02:33:04.742
MANAGE THAT PROCESS. AND I

02:33:04.808 --> 02:33:06.176
UNDERSTAND WHY THEY WORK ON

02:33:06.243 --> 02:33:08.712
CONTINGENCY. I WAS SURPRISED TO

02:33:08.779 --> 02:33:11.248
LEARN THAT SUBROGATION, THE

02:33:11.315 --> 02:33:13.817
SUBROGATION BAR, IS PAID ON

02:33:13.884 --> 02:33:15.586
CONTINGENCY BY VERY LARGE

02:33:15.653 --> 02:33:16.987
COMPANIES, PARTICULARLY WHEN

02:33:17.054 --> 02:33:18.556
THEY'RE SUING ANOTHER VERY

02:33:18.622 --> 02:33:21.392
LARGE COMPANY. THAT SEEMS

02:33:21.458 --> 02:33:22.793
UNUSUAL TO ME, LIKE I'M

02:33:22.860 --> 02:33:24.261
PERFECTLY COMFORTABLE WITH

02:33:24.328 --> 02:33:26.330
ATTORNEYS EARNING SENIOR

02:33:26.397 --> 02:33:28.532
PARTNERS IN LAW FIRMS EARNING

02:33:28.599 --> 02:33:31.402
VERY HIGH BILLABLE HOUR RATES.

02:33:31.468 --> 02:33:33.270
AND I BUT I DO WONDER WHETHER

02:33:33.337 --> 02:33:35.372
THAT BUSINESS MODEL MAKES SENSE

02:33:35.439 --> 02:33:37.541
AND OR IF IT DOES MAKE SENSE

02:33:37.608 --> 02:33:38.976
FOR REASONS THAT, YOU KNOW, I'M

02:33:39.043 --> 02:33:40.811
HAPPY TO HAVE SOMEONE EXPLAIN

02:33:40.878 --> 02:33:44.281
TO ME WHY, WHY THE NUMBERS ARE

02:33:44.348 --> 02:33:45.816
WHAT THEY ARE NOW, IF THAT

02:33:45.883 --> 02:33:47.217
MAKES SENSE, GIVEN THE

02:33:47.284 --> 02:33:48.586
MAGNITUDE OF THE LOSSES, RIGHT?

02:33:48.652 --> 02:33:51.221
IT IS ONE THING IF YOU'RE SUING,

02:33:51.288 --> 02:33:52.623
YOU KNOW, IF YOU'RE IN

02:33:52.690 --> 02:33:54.959
SUBROGATION RELATED TO A CAR

02:33:55.025 --> 02:33:57.328
ACCIDENT OR YOU'RE IF YOU'RE IN

02:33:57.394 --> 02:33:58.429
SUBROGATION, EVEN RELATIVE TO A

02:33:58.495 --> 02:34:00.230
FIRE WHERE 484 STRUCTURES

02:34:00.297 --> 02:34:01.966
BURNED DOWN. BUT IT IS QUITE A

02:34:02.032 --> 02:34:03.067
DIFFERENT THING WHEN YOU'RE

02:34:03.133 --> 02:34:06.337
TALKING ABOUT THE TUBBS FIRE OR

02:34:06.403 --> 02:34:09.607
THE EATON FIRE. AND AND

02:34:09.673 --> 02:34:11.408
PARTICULARLY GIVEN THE VALUE OF

02:34:11.475 --> 02:34:12.810
HOMES IN CALIFORNIA AND THE

02:34:12.876 --> 02:34:13.844
HOME PRICE INFLATION THAT WE

02:34:13.911 --> 02:34:16.480
HAVE SEEN OVER THE LAST 10 TO

02:34:16.547 --> 02:34:19.984
15 YEARS. SO I GUESS I WOULD I

02:34:20.050 --> 02:34:25.389
WOULD WANT TO LEARN MORE ABOUT

02:34:25.456 --> 02:34:27.224
HOW THAT STRUCTURE, WHY THAT

02:34:27.291 --> 02:34:28.993
STRUCTURE IS THE WAY IT IS, AND

02:34:29.059 --> 02:34:30.661
WHETHER THERE ARE ALTERNATIVES

02:34:30.728 --> 02:34:31.595
THAT COULD WORK FOR THE

02:34:31.662 --> 02:34:33.063
INSURANCE INDUSTRY, YOU KNOW,

02:34:33.130 --> 02:34:34.598
AND ALLOW THEM TO PURSUE THE

02:34:34.665 --> 02:34:35.799
CLAIMS THAT THEY WANT TO PURSUE,

02:34:35.866 --> 02:34:37.835
BUT TO DO IT IN A WAY THAT IS

02:34:37.901 --> 02:34:40.170
MORE COST EFFECTIVE. UNDERSTOOD.

02:34:40.237 --> 02:34:44.842
THANK YOU. ALL RIGHT. SEEING NO

02:34:44.908 --> 02:34:46.710
FURTHER QUESTIONS OR COMMENTS

02:34:46.777 --> 02:34:50.180
FROM COMMITTEE, MADAM CHAIR.

02:34:50.247 --> 02:34:52.449
THANK YOU. I WANT TO THANK BOTH

02:34:52.516 --> 02:34:54.184
OF YOU FOR BEING HERE TODAY.

02:34:54.251 --> 02:34:55.653
THIS WAS EXTREMELY HELPFUL FOR

02:34:55.719 --> 02:34:59.590
ALL OF US. AND, NANCY, I THINK

02:34:59.657 --> 02:35:00.758
CONGRATULATIONS ARE IN ORDER. I

02:35:00.824 --> 02:35:01.859
HEARD THAT YOU'RE RETIRING AT

02:35:01.925 --> 02:35:03.727
THE END OF THE YEAR AT THE END

02:35:03.794 --> 02:35:05.596
OF THE YEAR. THAT'S RIGHT. I'M

02:35:05.663 --> 02:35:06.664
GOING TO BE IRRELEVANT ON

02:35:06.730 --> 02:35:07.731
JANUARY 1ST, 2027. SO YOU

02:35:07.798 --> 02:35:09.600
PROBABLY WON'T BE ASKING ME TO

02:35:09.667 --> 02:35:10.801
COME IN THE NEXT MONTH AND A

02:35:10.868 --> 02:35:12.636
HALF, I THINK. MADAM CHAIRWOMAN

02:35:12.703 --> 02:35:13.837
HERE HAS YOUR CELL PHONE NUMBER,

02:35:13.904 --> 02:35:15.673
SO I DON'T KNOW IF YOU'LL BE

02:35:15.739 --> 02:35:19.410
IRRELEVANT. OH, DEAR. THANK YOU.

02:35:19.476 --> 02:35:20.644
YES. AND I TOO WANT TO THANK

02:35:20.711 --> 02:35:22.579
BOTH OF YOU FOR BEING HERE. WE

02:35:22.646 --> 02:35:24.815
REALLY APPRECIATE YOUR INSIGHT

02:35:24.882 --> 02:35:27.017
AND LOOK FORWARD TO CONTINUED

02:35:27.084 --> 02:35:28.786
CONVERSATION AS WE TRY TO

02:35:28.852 --> 02:35:32.756
NAVIGATE WHAT IS A IMPORTANT

02:35:32.823 --> 02:35:34.658
AND DIFFICULT CHALLENGE FOR THE

02:35:34.725 --> 02:35:36.260
STATE OF CALIFORNIA. AND I WILL

02:35:36.326 --> 02:35:37.494
SAY, BEFORE WE MOVE TO PUBLIC

02:35:37.561 --> 02:35:38.829
COMMENT, JUST FOR THE ABSOLUTE

02:35:38.896 --> 02:35:40.664
AVOIDANCE OF DOUBT AND ECHOING

02:35:40.731 --> 02:35:42.866
SOME OF THE COMMENTS OF OUR

02:35:42.933 --> 02:35:44.935
BOTH OF OUR PANELISTS, I THINK

02:35:45.002 --> 02:35:46.770
EVERYONE ON THIS DAIS

02:35:46.837 --> 02:35:49.273
RECOGNIZES HOW IMPORTANT IT IS

02:35:49.339 --> 02:35:51.775
FOR OUR CONSTITUENTS THAT WE

02:35:51.842 --> 02:35:54.011
HAVE A STABLE HOME INSURANCE

02:35:54.078 --> 02:35:56.513
MARKET AND FUNCTIONING HOME

02:35:56.580 --> 02:35:57.614
INSURERS WORKING IN THE STATE

02:35:57.681 --> 02:35:59.783
OF CALIFORNIA, AS WELL AS A

02:35:59.850 --> 02:36:01.585
STABLE UTILITY SECTOR IN BOTH

02:36:01.652 --> 02:36:04.088
THE IOU AND THE PU SIDE, SO

02:36:04.154 --> 02:36:06.190
THAT WE CAN KEEP THE LIGHTS ON

02:36:06.256 --> 02:36:07.324
AND BUILD OUT THE

02:36:07.391 --> 02:36:08.559
INFRASTRUCTURE THAT WE NEED IN

02:36:08.625 --> 02:36:10.194
A WAY THAT'S AFFORDABLE FOR

02:36:10.260 --> 02:36:12.730
CALIFORNIA FAMILIES. SO THANK

02:36:12.796 --> 02:36:14.531
YOU AGAIN FOR BEING HERE. AND

02:36:14.598 --> 02:36:15.699
WITH THAT, I THINK WE'RE GOING

02:36:15.766 --> 02:36:17.634
TO GO AHEAD AND MOVE TO PUBLIC

02:36:17.701 --> 02:36:18.669
COMMENT. IF YOU'D LIKE TO

02:36:18.736 --> 02:36:19.803
PROVIDE PUBLIC COMMENT, YOU CAN

02:36:19.870 --> 02:36:21.705
GO AHEAD AND LINE UP. NOW. WE

02:36:21.772 --> 02:36:23.841
WILL ALLOW EVERYONE TWO MINUTES.

02:36:23.907 --> 02:36:25.075
AND IF YOU CAN, PLEASE BEGIN

02:36:25.142 --> 02:36:28.045
WITH YOUR NAME AND AFFILIATION

02:36:28.112 --> 02:36:29.913
BEFORE YOUR REMARKS. THANK YOU.

02:36:29.980 --> 02:36:32.783
GREAT. THANK YOU. CHAIRS,

02:36:32.850 --> 02:36:33.684
PETRIE-NORRIS AND CALDERON FOR

02:36:33.751 --> 02:36:35.285
THE DEEP DIVE ON SUBROGATION.

02:36:35.352 --> 02:36:36.420
IT'S TIMELY AND HELPFUL. I JUST

02:36:36.487 --> 02:36:38.522
WANTED TO EXPAND A BIT ON THE

02:36:38.589 --> 02:36:39.923
COMMENTS MADE BY MR. LARA

02:36:39.990 --> 02:36:41.492
REGARDING THE REGRESSIVE NATURE

02:36:41.558 --> 02:36:43.527
TO WHICH THE ELECTRIC BILL IS

02:36:43.594 --> 02:36:45.295
USED TO PAY FOR WILDFIRE IN

02:36:45.362 --> 02:36:46.797
CALIFORNIA, AS ELECTRICITY

02:36:46.864 --> 02:36:48.966
USAGE IS NOT CORRELATED WITH

02:36:49.032 --> 02:36:50.701
INCOME BECAUSE WILDFIRE COSTS,

02:36:50.768 --> 02:36:53.237
BOTH MITIGATION AND LIABILITY

02:36:53.303 --> 02:36:55.472
COSTS, ARE PAID BASED ON USAGE.

02:36:55.539 --> 02:36:57.174
THESE LOWER INCOME CUSTOMERS

02:36:57.241 --> 02:36:58.976
LIVING FARTHER INLAND AND IN

02:36:59.042 --> 02:37:01.912
HOTTER CLIMATES PAY AN UNFAIR

02:37:01.979 --> 02:37:03.714
SHARE OF THE WILDFIRE COSTS.

02:37:03.781 --> 02:37:05.849
FURTHER, THE COST OF DELAYING

02:37:05.916 --> 02:37:08.051
IS AND DOING NOTHING IS

02:37:08.118 --> 02:37:09.820
SIGNIFICANT AND UNSUSTAINABLE.

02:37:09.887 --> 02:37:11.155
THEREFORE, WE ASK CALIFORNIA TO

02:37:11.221 --> 02:37:12.723
FIND A MORE PROGRESSIVE AND

02:37:12.790 --> 02:37:15.626
EQUITABLE WAY TO FUND THE

02:37:15.692 --> 02:37:18.162
LIABILITY COSTS. THANK YOU,

02:37:18.228 --> 02:37:23.534
THANK YOU. THANK YOU, MADAM

02:37:23.600 --> 02:37:25.002
CHAIR AND MEMBERS, DANNY RITTER.

02:37:25.068 --> 02:37:26.403
I'M HERE ON BEHALF OF THE

02:37:26.470 --> 02:37:27.437
AMERICAN PROPERTY CASUALTY

02:37:27.504 --> 02:37:29.306
INSURANCE ASSOCIATION. REALLY

02:37:29.373 --> 02:37:30.340
APPRECIATE THE OPPORTUNITY TO

02:37:30.407 --> 02:37:32.376
OFFER SOME PUBLIC COMMENTS. I

02:37:32.442 --> 02:37:34.311
DO WANT TO START OUT BY SAYING,

02:37:34.378 --> 02:37:35.779
YOU KNOW, EXPRESSING SOME

02:37:35.846 --> 02:37:38.982
APPRECIATION FOR THE THE FOCUS

02:37:39.049 --> 02:37:40.751
ON THIS ISSUE AND THE REALLY

02:37:40.818 --> 02:37:41.852
THOUGHTFUL DISCUSSION THAT

02:37:41.919 --> 02:37:44.755
WE'VE HAD HERE. I THINK WE ALSO

02:37:44.822 --> 02:37:46.857
REALLY APPRECIATE THAT ALL THE

02:37:46.924 --> 02:37:47.958
COMMENTS THAT YOU'VE MADE KIND

02:37:48.025 --> 02:37:50.460
OF IN RECOGNITION OF THE

02:37:50.527 --> 02:37:51.895
FRAGILITY THAT WE FIND

02:37:51.962 --> 02:37:53.730
OURSELVES OF THE CURRENT

02:37:53.797 --> 02:37:54.832
SITUATION, WE ARE STARTING TO

02:37:54.898 --> 02:37:57.367
SEE SOME SEEDS OR SPROUTS OF

02:37:57.434 --> 02:37:59.102
IMPROVEMENT IN CALIFORNIA IN

02:37:59.169 --> 02:38:00.604
TERMS OF, I MEAN, THE FAIR PLAN

02:38:00.671 --> 02:38:01.972
DATA THAT WE'VE SEEN JUST THIS

02:38:02.039 --> 02:38:04.007
LAST QUARTER REALLY INDICATES

02:38:04.074 --> 02:38:06.643
THAT THE ADMITTED MARKET IS IS

02:38:06.710 --> 02:38:08.579
RETURNING. AND SO WE'RE REALLY

02:38:08.645 --> 02:38:10.380
COGNIZANT OF WANTING TO

02:38:10.447 --> 02:38:12.082
CONTINUE THOSE IMPROVEMENTS AND

02:38:12.149 --> 02:38:13.884
REALLY, REALLY INTERESTED IN

02:38:13.951 --> 02:38:15.786
ENSURING THAT ANY ACTIONS THAT

02:38:15.853 --> 02:38:18.188
THE STATE TAKES ARE REALLY

02:38:18.255 --> 02:38:21.458
COGNIZANT OF THOSE REFORMS. I

02:38:21.525 --> 02:38:23.227
ALSO I DO WANT TO JUST TOUCH ON

02:38:23.293 --> 02:38:26.463
A FEW POINTS WITH YOUR

02:38:26.530 --> 02:38:28.131
INDULGENCE. WE DO RECOGNIZE

02:38:28.198 --> 02:38:29.333
THIS AS A WHOLE OF SOCIETY

02:38:29.399 --> 02:38:31.034
PROBLEM. AND I THINK THERE HAVE

02:38:31.101 --> 02:38:32.970
BEEN, YOU KNOW, THIS IS A BIG

02:38:33.036 --> 02:38:34.037
ISSUE AND IT'S CHALLENGING. AND

02:38:34.104 --> 02:38:35.839
IF IT WEREN'T, OBVIOUSLY WE

02:38:35.906 --> 02:38:37.507
WOULD HAVE FIXED IT, YOU KNOW,

02:38:37.574 --> 02:38:39.843
A WHILE AGO. I THINK THAT

02:38:39.910 --> 02:38:40.878
THERE'S THIS SENSE SOMETIMES

02:38:40.944 --> 02:38:42.346
THAT THE INSURANCE INDUSTRY

02:38:42.412 --> 02:38:43.347
ISN'T, YOU KNOW, READY AND

02:38:43.413 --> 02:38:45.182
WILLING TO BE PART OF THE

02:38:45.249 --> 02:38:46.316
SOLUTION. BUT I REALLY WOULD

02:38:46.383 --> 02:38:49.553
EMPHASIZE THAT WE ARE THERE

02:38:49.620 --> 02:38:51.688
FROM DAY ONE POST EVENT. AND

02:38:51.755 --> 02:38:53.123
YOU ASKED A QUESTION ABOUT HOW

02:38:53.190 --> 02:38:54.691
QUICKLY WE PAY OUT CLAIMS FOR

02:38:54.758 --> 02:38:57.160
THE LA FIRES. WE PAID OUT 4.2

02:38:57.227 --> 02:38:59.263
BILLION WITHIN THREE WEEKS. SO

02:38:59.329 --> 02:39:00.797
THAT IS REAL MONEY IN THE HANDS

02:39:00.864 --> 02:39:02.165
OF PEOPLE WHO ARE STRUGGLING.

02:39:02.232 --> 02:39:03.867
WE'RE THERE ON THE WEEKEND

02:39:03.934 --> 02:39:05.736
AFTER THE EVENT AT A HOME DEPOT

02:39:05.802 --> 02:39:07.571
PARKING LOT AND INSURANCE

02:39:07.638 --> 02:39:09.339
VILLAGE ISSUING CHECKS. AND SO

02:39:09.406 --> 02:39:11.108
WE REALLY DO FEEL LIKE WE PLAY

02:39:11.174 --> 02:39:14.011
A VERY PRODUCTIVE ROLE IN

02:39:14.077 --> 02:39:17.214
HELPING PEOPLE REBUILD. AND AS

02:39:17.281 --> 02:39:19.816
ONE OF THE PRESENTERS NOTED, WE

02:39:19.883 --> 02:39:21.919
DON'T RECOVER AT 100%. SO WE

02:39:21.985 --> 02:39:24.755
ARE ALREADY PROVIDING NOT ONLY

02:39:24.821 --> 02:39:26.990
THE TOOLS TO RECOVER, BUT WE

02:39:27.057 --> 02:39:28.859
ARE ALSO, YOU KNOW, WE HAVE

02:39:28.926 --> 02:39:30.928
QUITE A STAKE IN IN THIS

02:39:30.994 --> 02:39:33.397
CONVERSATION. THE OTHER THING I

02:39:33.463 --> 02:39:36.366
WOULD FLAG FOR YOU ALL IS I

02:39:36.433 --> 02:39:38.535
THINK MISS WATKINS TOUCHED ON

02:39:38.602 --> 02:39:40.704
THIS, BUT THE EFFECT OF

02:39:40.771 --> 02:39:41.738
ELIMINATING OR CAPPING

02:39:41.805 --> 02:39:44.942
SUBROGATION WOULD NOT BE FELT

02:39:45.008 --> 02:39:47.144
UNIFORMLY AMONG VARIOUS

02:39:47.210 --> 02:39:48.578
INSURERS. POLICYHOLDERS

02:39:48.645 --> 02:39:50.681
CERTAINLY WILL SEE DIFFERENT

02:39:50.747 --> 02:39:51.615
EFFECTS BASED ON WHERE THEY

02:39:51.682 --> 02:39:52.883
LIVE IN THEIR WILDFIRE. BUT

02:39:52.950 --> 02:39:55.085
EVEN INSURERS, IF YOU ARE A

02:39:55.152 --> 02:39:57.220
LARGE NATIONAL CARRIER WHO IS

02:39:57.287 --> 02:39:58.889
NOT SO HEAVILY CONCENTRATED

02:39:58.956 --> 02:40:01.291
JUST IN CALIFORNIA, YOU'RE

02:40:01.358 --> 02:40:02.626
GOING TO HAVE A DIFFERENT

02:40:02.693 --> 02:40:04.795
ABILITY TO ABSORB A CHANGE IN

02:40:04.861 --> 02:40:06.596
SUBROGATION. AND SO THE CONCERN

02:40:06.663 --> 02:40:08.031
THAT WE WOULD HAVE IS THAT YOUR

02:40:08.098 --> 02:40:09.800
SMALLER CARRIERS OR YOUR

02:40:09.866 --> 02:40:10.901
CARRIERS WHO ARE REALLY

02:40:10.968 --> 02:40:12.369
CONCENTRATED IN CALIFORNIA,

02:40:12.436 --> 02:40:14.171
THIS WILL HIT THEM DIFFERENTLY.

02:40:14.237 --> 02:40:16.273
AND SO TO THE EXTENT THAT PART

02:40:16.340 --> 02:40:17.708
OF THE GOALS OF OUR REFORMS IS

02:40:17.774 --> 02:40:19.509
TO DIVERSIFY THE NUMBER OF

02:40:19.576 --> 02:40:21.311
INSURERS WE HAVE WRITING HERE,

02:40:21.378 --> 02:40:22.245
WHICH IS REALLY IMPORTANT. SO

02:40:22.312 --> 02:40:23.447
YOU DON'T HAVE ONE CARRIER

02:40:23.513 --> 02:40:25.282
WRITING 40% OF POLICIES IN A

02:40:25.349 --> 02:40:27.651
GIVEN ZIP CODE. WE'RE CONCERNED

02:40:27.718 --> 02:40:29.186
THAT THIS WILL IMPACT THEM

02:40:29.252 --> 02:40:30.487
DIFFERENTLY. I COULD GO ON, BUT

02:40:30.554 --> 02:40:32.422
I WON'T. SO THANK YOU FOR YOUR

02:40:32.489 --> 02:40:37.561
TIME. APPRECIATE IT. THANK YOU.

02:40:37.627 --> 02:40:39.363
GOOD AFTERNOON MEMBERS. AARON

02:40:39.429 --> 02:40:40.430
TAYLOR ON BEHALF OF THE

02:40:40.497 --> 02:40:41.832
PERSONAL INSURANCE FEDERATION,

02:40:41.898 --> 02:40:43.633
I'D LIKE TO BRIEFLY EMPHASIZE A

02:40:43.700 --> 02:40:47.571
FEW POINTS. FIRST, AS 15

02:40:47.637 --> 02:40:49.072
INSURANCE CEOS EMPHASIZE IN

02:40:49.139 --> 02:40:50.507
THEIR LETTER TO THE GOVERNOR,

02:40:50.574 --> 02:40:53.043
WE SHARE THE GOALS OF FULLY

02:40:53.110 --> 02:40:55.112
COMPENSATING WILDFIRE SURVIVORS,

02:40:55.178 --> 02:40:57.314
HOLDING UTILITIES ACCOUNTABLE,

02:40:57.381 --> 02:40:59.149
AND KEEPING ELECTRICITY AND

02:40:59.216 --> 02:41:00.183
INSURANCE AFFORDABLE AND

02:41:00.250 --> 02:41:02.052
AVAILABLE, ELIMINATING OR

02:41:02.119 --> 02:41:03.820
CAPPING SUBROGATION WOULD

02:41:03.887 --> 02:41:05.288
UNDERMINE THOSE GOALS BY

02:41:05.355 --> 02:41:07.391
INCREASING INSURANCE COSTS,

02:41:07.457 --> 02:41:08.358
THREATENING COVERAGE IN HIGH

02:41:08.425 --> 02:41:10.594
RISK AREAS AND RENEWING FAIR

02:41:10.660 --> 02:41:12.129
PLAY AND GROWTH JUST AS THE

02:41:12.195 --> 02:41:13.697
MARKET BEGINS TO STABILIZE,

02:41:13.764 --> 02:41:15.332
WHICH YOU HEARD SEVERAL EXPERTS

02:41:15.399 --> 02:41:18.235
TALK ABOUT TODAY. SECOND,

02:41:18.301 --> 02:41:19.669
COMMISSIONER LARA'S CONCERNS

02:41:19.736 --> 02:41:21.104
DESERVE TO BE HEARD. HIS LETTER

02:41:21.171 --> 02:41:23.273
TO THIS COMMITTEE STRESSES THAT

02:41:23.340 --> 02:41:24.841
LOSSES INSURERS CAN'T RECOVER

02:41:24.908 --> 02:41:26.943
FROM RESPONSIBLE PARTIES WOULD

02:41:27.010 --> 02:41:28.645
FLOW INTO UNDERWRITING

02:41:28.712 --> 02:41:30.414
DECISIONS, REINSURANCE COSTS

02:41:30.480 --> 02:41:33.383
AND PREMIUMS. THAT MEANS HIGHER

02:41:33.450 --> 02:41:35.585
PRICES, FEWER CONSUMER OPTIONS

02:41:35.652 --> 02:41:37.354
AND SLOWER PROGRESS TOWARDS

02:41:37.421 --> 02:41:38.755
RESTORING A HEALTHY COMPETITIVE

02:41:38.822 --> 02:41:40.624
MARKET. AND FINALLY, LET'S BE

02:41:40.690 --> 02:41:41.958
CLEAR THAT THOSE IMPACTS WOULD

02:41:42.025 --> 02:41:44.127
FALL HARDEST ON CONSUMERS

02:41:44.194 --> 02:41:46.296
ALREADY EXPERIENCING INSURANCE

02:41:46.363 --> 02:41:48.498
AFFORDABILITY AND AVAILABILITY

02:41:48.565 --> 02:41:49.900
CHALLENGES. NOW, WE RECOGNIZE

02:41:49.966 --> 02:41:51.001
THIS IS A COMPLEX AND

02:41:51.068 --> 02:41:52.803
CHALLENGING ISSUE AND

02:41:52.869 --> 02:41:53.870
APPRECIATE THE OPPORTUNITY TO

02:41:53.937 --> 02:41:56.006
WORK WITH YOU ON SOLUTIONS THAT

02:41:56.073 --> 02:41:57.841
BALANCE THESE CONCERNS. THANK

02:41:57.908 --> 02:42:03.613
YOU, THANK YOU. MADAM CHAIR AND

02:42:03.680 --> 02:42:04.648
MEMBERS. LEÓN TRENTON WITH

02:42:04.714 --> 02:42:06.049
TRENTON PRICE REPRESENTING

02:42:06.116 --> 02:42:07.951
CONSUMER ATTORNEYS. THANK YOU

02:42:08.018 --> 02:42:09.686
AGAIN FOR ANOTHER ENLIGHTENING

02:42:09.753 --> 02:42:11.888
HEARING. I THINK IT'S

02:42:11.955 --> 02:42:12.989
INTERESTING BECAUSE ON THE ONE

02:42:13.056 --> 02:42:15.125
HAND, I THINK WE ALL HAVE THE

02:42:15.192 --> 02:42:16.927
SAME GOALS. I THINK WE PROBABLY

02:42:16.993 --> 02:42:18.462
EACH HAVE DIFFERENT THOUGHTS

02:42:18.528 --> 02:42:21.531
ABOUT HOW WE ACHIEVE THEM. I

02:42:21.598 --> 02:42:22.966
WAS VERY INTERESTED IN THE

02:42:23.033 --> 02:42:23.733
EXCHANGE WITH THE

02:42:23.800 --> 02:42:25.168
REPRESENTATIVE FROM MILLMAN

02:42:25.235 --> 02:42:27.003
ABOUT WHAT WHEN WE ARE LOOKING

02:42:27.070 --> 02:42:28.171
AT POLICY SOLUTIONS, WE REALLY

02:42:28.238 --> 02:42:30.540
DO HAVE TO TAKE CARE THAT WE

02:42:30.607 --> 02:42:33.443
DON'T DISINCENTIVIZE THE

02:42:33.510 --> 02:42:35.745
ELIMINATION OF RISK. YOU HEARD

02:42:35.812 --> 02:42:37.614
ME TALK ABOUT THIS YESTERDAY. I

02:42:37.681 --> 02:42:39.549
THINK IT'S THE BEST WAY TO

02:42:39.616 --> 02:42:41.718
REDUCE COST IS TO AVOID THE

02:42:41.785 --> 02:42:44.287
FIRES IN THE FIRST PLACE. AND

02:42:44.354 --> 02:42:46.857
THE IF WHAT WE ARE LOOKING AT

02:42:46.923 --> 02:42:48.992
IN THE PANEL YESTERDAY IS

02:42:49.059 --> 02:42:51.428
REDUCING SHAREHOLDER LIABILITY,

02:42:51.495 --> 02:42:53.997
THAT AT ITS CORE,

02:42:54.064 --> 02:42:57.167
DISINCENTIVIZES THEIR RISK

02:42:57.234 --> 02:42:58.301
REDUCTION, ONE REASON I THINK

02:42:58.368 --> 02:43:00.804
WE DO SEE THE GOLD STANDARD IN

02:43:00.871 --> 02:43:03.006
SAN DIEGO IS THAT AFTER THE

02:43:03.073 --> 02:43:05.108
HORRIBLE FIRES IN SAN DIEGO,

02:43:05.175 --> 02:43:06.977
THE SHAREHOLDERS HAD TO COVER

02:43:07.043 --> 02:43:09.179
IT. AND THE RESULT WAS THERE

02:43:09.246 --> 02:43:11.948
WAS AN INSISTENCE THAT RATE,

02:43:12.015 --> 02:43:14.117
EXCUSE ME, RISK REDUCTION BE

02:43:14.184 --> 02:43:16.987
PRIORITIZED. AND IT HAS BEEN I

02:43:17.053 --> 02:43:18.755
DO WANT TO JUST TOUCH ON

02:43:18.822 --> 02:43:20.223
EVERYONE'S FAVORITE TOPIC OF

02:43:20.290 --> 02:43:24.361
INVERSE CONDEMNATION. I THINK

02:43:24.427 --> 02:43:26.763
THE HARDEST THING TO GRAPPLE

02:43:26.830 --> 02:43:28.899
HERE WITH IS THAT IT IS NOT

02:43:28.965 --> 02:43:29.966
AUTOMATIC. BUT HERE'S JUST AN

02:43:30.033 --> 02:43:31.835
EXAMPLE THAT SHOWS THAT THE

02:43:31.902 --> 02:43:33.970
LIABILITY IS NOT. THE EATON

02:43:34.037 --> 02:43:36.640
FIRE OCCURRED, I THINK, JANUARY

02:43:36.706 --> 02:43:40.443
7TH, 2025. ON MONDAY, THERE WAS

02:43:40.510 --> 02:43:43.280
A HEARING WHERE SCC IS STILL

02:43:43.346 --> 02:43:45.482
ARGUING THAT THEY SHOULD NOT BE

02:43:45.549 --> 02:43:46.550
RESPONSIBLE UNDER THE DOCTRINE

02:43:46.616 --> 02:43:48.718
OF INVERSE CONDEMNATION. THEY

02:43:48.785 --> 02:43:50.854
ARE SAYING THAT THEIR LINES DID

02:43:50.921 --> 02:43:54.090
NOT. THEY WEREN'T PERFORMING AS

02:43:54.157 --> 02:43:55.926
INTENDED WHEN THEY CAUSED THE

02:43:55.992 --> 02:43:57.060
FIRE. THEREFORE, THEY SHOULD

02:43:57.127 --> 02:43:58.795
NOT BE RESPONSIBLE. UNDER

02:43:58.862 --> 02:44:01.665
INVERSE CONDEMNATION, THE JUDGE

02:44:01.731 --> 02:44:03.066
DENIED THEIR MOTION TO

02:44:03.133 --> 02:44:04.734
ELIMINATE THAT CAUSE OF ACTION.

02:44:04.801 --> 02:44:06.603
BUT THE POINT OF THAT IS NEARLY

02:44:06.670 --> 02:44:08.138
TWO YEARS LATER, THEY ARE

02:44:08.205 --> 02:44:10.340
CONTINUING TO FIGHT THEIR

02:44:10.407 --> 02:44:12.475
LIABILITY UNDER INVERSE

02:44:12.542 --> 02:44:14.277
CONDEMNATION. ULTIMATELY, WE'RE

02:44:14.344 --> 02:44:16.213
LOOKING HERE AT COST SHIFTING.

02:44:16.279 --> 02:44:18.215
I THINK WE HAVE TO TAKE CARE TO

02:44:18.281 --> 02:44:20.750
REDUCE THE COST AND NOT

02:44:20.817 --> 02:44:22.986
INADVERTENTLY END UP

02:44:23.053 --> 02:44:24.087
ELIMINATING THE SURVIVORS.

02:44:24.154 --> 02:44:25.889
EXCUSE ME. SURVIVORS RIGHTS.

02:44:25.956 --> 02:44:29.326
THANK YOU, THANK YOU. GOOD

02:44:29.392 --> 02:44:30.493
AFTERNOON. CHAIRS AND MEMBERS

02:44:30.560 --> 02:44:31.595
JOHN KENRICK FROM THE

02:44:31.661 --> 02:44:32.996
CALIFORNIA CHAMBER OF COMMERCE.

02:44:33.063 --> 02:44:34.030
YOU KNOW, THIS SERIES OF

02:44:34.097 --> 02:44:35.999
HEARINGS HAS DONE A GOOD JOB OF

02:44:36.066 --> 02:44:36.933
HIGHLIGHTING HOW CALIFORNIA'S

02:44:37.000 --> 02:44:38.768
EXISTING APPROACHES TO WILDFIRE

02:44:38.835 --> 02:44:40.136
LIABILITY AFFECTS WILDFIRE

02:44:40.203 --> 02:44:42.372
VICTIMS, UTILITIES, INSURERS,

02:44:42.439 --> 02:44:44.174
AND CALIFORNIA'S HOUSEHOLDS AND

02:44:44.241 --> 02:44:46.009
BUSINESSES. THE FRAMING THAT

02:44:46.076 --> 02:44:48.111
CHAIR PETRIE-NORRIS ARTICULATED

02:44:48.178 --> 02:44:49.913
AT THE OUTSET OF TODAY,

02:44:49.980 --> 02:44:51.448
ENSURING VICTIMS RECEIVE FAST

02:44:51.514 --> 02:44:53.116
AND FAIR COMPENSATION. MANAGING

02:44:53.183 --> 02:44:54.417
THESE CHALLENGES EFFICIENTLY

02:44:54.484 --> 02:44:56.753
AND COST EFFECTIVELY,

02:44:56.820 --> 02:44:58.154
CONSIDERING HOW RISKS SHOULD BE

02:44:58.221 --> 02:44:59.923
SHARED, PROVIDE AN IMPORTANT

02:44:59.990 --> 02:45:02.492
FOUNDATION FOR REFORM. OUR

02:45:02.559 --> 02:45:04.327
MEMBERS DEPEND ON BOTH A

02:45:04.394 --> 02:45:05.695
FINANCIALLY STABLE UTILITY

02:45:05.762 --> 02:45:07.197
SYSTEM AND A HEALTHY,

02:45:07.264 --> 02:45:08.999
COMPETITIVE INSURANCE MARKET,

02:45:09.065 --> 02:45:10.834
SO WE URGE THE LEGISLATURE TO

02:45:10.900 --> 02:45:13.103
BUILD ON THE WORK OF AB 1054,

02:45:13.169 --> 02:45:15.772
SB 254 AND REFORM OUR EXISTING

02:45:15.839 --> 02:45:17.941
WILDFIRE LIABILITY SYSTEM. THE

02:45:18.008 --> 02:45:19.776
STATUS QUO IS NOT WORKING AND

02:45:19.843 --> 02:45:21.211
DIFFICULT TRADE OFFS MUST BE

02:45:21.278 --> 02:45:23.046
MADE. BUT THE AFFORDABILITY

02:45:23.113 --> 02:45:24.481
PRESSURES FACING CALIFORNIANS

02:45:24.547 --> 02:45:27.150
DEMAND ACTION. THANK YOU, THANK

02:45:27.217 --> 02:45:31.755
YOU. HELLO. THANK YOU. CHAIRS

02:45:31.821 --> 02:45:33.089
AND MEMBERS OF THE COMMITTEES.

02:45:33.156 --> 02:45:34.591
MY NAME IS AARON SANFORD AND

02:45:34.658 --> 02:45:35.625
I'M WITH THE NORTHERN

02:45:35.692 --> 02:45:38.495
CALIFORNIA POWER AGENCY, OR

02:45:38.561 --> 02:45:40.697
NCPA FOR NOT FOR PROFIT

02:45:40.764 --> 02:45:42.465
COMMUNITY OWNED UTILITIES WITH

02:45:42.532 --> 02:45:44.634
NO SHAREHOLDERS AND NO STATE

02:45:44.701 --> 02:45:46.169
BACKED WILDFIRE FUND. THE RISKS

02:45:46.236 --> 02:45:48.605
AND COSTS ASSOCIATED WITH ALL

02:45:48.672 --> 02:45:50.040
OF THE ISSUES THAT WERE

02:45:50.106 --> 02:45:51.474
DISCUSSED OVER THESE PAST THREE

02:45:51.541 --> 02:45:52.909
HEARINGS ULTIMATELY FALL ON THE

02:45:52.976 --> 02:45:55.011
COMMUNITIES THAT WE SERVE.

02:45:55.078 --> 02:45:56.146
CALIFORNIA'S CURRENT WILDFIRE

02:45:56.212 --> 02:45:57.580
LIABILITY FRAMEWORK DRIVES UP

02:45:57.647 --> 02:45:58.648
INSURANCE AND BORROWING COSTS

02:45:58.715 --> 02:46:00.450
FOR PUBLICLY OWNED UTILITIES,

02:46:00.517 --> 02:46:01.885
DESPITE SIGNIFICANT EFFORTS TO

02:46:01.951 --> 02:46:04.421
LIMIT WILDFIRE RISK. THIS

02:46:04.487 --> 02:46:05.822
DIRECTLY IMPACTS ELECTRICITY

02:46:05.889 --> 02:46:07.290
AFFORDABILITY AND REDUCES

02:46:07.357 --> 02:46:08.358
RESOURCES AVAILABLE TO INVEST

02:46:08.425 --> 02:46:10.193
IN INFRASTRUCTURE NEEDS AND

02:46:10.260 --> 02:46:12.028
ADDITIONAL MITIGATION WORK.

02:46:12.095 --> 02:46:13.430
NEPA APPRECIATES THE WORK OF

02:46:13.496 --> 02:46:15.265
THESE COMMITTEES AND THIS

02:46:15.332 --> 02:46:16.666
SERIES OF HEARINGS, AND IS

02:46:16.733 --> 02:46:18.401
HAPPY TO BE A RESOURCE AS YOU

02:46:18.468 --> 02:46:19.903
LOOK TO ADVANCE WILDFIRE,

02:46:19.969 --> 02:46:22.072
WILDFIRE POLICY REFORM THAT

02:46:22.138 --> 02:46:23.106
SUPPORTS ELECTRICITY

02:46:23.173 --> 02:46:24.207
AFFORDABILITY, COMMUNITY

02:46:24.274 --> 02:46:25.442
RESILIENCE AND SAFETY ACROSS

02:46:25.508 --> 02:46:29.245
OUR STATE. THANK YOU, THANK YOU.

02:46:29.312 --> 02:46:31.014
IN CLOSING, I JUST WANT TO SAY

02:46:31.081 --> 02:46:32.816
A REAL THANK YOU TO ALL OF

02:46:32.882 --> 02:46:34.651
TODAY'S PANELISTS, AS WELL AS

02:46:34.718 --> 02:46:35.885
TO ALL OF THE PANELISTS WHO

02:46:35.952 --> 02:46:37.620
HAVE JOINED US OVER THE LAST

02:46:37.687 --> 02:46:38.788
TWO WEEKS FOR THIS SERIES OF

02:46:38.855 --> 02:46:39.889
THREE HEARINGS. IT'S ALWAYS WE

02:46:39.956 --> 02:46:42.926
REALLY APPRECIATE YOUR INSIGHT

02:46:42.992 --> 02:46:44.361
AND YOUR TIME SPENT WITH THIS

02:46:44.427 --> 02:46:46.896
COMMITTEE. THANK YOU. MEMBERS.

02:46:46.963 --> 02:46:48.732
LOOK FORWARD TO CONTINUING THIS

02:46:48.798 --> 02:46:51.234
WORK WITH YOU AS THE REST OF

02:46:51.301 --> 02:46:53.703
2026 UNFOLDS. WITH THAT, WE ARE

02:46:53.770 --> 02:47:08.785
ADJOURNED.