insurer

When LeBron James signed up to lead the Los Angeles Lakers to NBA glory with a $154 million contract in 2018, it wasn’t the biggest deal he did that year.

Just months before he joined, a limited liability company he controls borrowed almost $300 million from a pair of Midwestern life insurers advised by an arm of Guggenheim Partners, according to insurance industry records reviewed by Bloomberg.

The previously unreported bonds, which are due in 2049, were structured to provide immediate cash to James and backed by a stream of future revenue tied to his earnings outside basketball such as a lifetime Nike Inc. sponsorship, people with knowledge of the matter said.

The burst of lending began before Guggenheim leader Mark Walter started acquiring the storied basketball team. In an abrupt turn this month, the billionaire mogul agreed to sell the Lakers amid a federal probe into parts of his business empire. There’s no indication that the loans to James have anything to do with those inquiries.

Athletes and artists are increasingly using future earnings like royalties and licensing deals to structure deals that help them unlock immediate capital. David Bowie was famously the first recording artist to go to Wall Street to tap the future earnings of his music, paving the way for a thriving market for esoteric securities.

But James’ deal offers another look at how Walter and fellow Wall Street money managers have tectonically shifted the once-boring business of life insurance, steering policyholder premiums into more unusual investments. Guggenheim has moved insurers’ money deeper into private credit, sports franchises and — with James — financing for a star player. That’s far outside the industry’s traditional focus on plain-vanilla assets to reliably pay out future claims.

The two insurers — North American Company for Life and Health Insurance and Midland National Life Insurance Co. — are both owned by Sammons Financial Group. During a call with investors this week, Sammons said Guggenheim was the sole manager in charge of picking assets for the firm’s portfolios until 2021, according to people who heard the remarks and, like others in this story, asked not to be identified describing confidential dealings.

Sammons has been distancing itself from Guggenheim recently. Walter’s firm had long counted Sammons’ parent company among its biggest investors. During the call, though, Sammons’ representatives said it has been selling down that stake, the people said.

The “transactions were a securitization done by Mr. James with his personal, non-NBA salary, assets and income which is a very common financial structure for an individual with this level of earnings and assets,” a spokesperson for James said.

Spokespeople for Sammons and Guggenheim declined to comment.

The scrutiny of Walter’s empire by the Justice Department and Securities and Exchange Commission has turned up the spotlight on the intermingling of asset managers and insurers.

Wall Street power players have used insurance balance sheets to pursue their quest for higher returns, steering the savings of everyday Americans into more opaque and complex investments. The approach lets asset managers originate and structure deals, and then find uncomplaining buyers by parking such investments on the balance sheets of insurers they influence.

King James Funding

James’ borrowing from the two Midwestern insurers — structured as sales of asset-backed bonds — began when he was at the Cleveland Cavaliers and his career was poised for new heights.

The two companies bought almost $300 million bonds issued by an LLC he controlled called King James Funding, the records show. Within a few years, the LLC paid down some of that debt, then sold more bonds to the insurers, leaving them with about $245 million on their books by the end of last year, the records show.

The initial bonds from 2018 had a 4.8% interest rate and aren’t due until late 2049, the industry filings show. Terms are otherwise scant in the records reviewed by Bloomberg.

A few months after the deal, James started looking for another team as a free agent, ultimately picking the Lakers. In an oft-retold moment, he received a visit at home from Walter’s longtime business partner Magic Johnson, then a top executive for the Lakers. James ultimately signed a four-year contract.

Then in mid-August 2022, James signed a $97 million contract extension with the Lakers. Around that same time, the same Midwestern insurers provided his LLC with more cash, buying almost $60 million of 34-year bonds with a 5.75% interest rate, the insurers’ records show.

“Both transactions were independently credit rated by a third party and the 2022 transaction was fully approved by NBA,” James’ spokesperson said, noting the athlete had no affiliation with Guggenheim, Sammons, North American Co. or Midland National beyond their participation in the transactions.

Guggenheim also got involved in some of James’ other personal ventures. As the Covid pandemic took hold in 2020, he and his childhood friend and business partner, Maverick Carter, announced that they had raised $100 million for their media venture called SpringHill Co. Guggenheim was listed among investors in that company.

Leaving the Lakers

For more than a decade, Walter has mixed money from insurers with investments in sports. His 2012 acquisition of the Los Angeles Dodgers with business partners including Johnson relied heavily on the insurance industry.

Afterward, the new team’s owners ramped up spending on players to turn the franchise into a jewel of professional baseball, appearing in five of the past nine World Series. But that playbook isn’t as feasible in the NBA, which has stricter caps on team salaries.

Walter’s acquisition of the Lakers began in 2021 when he purchased a minority stake, granting him rights that paved the way for him to take a majority stake last year.

The sale of the team came as Walter has been reshaping his empire to unwind more than $20 billion of loans on his insurers’ books that should have been marked as funding affiliated businesses, but weren’t. While regulations allow insurers to lend money to such parties, they require that the dealings be disclosed.

James, meanwhile, announced that he’s leaving the Lakers and he signed a two-year deal with the Philadelphia 76ers. His new team is co-owned by Josh Harris, whose 26North Partners invests across middle-market private equity, credit and insurance.

Li, Sridhar Natarajan and Rajbhandari write for Bloomberg.

When Mark Walter, the Lakers controlling owner, flipped the storied team last week for $12.5 billion amid a federal probe of his businesses, it stunned the sports world but seemed to make financial and legal sense.

The Dodgers majority owner, who had bought his stake in the basketball team last year at a $10-billion valuation, likely netted a big payday from the sale to former Disney Chief Executive Bob Iger and venture capitalist Joshua Kushner.

And that’s money the billionaire can apply to pay down the debts of two troubled Delaware life insurers he owns that are under federal scrutiny.

It’s not at all clear whether the sale of the Lakers will have any effect on the ongoing investigations. Neither Walter nor his companies have been charged with any crimes.

TWG Global, Walter’s holding company, did not respond to a request for comment Friday, but a spokesperson for the company has previously stated that they are cooperating with authorities and expect the matter to be resolved “favorably.”

“Mark Walter and TWG have always acted in good faith, and those who have done business with Mark know him as honest and straightforward,” the statement said.

After receiving federal grand jury subpoenas in February, Delaware Life and Clear Spring Life and Annuity conducted internal investigations. They found that $21 billion in loans they made should have been recorded as extended to “related parties.”

Related parties have business or personal ties and transactions between them can have legitimate reasons, but they also pose potential conflicts of interest and require disclosure and typically extra regulatory scrutiny.

In the case of insurers, which hold premium dollars from policyholders for future claims payouts, regulators want to ensure the money is there when it’s needed. Related-party transactions can threaten that.

Walter, 66, chief executive of Chicago investment firm Guggenheim Partners, led a group that included another Guggenheim executive and Magic Johnson in acquiring the Dodgers for $2.15 billion in 2012. The Times has reported he tapped the insurers he owned for financing, a deal that was later vetted by state insurance regulators.

However, the amount of related-party loans made by the two affiliated life insurers now under federal scrutiny is vastly more, amounting to 40% of the invested assets of Delaware Life as of Dec. 31, according to Fitch Ratings. The credit rating outfit said that is the most of any North American life insurers it reviews.

It’s unclear exactly where all the money went, but the Wall Street Journal reported billions were passed through a third party before being received by entities tied to Walter or his TWG Global holding company.

Company executives also told Fitch that they were unaware they were making related-party loans. Bloomberg reported that investigators are looking at some loans made to multiple companies affiliated with one Chicago firm to see if they were passed along to Walter’s ventures.

In June regulatory filings that disclosed the $21 billion in restatements, each insurer labeled them as “corrections of errors,” which would imply that they were inadvertent.

Jacob Frenkel, a former U.S. attorney, said it appears clear a focus of the investigation into Walter’s businesses is to determine whether the restatements were just errors.

“If there is intentional concealment of related-party transactions or the creation of intermediaries to help with that concealment, that certainly [could] invite criminal and civil enforcement scrutiny,” said Frenkel, who prosecuted financial crimes and also worked for the Securities and Exchange Commission.

Authorities have seized Walter’s cellphone and laptop, according to Bloomberg. Still, investigations by prosecutors and securities regulators can result in no action.

Frenkel said that if criminality is found in complex investigations such as this one, federal prosecutors will typically file mail or wire fraud charges that carry up to 20 years in prison.

It would not matter whether a company that was the victim of fraudulent conduct closed or is able to continue conducting business after being rescued financially.

“The entity’s failure is not a prerequisite for there to be a crime in intentionally misleading conduct,” he said.

The Securities and Exchange Commission is conducting a parallel investigation into both companies, according to their regulatory filings.

Frenkel said its interest could revolve around how Guggenheim Investments, Walter’s asset management firm, booked revenue from its dealings with the insurers and the disclosures of the transactions.

The SEC can seek civil monetary penalties and the return of illegal profits, and bar or suspend an individual from serving as a corporate officer or director, among other remedies.

Delaware Life and Clear Spring are part of TWG’s Group 1001 Life & Annuity.

Delaware Life has started a remediation plan to restructure some of the loans, review others and address its “control deficiencies,” including through TWG purchasing some of the loans, according to ratings outfit S&P Global. It hopes to complete the plan by the end of the year.

However, Fitch in its downgrade of Delaware Life said the plan may prove “insufficient to fully address governance, reporting, and investment oversight issues.”

The Delaware Department of Insurance did not respond to emails for comment.

Rex Frazier, a former deputy commissioner at the California Department of Insurance, said that in the situation that the insurers find themselves, the state regulator will be looking at a company’s capital sufficiency.

“The change from unaffiliated to affiliated transactions can affect the regulator’s view of whether the insurers have adequate capital and, if the regulator thinks not, then the regulator can impose additional capital requirements,” said Frazier, now president of the Personal Insurance Federation of California, a property and casualty industry trade group.

“If the regulator determines that there is inadequate capital to pay for their obligations … there are many serious remedies they can take to protect vulnerable people depending on those income streams,” he said, including seizing a company or forcing its sale.

There is no indication that either insurer is in such dire straits. Since the disclosures, rating agencies Fitch, AM Best and S&P Global have downgraded the companies’ outlook to negative, but they also have said the insurers maintain a high level of financial strength.

Walter is not the only owner of a life insurer to rely on related-party loans to fund its business dealings.

AM Best, in a December report, said affiliated investments among life insurers and annuity companies grew more than 17% annually in 2024 to more than $373 billion, driven by those owned by private equity and asset managers.

It said the growth of such investments — a type of related-party transactions — presents “regulatory risks” that may suggest “a company’s operations are more intertwined with its parent and affiliated investment management with possible negative consequences.”

“Should the parent/affiliate company experience financial stress, negative impacts to the insurer are heightened due to the higher exposure,” it said.

Frenkel said it’s good to keep in mind that at the end of their investigations, neither the Justice Department nor the SEC may take any action.

However, due to the complexity of the case, it may be a while before that point is even reached.

“This is clearly the type of investigation that the ‘where is this going?’ conversation could easily still be continuing in January of 2028,” he said.

The federal law enforcement probe into the financial affairs of the Dodgers’ controlling owner, Mark Walter, seems to focus on what looks like an obscure financial maneuver: related-party transactions.

They are deals between entities with business or personal ties, including loans, sales and other transactions, that can have legitimate reasons but pose potential conflicts of interest and typically require extra scrutiny.

Walter tapped insurers he controlled to provide most of the financing for the $2.15-billion acquisition of the Dodgers in 2012, The Times has reported — a deal later vetted by state insurance regulators.

Now, regulators reportedly are investigating whether billions of dollars’ worth of similar loans made by Walter’s companies were properly disclosed.

There are examples in which related-party transactions led to trouble, including the 2001 bankruptcy of Enron Corp., the largest at the time in Wall Street history. Bernie Madoff profited from his Ponzi scheme through related-party loans.

At issue with Walter is $21 billion in loans not disclosed to state insurance regulators that were made by two Delaware insurers he owns, according to ratings agency Fitch. The loans reportedly were made to companies with ties to Walter or his TWG Global holdings company.

The seriousness of the investigation has been highlighted by subpoenas served on the insurers and the reported seizure of Walter’s cellphone and laptop by federal authorities. Still, investigations by prosecutors and securities regulators can result in no action.

Here are more details on the risk presented by related-party transactions and why they require disclosure and extra regulatory scrutiny.

What do the investigations mean for his ownership of his sport teams?

The 66-year-old billionaire also took a majority stake in the Los Angeles Lakers last year and owns the Chelsea soccer team in the English Premier League. There is no indication yet that any of this has affected his ownership stakes, but the probe has yet to be completed.

What is the problem with related-party transactions?

Bruce Dubinsky, a forensic accountant who worked on the Enron and Madoff cases, says the issue comes down to the motivation of the parties and can be explained through an analogy.

Sell a car to a stranger and you both research its worth and come to an agreed “fair market value,” he said. Sell it to your brother, you might cut the price to “give him a deal,” and later even forgive the payments.

“That’s why, from an audit standpoint, there should be more scrutiny if you’re doing business with the left hand and the right hand, because it’s easier to manipulate things,” Dubinsky said. “Repayments can be delayed indefinitely. They are always more suspect to fraud.”

How does that play out in the insurance industry?

Insurance is one of the most regulated industries, since the companies hold premium dollars from policyholders for future claims payouts — and regulators want to ensure the money is there when it’s needed. Related-party transactions can threaten that.

“There is a conflict of interest between the policyholders’ interest in the company being profitable and the owner’s interest in getting the least expensive financing that is available,” said Jim Donelon, who served as Louisiana insurance commissioner for 18 years before stepping down in 2024.

“It potentially threatens the solvency of the company, which then threatens the welfare of the policyholders,” Donelon said.

The National Assn. of Insurance Commissioners, for whom Donelon served as president, provides guidance to regulators on how to review related-party transactions.

What are some of the most notable examples of related-party transactions turning into financial disasters?

The failure of Enron was a prime lesson in how related-party transactions can lead to a company’s downfall.

As the Houston energy trader struggled and racked up $30 billion in debt, chief financial officer Andrew Fastow thought he found a way to keep it off Enron’s books. He created off-balance sheet entities to unload the debt and took personal stakes in them, allowing him to sit on both sides of the negotiation and pocket millions.

They were “transactions with related parties that were not at arm’s length,” Dubinsky said.

The debacle was a driving force in the passage of the Sarbanes-Oxley Act of 2002, which tightened regulations over governance, accounting and related-party transactions.

What about the Madoff fraud?

The Madoff scandal, in which investors lost $17.5 billion in invested principal, operated like a typical Ponzi scheme with returns to older investors paid by money from new investors.

However, related-party transactions were key too, and some literally involved family members. Madoff’s brother, Peter, pleaded guilty to receiving $15.7 million in sham loans and giving $9.9 million in sham loans to family members. What’s more, the auditor was a related party.

“In Madoff, what were called ‘related‑party loans’ were just sham transactions — there was no real economic substance. It was simply Madoff taking money out of his own firm,” said Dubinsky, an expert witness for the government.

Is there anything comparable with the Walter probe?

The three situations appear entirely different, but the investigation into the related-party loans made by Walter’s Delaware Life and its affiliate, Clear Spring Life and Annuity, involves vast sums of money.

After receiving the subpoenas, the firms conducted internal investigations. They had reported having $1 billion in related-party loans but, after the review, they reclassified $21 billion worth of loans as related, including $4.6 billion held by Clear Spring, said Fitch analyst Jamie Tucker, senior director of North American insurance ratings.

Executives said they were unaware the loans were going to an affiliated company.

Is there any indication what the money was used for?

“Unclear at this stage,” Tucker said. “This a developing situation with ongoing investigations.”

One clue may be a report that Walter tapped insurers to fund more deals than the Dodgers acquisition. The Wall Street Journal said five insurers had provided more than $10 billion in deal funding since Walter’s financial services company, Guggenheim Partners, got into the insurance business after the 2008 financial crisis.

What have been the implications for the insurers owned by Walters?

Fitch said the financial restatement increased the two insurers’ related-party loans from 2% to 40% of their portfolios, the highest exposure among life insurers it rates in North America.

Fitch, A.M. Best and S&P Global also downgraded Delaware Life’s outlook to negative, though they said the insurer maintain a high level of financial strength.

“Our capital position and liquidity remain strong, and our financial strength ratings are unchanged,” said Group 1001, the insurers’ parent company, in a statement.

What has Walter had to say about all this?

He has not publicly commented, but a TWG spokesperson stated that, “Mark Walter and TWG have always acted in good faith, and those who have done business with Mark know him as honest and straightforward. Nothing about these transactions was any different.”

The business empire of Dodgers and Lakers owner Mark Walter reportedly is being probed by the U.S. Attorney’s Office and securities regulators over $16 billion in possibly fraudulent loans.

The loans by two Delaware life insurers that Walter owns were made to companies tied to him or his TWG Global holding company but were not disclosed as “related party” transactions as required, the Wall Street Journal reported Sunday. Related party transactions made by insurers are required to be reported to limit conflicts of interest and protect policyholders, who have an interest in the financial strength of their insurers.

Walter, 66, chief executive of Chicago investment firm Guggenheim Partners, led a group that included Todd Boehly — another Guggenheim executive — and Magic Johnson in acquiring the Dodgers for $2.15 billion in 2012, a record for a pro sports team at the time. Last year, Walter and TWG acquired a controlling stake in the Lakers at a $10 billion valuation, a new record. Walter also owns the Chelsea soccer team in the English Premier League.

Last week, the financial and sports mogul celebrated the Dodgers’ World Series victory at the White House. It was the second time in two years, following back-to-back World Series wins.

The majority of the money used to buy the Dodgers — more than $1 billion — came from insurance companies managed by Guggenheim Partners and controlled by Walter, the Times has reported.

A number of state insurance regulators investigated the purchase in 2014 and found no irregularities, the Wall Street Journal reported in 2020.

Guggenheim Partners got into the insurance business after America’s 2008 financial crisis, spotting investment opportunities. Walter figured he could increase the returns insurers got on their typical purchases of corporate bonds by connecting them to his deal pipeline, according to the Wall Street Journal, which found that five insurers had provided more than $10 billion in deal funding over the years.

The current probe began after an internal whistleblower filed a complaint questioning the way Walter’s asset-management firm, Guggenheim Investments, booked revenue associated with insurers, the Journal reported this week, and FBI agents seized at least one cellphone related to that probe.

The investigation then spread to examining $16 billion in loans, which were passed through a third party before being received by the companies tied to Walter or TWG, the Journal reported, adding that authorities are trying to determine whether that amounted to fraud, citing an unnamed source.

The insurers, Delaware Life Insurance and its affiliate Clear Spring Life and Annuity, disclosed the investigations in June regulatory filings. Delaware Life, which earlier had stated affiliated investments amounted to only about $1 billion, or 3% of its portfolio, increased that number to $16 billion.

Delaware Life executives told one credit rating firm they were unaware the loans were made to entities tied to Walter, the Journal reported. The companies said they received grand jury subpoenas in February related to an investigation by federal prosecutors in the Southern District of New York and that the Securities and Exchange Commission also is conducting a parallel investigation.

Investigations conducted by prosecutors and securities regulators often result in no action.

The Dodgers, TWG and Guggenheim did not immediately respond to messages for comment.

A TWG spokesperson told the Journal that “Mark Walter and TWG have always acted in good faith,” are cooperating with authorities and are “confident these matters will be resolved favorably.”

After conducting an internal investigation, Delaware Life said it would restructure some related-party loans, address its internal control deficiencies and moderate its business plan, according to S&P Global. While the ratings agency is maintaining its “A-” financial strength and credit ratings of Delaware Life, it reduced its outlook to “negative” because of possible higher credit risk following changes to the insurer’s portfolio.

“In addition, such outcomes could weaken Delaware Life’s regulatory relationships and damage its reputation, which could erode its competitive position,” S&P said.

“Our capital position and liquidity remain strong, and our financial strength ratings are unchanged,” Group 1001, the insurers’ parent company, said in a statement.

“We remain focused on delivering exceptional value and service to our contract and policyholders and their financial representatives,” the statement added.

Bloomberg News contributed to this report.

New surveillance footage and other evidence from Southern California Edison confirms that a century-old, idle transmission line that the utility failed to remove ignited last year’s deadly Eaton wildfire, lawyers for insurers said in a court filing.

Video obtained from a surveillance camera at Gerrish Swim & Tennis Club in Pasadena shows two bright flashes occurring in the location of the tower holding the idle line at 6:11 p.m. on Jan. 7, 2025.

The flashes correspond to the time that Edison recorded two faults, three seconds apart, on another transmission line more than five miles away, the lawyers said in the filing, citing new data provided by the utility.

Soon after the faults, residents nearby recorded videos of a fire burning at the base of the tower, which is known as M16T1.

“Southern California Edison has spent the last sixteen months attempting to forestall the inevitable legal consequences of razing a large swath of the communities of Altadena and Pasadena to the ground,” the lawyers wrote in the filing.

“The Eaton Fire could not have occurred if SCE had simply disassembled and removed Structure M16T1,” the lawyers added.

The lawyers filing the May 18 motion represent property insurers that paid tens of millions of dollars to residents who lost their homes. Their motion asks the judge to order a judgment in the insurers’ favor that would make Edison liable for the damage under inverse condemnation, a legal doctrine in the state constitution.

Courts have ruled that the doctrine requires private utilities such as Edison to pay for property they destroy, even if they haven’t been found to have acted negligently.

Kathleen Dunleavy, a spokeswoman for Edison, said the company did not learn about the existence of the swim club video until the lawyers submitted it in court with their filing.

“It’s very disappointing and inappropriate that this video was not produced in discovery,” she said. “We hope that video has been turned over to the appropriate authorities.”

Dunleavy said the company believes the lawyers’ motion “is wrong on the facts and the law.”

“We’ll respond more fully in our own court filing,” she said.

Attorneys for the insurers did not respond to requests for comment.

In a February 2025 letter to state regulators, Edison said it had detected a single fault on a line more than five miles away from Altadena about 6:11 p.m. on the night the fire ignited. It said the fault caused a brief surge of electricity on its four live transmission lines in Eaton Canyon.

The company said in the letter that it was looking into whether the power surge could have caused electricity to jump to the idle line that runs parallel to the live wires through a process called induction.

Pedro Pizarro, chief executive of Edison International, later said that a leading theory of the fire’s ignition was that the idle line became energized briefly through induction, sparking the fire.

At the same time, the company has not accepted blame for the fire, saying repeatedly that its own confidential investigation into the cause, as well as a separate inquiry by Los Angeles County and state fire officials, is continuing.

According to the court filing, evidence obtained by the lawyers shows that the company stopped using the transmission line in 1971 and designated it as “out-of-service.”

“The declaration of Out of Service shall only be used when the line … or piece of equipment is expected to remain permanently out of service,” Edison stated in an internal document known as a system operating bulletin, according to the filing.

Edison executives told The Times last year that they left the line in place because they believed it might be needed in the future.

“We have these inactive lines still available because there is a reasonable chance we’re going to use them in the future,” Shinjini Menon, Edison’s senior vice president of system planning and engineering, said then.

Dunleavy said Friday that the idle lines are kept in place for a variety of reasons, including to preserve the right of way Edison had obtained to construct them and to support future needs for more electricity as the state aims to meet its clean energy goals.

Last year, The Times reported that state regulators, knowing old electric lines posed hazards, proposed a rule in 2001 that would have forced Edison and other utilities to remove idle lines unless they could prove they would use them in the future.

Under pressure from Edison and the other companies, the rule was weakened to allow utilities to keep the unused lines in place until executives decided they were “permanently abandoned.”

In their May 18 filing, the lawyers said Edison executives had known about the risk of induction for more than 100 years. They cited a 1923 contract between Edison and Pacific Electric Railway Co. that said that “leakage of electricity or induction from or between” conductors was an inherent risk of operating multiple electrical circuits in proximity.

“That’s why SCE grounds idle lines and inspects them,” Dunleavy said of the risk.

Copies of Edison’s fault records from that night, its operating bulletin and thousands of other documents, including depositions, are sealed from public view under a protective order that Edison and lawyers for the victims asked the judge to approve last year.

The L.A. County district attorney is investigating whether Edison should be criminally prosecuted for its actions in the fire, the company said in an investor filing this year.

The fire killed at least 19 people and left thousands of families homeless.

A hearing on the lawyers’ motion is scheduled for Aug. 11 in L.A. County Superior Court.

Edison has offered to compensate victims of the fire who give up their right to sue the utility.

The company said last week that it had so far received more than 3,500 claims from about 10,000 people. It said it had extended nearly 1,900 offers to those people, totaling more than $650 million.

Many victims have refused the offers, saying they don’t fully cover their losses from the devastating blaze.

Edison has told its investors it expects to actually pay little or nothing for the fire because of a 2019 state law. The company anticipates that it will be reimbursed for its payments to victims by a $21-billion fund created by the law known as
Assembly Bill 1054.

The law shields utilities from the damages of fires sparked by their equipment as long as they follow certain requirements, including submitting a plan to state regulators for reducing the risk that their equipment sparks fires. Regulators review the plan and track whether the utilities are making progress in reducing the fire risk.

Since 2019, Edison has spent billions of dollars on making its lines safer, including by undergrounding them and installing insulated wires. Those costs continue to raise customer electric bills.

In the last 10 years, Edison’s rates increased by 101%, according to an April report by the public advocates office at the California Public Utilities Commission.

Despite the spending, Edison’s electric lines sparked more fires in 2024 than in 2019. The company blamed the increase on erratic weather that created more dried vegetation.