California Code, Labor Code - LAB § 6148

The insurer, when insurance exists, shall not pay or provide any benefit authorized by this division unless and until the claimant makes and delivers to the insurer an agreement in writing that if he, or his dependents in the event of his death, elects or elect to bring suit against the state or the insurer with respect to the injury or death, except an action before the appeals board pursuant to the provisions of this division, or an action against the state for damages resulting from the negligence of an employee of another state agency, he or they will allow, and take all proper measures to effect, a credit to the reasonable value of all benefits which he or they have received under the provisions of this division, deductible from any verdict or judgment obtained in such suit, and from the date of commencement of suit will forego further benefits under such insurance.