Prior to the demand for arbitration, respondent failed to *487advise petitioner of the offer to settle the underlying action and to seek petitioner’s consent to settle. Respondent also has not shown that petitioner’s right of subrogation would be preserved under the settlement agreement. Therefore, she has not satisfied the conditions precedent to arbitration (cf., Matter of Prudential Prop. & Cas. Ins. Co. [King], 198 AD2d 421) and, accordingly, the petition to stay arbitration was properly granted. Concur — Milonas, J. P., Ellerin, Wallach, Rubin and Mazzarelli, JJ.