The insurance commissioner’s job might sound like dry bureaucratic business, but it carries significant weight. The office oversees the California Department of Insurance, which regulates everything from homeowners and auto coverage to health, life and workers’ compensation policies. Part of the job is ensuring insurance stays available and affordable, while making sure companies actually follow through on what they promise policyholders.

That mission matters more than ever as wildfire risk climbs across California. Seven of the ten most destructive fires in state history have struck in just the last ten years. Add in the broader rise in the cost of living, and insurance premiums — which the department has final say over — have become a pressing concern for families statewide.

Unlike most states, where the position is appointed, California is among just 11 states that let voters pick their insurance commissioner directly. Current Commissioner Ricardo Lara, a Democrat and former state lawmaker, has held the post for eight years. His term ends in January, and two Democrats — state Sen. Ben Allen and former San Francisco Supervisor Jane Kim — are now competing to succeed him.

Whoever wins will have to juggle competing interests: everyday consumers, insurance companies, advocacy groups and wildfire survivors all pulling in different directions.

“Your role is not to be friend or foe, except (be a friend) to the California consumer,” said Lucy Wang, who served as special counsel for the department under Lara before leaving last year to join a San Francisco law firm representing insurers.

CalMatters spoke with Wang, consumer advocates and a former commissioner to better understand what the office can — and can’t — do. Lara declined an interview request. A department spokesperson, Michael Soller, said in a statement that Lara “wielded executive power to overcome entrenched opposition from all sides and modernize insurance regulation to meet the climate crisis,” following what the department described as extensive public outreach.

Shaping policy and rules

The commissioner has real power to shape rules that directly hit consumers’ wallets, either through regulation or by partnering with legislators on new laws.

A few years back, several major insurers pulled out of California or stopped renewing policies after a string of catastrophic wildfires drove up claims costs. Insurers argued that the rates they were allowed to charge didn’t reflect their actual risk, and that state regulators were too slow approving rate hikes. Lawmakers tried and failed to fix the problem through legislation, prompting Gov. Gavin Newsom to order Lara to find a solution. Last year, Lara rolled out new rules that borrowed heavily from those stalled bills — including provisions the insurance industry had pushed for years.

Under the new framework, insurers can factor in forward-looking catastrophe models — not just historical loss data — along with reinsurance costs when calculating premiums. Translation for homeowners: rates are likely to keep climbing, if they haven’t already. The department is also working to process rate-increase requests faster.

Lara’s office and the insurance industry both say the strategy, dubbed the “sustainable insurance strategy,” is showing early signs of success. Some insurers have started writing new policies again in California, though the department can’t yet say how many are actually new business, according to Soller.

The state’s FAIR Plan — the insurer of last resort for property owners who can’t find coverage elsewhere — ballooned in recent years as private insurers retreated. Its growth has slowed lately, something the department points to as evidence the new rules are having an effect. As of June, the FAIR Plan carried nearly 700,000 active policies, up 8% since last September but a staggering 157% higher than September 2022.

Another rule change affects so-called “intervenors” — members of the public who can formally challenge an insurer’s request for a rate hike under Proposition 103, the voter-approved law governing insurance regulation. Intervenors can be compensated for their efforts, and the advocacy group Consumer Watchdog, founded by the author of Prop. 103, has long dominated that role. The group says it has saved Californians $6.4 billion between 2002 and 2024.

“(The intervenor process is) an extra check on insurance prices going higher and higher,” said Will Pletcher, an attorney with Consumer Watchdog. He noted that insurance companies will always have deeper pockets than consumers, making outside scrutiny of proposed rates essential.

Homeowners in California — where home values are the nation’s highest — pay premiums that rank in the middle nationally, but those costs have jumped 23% since 2023, according to a Bankrate.com analysis.

Lara’s new regulation requires intervenors to demonstrate their input is “substantial” and separate from the department’s own analysis, and that it actually influences the outcome. Thirty-two consumer, labor and advocacy groups oppose the change, warning it will make it harder for intervenors — who earned $14.2 million collectively from 2002 to 2024 — to get paid, potentially discouraging future challenges to rate hikes and leaving consumers with higher bills.

Tension between Lara and Consumer Watchdog isn’t new. The group has repeatedly questioned his relationships with the insurance industry and pushed for greater transparency from his office.

“The current commissioner is trying to punish (founder) Harvey (Rosenfield) and Watchdog, so you have these messed-up rules,” said Robert Herrell, executive director of the Consumer Federation of California, another group that occasionally intervenes in rate cases.

Herrell, a former department employee himself, argued that outside scrutiny brings value the department’s own staff can’t always provide. “You don’t want to just rely on the expertise of the department,” he said. “Outside, fresh eyes could see new things.”

Lara has also floated a rule the insurance industry doesn’t love — requiring companies to submit plans detailing how they’ll manage solvency risk. Wang, who helped draft the proposal, said it’s about giving regulators the fullest possible picture to keep the market stable.

Insurers already report financial data to the National Association of Insurance Commissioners, and industry representatives argued in public comments this summer that the new requirement would be redundant and costly, requiring new staff and expertise. Some advocacy groups, including Public Citizen, back the proposal and want the department to go even further by mandating specific disclosures about climate-related risk.

The commissioner’s authority extends to other corners of the market, too. In July, a California appeals court upheld Lara’s right to let insurers factor marital status into auto insurance pricing — a practice allowed since 1996 under rules established by former Commissioner Chuck Quackenbush. Consumer groups have found that unmarried drivers often pay more as a result. The case is likely headed for further appeal, possibly to the California Supreme Court.

Holding insurers accountable

Beyond setting policy, the commissioner has authority to investigate insurers and push for changes in their conduct, sometimes working alongside lawmakers to force compliance.

Following the devastating 1991 Oakland Hills fire, many homeowners learned they didn’t have nearly enough coverage. Then-Commissioner John Garamendi, now a member of Congress, pressured insurers into providing an extra $300 million in coverage. Garamendi earned a reputation as an aggressive consumer advocate willing to clash with the industry — a strategy that produced mixed results over time.

More recently, survivors of the devastating January 2025 Los Angeles wildfires — many still struggling to rebuild — called on Lara to resign late last year, frustrated by what they described as slow claims processing and inadequate support from his department.

“Fire survivors are 100% right that the way they’re treated is wrong,” said Amy Bach, executive director of United Policyholders, a consumer advocacy group. But she acknowledged the department’s hands are somewhat tied when it comes to certain insurer practices, such as assigning survivors multiple adjusters, and it has no power to resolve individual disputes between policyholders and their insurers.

“The reality is that (the department) cannot stand in the shoes of a private attorney,” Bach said.

Even so, former Commissioner Dave Jones argued the office should be more aggressive about pursuing enforcement actions.

“I think it’s important to have a commissioner that is willing to exercise the authority that he or she is granted within the statutes, and is independent not just from the influence of the insurance industry, but also from the governor and the Legislature,” Jones said.

Lara’s department did launch an investigation into how State Farm handled claims from last year’s Los Angeles County wildfires. In May, the department found that State Farm had violated state law — including delaying and underpaying claims — and recommended millions of dollars in penalties along with a possible one-year suspension. However, no hearing has yet been scheduled, and fire survivors filed a lawsuit last month against Lara and the department demanding a judge be appointed to oversee the matter and seeking to participate as intervenors.

The department also took legal action against the FAIR Plan, accusing it of wrongly denying smoke-damage claims stemming from the Eaton and Palisades fires. Smoke damage can be difficult to detect and there are currently no standardized testing protocols, though two bills recently passed by the Legislature would create first-in-the-nation standards for evaluating such claims.

According to the department, survivors of last year’s fires filed roughly 13,000 smoke-damage claims. Lara convened a task force to study the issue, and its recommendations — including testing for toxic contaminants that would affect what insurance must cover — have been folded into the pending legislation now awaiting the governor’s signature. Lara has backed Assembly Bill 1795, while the companion measure is AB 1642.

Wildfires may dominate the current conversation, but the commissioner’s portfolio touches many other areas of insurance as well. During Jones’ time in office, health insurance was a central focus, coinciding with the launch of Covered California under the Affordable Care Act.

While the commissioner reviews health insurance rate changes, the office cannot actually block rate hikes — despite Jones’ unsuccessful push to expand that authority.

Still, Jones managed to bar certain insurers from California’s small-business health insurance marketplace, citing patterns of excessive rate increases. He also joined other consumer advocates in successfully pushing for caps on what Covered California enrollees pay for specialty medications, a move that put him at odds with then-Gov. Jerry Brown’s administration.

“That made people very unhappy with me, but it was the right thing to do,” Jones said. “We need a commissioner who’s willing to do that.”

Original source: CalMatters

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