Every November, Californians will elect someone who oversees one of the largest insurance markets in the world.
The insurance commissioner may sound like an obscure regulatory title, but the job carries enormous weight. The commissioner runs the California Department of Insurance, which regulates homeowners, auto, life, health and workers’ compensation coverage, among other lines. It’s the commissioner’s job to make sure policies remain available, premiums stay within reason, and insurance companies actually follow through on what they promise policyholders.
Those responsibilities hit especially close to home for Californians as wildfire risk and other climate-driven disasters intensify. Seven of the state’s 10 most destructive wildfires have struck within the last decade. At the same time, residents are grappling with rising costs across the board, insurance premiums included — and it’s the Department of Insurance that signs off on those rate hikes.
Most states appoint their insurance commissioner, but California is one of 11 where voters elect the position directly. The current commissioner, Democrat and former state legislator Ricardo Lara, has held the office for eight years. State Sen. Ben Allen and former San Francisco Supervisor Jane Kim, both Democrats, are now vying to replace him when his term ends in January.
Whoever wins will have to balance competing interests — consumers, insurance companies, consumer advocacy groups, wildfire survivors and more.
“The job isn’t to be a friend or an enemy to anyone, except to be a friend to the California consumer,” said Lucy Wang, a former special counsel at the Department of Insurance during Lara’s tenure. Wang left the department late last year and now works as a senior attorney at a San Francisco law firm, where she represents insurers on regulatory matters and litigation.
CalMatters spoke with experts including Wang, consumer advocacy groups and Lara’s predecessor about what the commissioner can — and can’t — actually do.
Lara declined to be interviewed for this story. Department of Insurance spokesperson Michael Soller offered this statement instead: “Guided by an unprecedented level of communication with the public across the state, [Lara] used executive power to overcome entrenched opposition from every sector and modernize insurance regulation to confront the climate crisis.”
**Setting Policy and Rules**
The commissioner sets policy and rolls out new regulations, many of which reach directly into consumers’ wallets — either through the rulemaking process or by working alongside state lawmakers to craft legislation.
Several years ago, a string of massive, deadly wildfires drove a wave of costly claims, prompting some insurers to stop writing or renewing policies in California altogether. Companies argued the rates they were allowed to charge didn’t reflect actual risk, and that the Department of Insurance was too slow approving rate increases. State lawmakers tried to pass legislation addressing the problem but failed. Gov. Gavin Newsom then issued an executive order directing Lara to fix it. Last year, Lara put new regulations in place that borrowed from those failed bills — including provisions the insurance industry had been pushing for a long time.
The new rules let insurers factor catastrophe modeling — which accounts for future risk, not just historical data — and reinsurance costs into their rate-setting. In practice, that means most Californians will see their premiums climb, if they haven’t already. The department is also trying to speed up its review of insurers’ rate-increase requests.
Lara’s department and the insurance industry both say the commissioner’s so-called sustainable insurance strategy is beginning to show results. Some companies have resumed writing policies in the state, though the department says it doesn’t yet know how many of those are genuinely new customers, according to Soller.
The FAIR Plan — a last-resort program that pools insurers required to sell fire coverage to homeowners who can’t get it anywhere else — has swelled in recent years as insurers pulled back from the market. That growth has slowed recently, which the department points to as another sign its new rules are working. As of June, the FAIR Plan still had nearly 700,000 active policies, up 8% from September 2025 and 157% from September 2022.
Another new rule that recently took effect concerns the role of “intervenors” in insurance rate reviews. Under Proposition 103, the ballot measure that governs California insurance law, any resident can intervene — hence the term — to challenge an insurer’s request for a rate hike, and get compensated for doing so. The consumer group Consumer Watchdog, founded by the author of Prop 103, has long been the state’s leading intervenor. The group says it saved Californians $6.4 billion between 2002 and 2024.
“The intervention process is an additional check to keep insurance prices from spiraling upward,” said Will Pletcher, an attorney with Consumer Watchdog. He added that insurance companies “will always be able to outspend consumers,” and that the intervention process gives the public a way to scrutinize proposed rates.
Average annual homeowners insurance premiums in California — a state with some of the priciest real estate in the country — rank in the middle nationally but have jumped 23% since 2023, according to an analysis by the comparison site Bankrate.com.
Lara’s new rule requires intervenors to make a substantial, distinct contribution to the department’s work, and that contribution must actually lead to a changed decision or other department action. Thirty-two consumer, labor and public advocacy organizations oppose the change. They argue it will make it harder for intervenors to get paid — Consumer Watchdog’s compensation totaled $14.2 million between 2002 and 2024 — and could discourage challenges to insurer rate requests, potentially leading to higher premiums for Californians.
Lara and the group have a long history of friction; Consumer Watchdog has raised questions about his ties to the insurance industry and pushed him toward greater transparency.
“The current commissioner is trying to punish [founder] Harvey [Rosenfield] and Watchdog, and that’s how we ended up with these absurd rules,” said Robert Herrell, executive director of the Consumer Federation of California, another advocacy group that occasionally intervenes in rate cases.
Herrell, who previously worked at the Department of Insurance, said relying solely on the department’s internal expertise isn’t ideal. “An outside perspective can bring fresh thinking,” he said.
Lara has also proposed a rule the insurance industry doesn’t love: requiring companies to submit their solvency risk management plans to the department.
Wang, the former department attorney, helped draft it. She said the goal is giving the department as much information as possible to keep the insurance market stable.
Insurers are already required to share financial information with the National Association of Insurance Commissioners. Industry representatives argued in public comments in July that the new rule would be redundant and burdensome, requiring new expertise and expense.
Some consumer and civil rights groups, including Public Citizen, support Lara’s proposed rule. In its public comments, a Public Citizen representative urged the department to go further — for instance, by setting specific requirements for how insurers report climate-related risks.
In another example of how the commissioner’s authority directly affects consumer costs, a California appeals court ruled in July to uphold Lara’s right to continue allowing insurers to use a driver’s marital status as an optional factor in setting auto insurance rates. That practice dates back to 1996, under regulations added by former Commissioner Chuck Quackenbush. Consumer groups have found that single drivers tend to pay more for auto insurance as a result. The case is expected to be appealed and could eventually land before the California Supreme Court.
**Holding Insurers Accountable**
The commissioner has the power to scrutinize how insurance companies behave and demand changes, or to work with the Legislature to write new laws forcing their hand.
After the 1991 Oakland Hills tunnel fire, many homeowners discovered their coverage fell short. Then-Commissioner John Garamendi pressured insurers into providing an additional $300 million in coverage. Now a member of Congress, Garamendi was seen as a fierce consumer advocate who regularly butted heads with the insurance industry — a strategy that worked in some cases and fell flat in others.
Survivors of the January 2025 Los Angeles wildfires, many of whom are still trying to rebuild their lives, called for Lara’s resignation late last year. Frustrated by delays in claims processing, they accused the Department of Insurance of failing to deliver the help they needed in the aftermath.
“Fire survivors are absolutely right that they’re being treated unfairly,” said Amy Bach, executive director of the consumer advocacy group United Policyholders. But she added that the department has limited power over many insurance industry practices, such as assigning multiple adjusters to survivors, and it cannot settle disputes between policyholders and their insurers.
“The reality is [the department] can’t step into the shoes of a private attorney,” Bach said.
Even so, Lara’s predecessor, Dave Jones, said the commissioner should take more aggressive enforcement action against insurers.
“I think it’s important to have a commissioner who’s willing to exercise the authority the law gives them, and who is independent — not just from the influence of the insurance industry, but from the governor and the Legislature as well,” Jones said.
Lara’s department investigated how State Farm handled claims from last year’s Los Angeles County wildfires. In May, the department found that State Farm had broken the law — among other things, by delaying payments and underpaying claims — and recommended multimillion-dollar fines along with a possible one-year suspension. Yet the department still hasn’t scheduled a hearing on the matter, and late last month, fire survivors filed a lawsuit against Lara and the department, asking for a judge to be assigned to the case and seeking to participate as intervenors.
The Department of Insurance also took legal action against the FAIR Plan, accusing it of denying smoke-damage claims following the Eaton and Palisades fires. Smoke damage can be harder to detect, and there are no established assessment standards — though two bills recently passed by the Legislature aim to set standards that would be the first of their kind nationally.
The department reported that survivors of last year’s fires filed roughly 13,000 smoke-damage claims. Lara ordered the creation of a task force to study those claims, and the group released its recommendations earlier this year. Some of those recommendations made their way into the bills now sitting on the governor’s desk, including a requirement for testing to detect toxic materials, which would affect what insurance is required to cover. Lara backed Assembly Bill 1795; the other measure is AB 1642.
Wildfires represent the biggest challenge facing the commissioner right now, but the job touches on many other insurance issues as well. Earlier in his tenure, Lara dealt heavily with health insurance, as Covered California, the state’s health insurance marketplace created under the Affordable Care Act, was still getting off the ground.
The commissioner can review health insurance policies and proposed rate changes but cannot block rate increases outright — despite Jones’ earlier push to expand the office’s authority to do exactly that.
Still, Jones worked to exclude certain insurers from the small-business health insurance marketplace, arguing they showed patterns of excessive rate hikes. He and other consumer groups also succeeded in capping what Covered California beneficiaries had to pay out of pocket for specialty drugs, a move that put him at odds with then-Gov. Jerry Brown’s administration.
“That made a lot of people angry with me, but it was the right thing to do,” Jones said. “We need a commissioner willing to do that.”
Original source: CalMatters
