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Commissioner Lara defeats attempt to undermine California insurance market
Plain English Summary
California Insurance Commissioner Ricardo Lara has successfully defended his authority to protect consumers and stabilize the state's insurance market. A judge recently dismissed a lawsuit from Consumer Watchdog that challenged two of Lara's Bulletins designed to address the issue of insurance companies leaving California due to fears of high costs after disasters. This ruling reinforces Lara's commitment to ensuring that Californians have access to necessary insurance coverage.
Agents should be aware that Lara's Bulletins limit how much insurance companies can pass on costs from the FAIR Plan to policyholders, ensuring that these costs are fair and manageable. Agents should stay informed about these changes and continue to support consumers in accessing the coverage they need.
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News: 2026 Press ReleaseFor Release: July 1, 2026Media Calls Only: 916-492-3566Email Inquiries: cdipress@insurance.ca.gov
LOS ANGELES— Insurance Commissioner Ricardo Lara applauded ajudge’s orderupholding his authority to protect consumers’ access and stabilize the state’s insurance market. Late yesterday, Los Angeles Superior Court Judge Tiana J. Murillo rejected a lawsuit filed by Consumer Watchdog. The lawsuit challenged two Bulletins issued by Commissioner Lara aimed at breaking the cycle of insurance unavailability. Commissioner Lara’s actions addressed what anews storycalled a “hidden crisis” of insurance companies withdrawing from California due to fear of possible major assessments by the FAIR Plan after a major disaster.
“While critics choose to complain and litigate from the sidelines, we are doing the hard work to fix a broken system, lower reliance on the FAIR Plan, and get companies back to writing policies,” said Commissioner Lara. “This victory sends a loud and clear message: The era of allowing special interests to derail consumer choice is over. We have the momentum, we have the authority, and we will continue to fight until every California has access to the coverage they deserve.”
Commissioner Laraissued a Bulletin in September 2024protecting consumers by ensuring that, in an extreme worst-case scenario, insurance companies cannot pass through all excess FAIR Plan losses to their policyholders -- they must be proportional and, if approved, be recovered over no more than two years. That worst-case scenario happened months later with the L.A. wildfires, when Commissioner Lara’s order helped stabilize the insurance market. HisFebruary 2025 Bulletinfurther provided guidance to the procedure for insurers to seek prior approval of pass-throughs under Proposition 103.
Led by Insurance Commissioner Ricardo Lara, the California Department of Insurance is the consumer protection agency for the nation's largest insurance marketplace and safeguards all of the state’s consumers by fairly regulating the insurance industry. Under the Commissioner’s direction, the Department uses its authority to protect Californians from insurance rates that are excessive, inadequate, or unfairly discriminatory, oversee insurer solvency to pay claims, set standards for agents and broker licensing, perform market conduct reviews of insurance companies, resolve consumer complaints, and investigate and prosecute insurance fraud. Consumers are urged to call 1-800-927-4357 with any questions or contact us atwww.insurance.ca.govvia webform or online chat. Non-media inquiries should be directed to the Consumer Hotline at 800-927-4357. Teletypewriter (TTY), please dial 800-482-4833.
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