Department of Insurance, Consumer Watchdog, and State Farm reach settlement agreement on State Farm’s prior emergency interim rate request

News: 2026 Press ReleaseFor Release: March 6, 2026Media Calls Only: 916-492-3566Email Inquiries: cdipress@insurance.ca.gov SACRAMENTO, Calif.— The California Department of Insurance, Consumer Watchdog, and State Farm General Insurance Company today reached athree-party settlement agreementin the full rate hearing proceeding that is underway to review State Farm’s emergency rate request. The agreement will provide financial relief to many policyholders while ensuring continued coverage for State Farm policyholders while California’s insurance market stabilizes. This settlement agreement, now set to be reviewed by an impartial Administrative Law Judge, follows months of public review and negotiation called for by Insurance Commissioner Ricardo Lara under California’s voter-approved Proposition 103 rate hearing process. The settlement reflects the Department’s responsibility to carefully review insurance rates and ensure they are justified, transparent, and fair for California consumers. Whenhe called for the hearing on March 14, 2025, Insurance Commissioner Ricardo Lara stated: “To resolve this matter, I am ordering State Farm to respond to questions in an official hearing, promoting transparency and a path forward.” This proceeding called for by Commissioner Lara required State Farm to provide detailed financial information and testimony regarding its rate request and financial condition, after the Eaton and Palisades fires in Los Angeles, as part of the public review process prescribed under Prop 103. Under California’s rate hearing regulations, the Insurance Commissioner is separated from the negotiation and any details of the evidentiary proceeding while it is underway in order to preserve an impartial and fact-based process. Since that time, the rate hearing proceeding — including at least nine public appearances and advocacy before the Administrative Law Judge regarding multiple discovery motions and disputed evidentiary issues between the parties, as well as status and scheduling conferences, and also including three formal and multiple informal settlement conferences between the parties — has been conducted with participation from experts from the California Department of Insurance and representatives from Consumer Watchdog and State Farm. Under the settlement agreement reached between the California Department of Insurance, State Farm, and Consumer Watchdog, the Commissioner’s prior order granting State Farm’s request for an emergency interim rate increase has been confirmed with the following modifications: In addition, the agreement includes an extension of the current moratorium on homeowners, rental dwelling, condominium, and renters non-renewals and cancellations for at least one additional year, providing continued stability for affected policyholders while the Department continues its broader efforts to stabilize California’s insurance market under its Sustainable Insurance Strategy. “This rate hearing process reflects the strength of California’s transparent and long-standing consumer protections,” said Michael Soller, Deputy Commissioner for Communications and Press Relations. “Our Department’s role is to carefully review the data and hold insurance companies accountable so Californians are not paying more than is justified.” Under California’s administrative rate hearing procedures, the parties have now submitted the three-party settlement agreement and supporting documentation to the Administrative Law Judge for review. Settlement Process Timeline Separately, the California Department of Insurance continues its market conduct examination of State Farm General, which is reviewing the company’s claims handling practices and compliance with California law. Results from that examination are expected later this spring. 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. This Google™ translation feature is provided for informational purposes only. The Department of Insurance is unable to guarantee the accuracy of this translation and is therefore not liable for any inaccurate information resulting from the translation application tool. The Department of Insurance