Los Angeles, CA – Consumer Watchdog is asking the Office of Administrative Law to reject Insurance Commissioner Ricardo Lara’s proposed intervenor regulations unless the public is given a chance to respond to a last-minute letter Lara inserted into the official rulemaking record after the public comment period closed. The non-profit organization said Lara’s letter introduced new arguments, accusations, and supporting materials defending the regulations while attacking his opponents — without giving the public the notice and opportunity to comment required by California law.
Consumer Watchdog asked OAL to disapprove the rulemaking package and return it to the Department of Insurance. The Department could then either remove Lara’s letter and the new materials from the record, or it can reopen the rulemaking process, give the public notice and an opportunity to comment on Lara’s assertions, and respond to those comments before resubmitting the regulations.
“Commissioner Lara is again trying to put his thumb on the scale to do favors for insurance companies by flouting the public’s due process rights,” said Will Petcher, Consumer Watchdog’s Litigation Director. “We are asking OAL to protect those rights by sending the rulemaking package back to the Commissioner.”
Proposition 103’s intervenor process (opens in new tab), unique in the nation, gives consumers the right to independently challenge excessive insurance rates and premiums. It requires insurance companies to compensate qualified consumer representatives who make a substantial contribution to protecting policyholders.
Lara’s proposal seeks to discourage and defeat the public’s rights. Over 30 organizations (opens in new tab), a broad coalition of consumer, low income, environmental, labor, senior, and civic groups, criticized the proposal and urged him to withdraw it. (Only insurance companies and other corporate lobbies support his plan).
In response, Lara included within his official package of regulations a personal letter to the organizations, describing them as “opposing transparency and accountability,” and attacking one of the strongest critics of his policy proposals, Consumer Watchdog. Lara’s letter contains assertions and arguments, including a blog post, in defense of his regulation; these materials were not presented to the public during the consideration of his proposals.
In its letter to OAL (opens in new tab), Consumer Watchdog noted that government agencies are prohibited from introducing new arguments and analysis about a proposed regulation without giving the public notice and the opportunity to comment. Consumer Watchdog pointed out that in this situation, California law requires OAL to “disapprove” Lara’s proposed regulation and return it to the CDI, which can either remove Lara’s letter or provide public notice of his intention to rely on the letter and its contents, giving the public the opportunity to comment. Lara must also respond directly to those comments before re-submitting the regulation to OAL.
Public participation pays off for California consumers. Consumer Watchdog has saved Californians over $3.2 billion by challenging unjustified rate increases during Lara’s tenure as Insurance Commissioner, including $530 million in savings on a request by State Farm for an increase in home, condo and renters insurance. When no member of the public was watching, Lara approved 94% of the increases requested for homeowners insurance, and 88% of the increases requested for auto insurance, in rate filings approved from 2022 to 2025. When Consumer Watchdog participated as an intervenor, the percentage of the rate increase approved in homeowner insurance cases was 68% and in auto insurance cases it was 65%. Consumer Watchdog and its lawyers and insurance experts submitted detailed analyses showing how the other elements of Lara’s “Sustainable Insurance Strategy” – allowing insurers to use secret algorithms to set rates, and to pass-through reinsurance expenses and FAIR Plan losses to their customers – will raise insurance rates across the state.
Read Consumer Watchdog’s letter to OAL here. (opens in new tab)
Read Consumer Watchdog’s Announcement (opens in new tab) of Settlement with State Farm.
