Two consumer advocacy groups sued California Insurance Commissioner Ricardo Lara on Tuesday for denying them compensation for their involvement in crafting new insurance rules aimed at keeping property insurers in the state.
What happened: The Department of Insurance denied three compensation requests totaling $324,760 from Consumer Watchdog and the Consumer Federation of California Education Foundation in May and June. The agency argued the groups did not make “substantial contributions” under the state’s formal intervenor process, which allows outside groups to receive industry-funded compensation for participating in regulatory proceedings.
The advocacy groups allege in their lawsuit that Lara’s denials amounted to a “prejudicial abuse of discretion.” They asked the Los Angeles Superior Court to overturn the denials.
Why this matters: The clash escalates a long-running rift between the watchdog groups and Lara as California grapples with an exodus of home insurers amid worsening wildfire risk and record-breaking losses. Consumer Watchdog has sharply criticized Lara’s 2024 regulatory reforms as industry-friendly, including rules allowing insurers to incorporate future climate risks into rates and requiring more complete rate filings.
