Former California Department of Insurance Chief Administrative Law Judge Kristin Rosi has filed a lawsuit against Insurance Commissioner Ricardo Lara and the department, alleging she was dismissed after challenging how regulators approved insurance rate increases, according to The Los Angeles Times.
The complaint, filed in Alameda County Superior Court in September 2026, accuses state insurance officials of bypassing legally required review procedures and negotiating settlements with insurers without sufficient judicial oversight.
- Former chief administrative law judge Kristin Rosi alleges California Insurance Commissioner Ricardo Lara removed her after she challenged the department’s handling of insurance rate increases.
- The lawsuit claims regulators bypassed administrative law judges and public hearing requirements under Proposition 103 when negotiating settlements with insurers.
- Rosi seeks damages for alleged whistleblower retaliation, sex discrimination and emotional distress. The California Department of Insurance has declined to comment.
Former insurance judge challenges California rate approval process
Rosi, who was appointed an administrative law judge in 2007, alleges that California insurance regulators routinely negotiated rate settlements with insurers and consumer representatives without submitting them for the judicial review she considered legally necessary.
The disputed procedures concern insurance rate applications, including requests from automobile and homeowners insurers.
According to the complaint, Rosi raised concerns that the department’s practices violated Proposition 103, California’s voter-approved insurance regulatory framework. She was placed on administrative leave in January 2025 and dismissed later that year.
Her attorney, Wendy Musell, maintains that Rosi lost her position after insisting that the department follow statutory requirements.
The lawsuit names Lara, the California Department of Insurance and a former deputy commissioner among the defendants. It alleges whistleblower retaliation, sex discrimination, emotional distress and other violations.
The allegations have not been established in court.
Proposition 103 dispute centers on public insurance rate hearings
California voters approved Proposition 103 in 1988, establishing a prior-approval system for property and casualty insurance rates.
Under the law, insurers generally must obtain regulatory approval before implementing new rates. The framework prohibits rates considered excessive, inadequate or unfairly discriminatory. It also provides mechanisms for public participation and challenges to proposed increases.
For personal insurance lines, rate increases exceeding 7% require a public hearing when a timely request is submitted. The corresponding statutory threshold for commercial insurance is 15%.
Rosi’s lawsuit contends that the department improperly resolved certain rate applications through negotiated settlements instead of following the required hearing and administrative review procedures. However, the interpretation of those requirements is disputed.
Rex Frazier, president of the Personal Insurance Federation of California and a former state insurance regulator, has challenged the suggestion that qualifying rate increases automatically trigger hearings regardless of whether a timely request is made.
The litigation could therefore raise questions about the authority of administrative law judges and the procedures regulators must follow before approving negotiated rate settlements.
Consumer Watchdog questions regulatory transparency
Consumer Watchdog, a California advocacy organization founded by Proposition 103 author Harvey Rosenfield, has also criticized the department’s handling of insurance rate applications.
The organization participates in the state’s intervenor process, which allows consumer representatives to challenge insurers’ proposed rates and seek reimbursement for eligible participation expenses.
Consumer Watchdog has received more than $15 mn in intervenor fees over the years and maintains that its work has prevented more than $7 bn in unwarranted premium increases.
Rosenfield said the organization has objected to the department’s use of negotiated settlements without formal hearings for more than two decades.
The California Department of Insurance has separately defended its regulatory approach and pursued reforms intended to improve transparency, efficiency and accountability in rate reviews.
Lawsuit comes amid rising California insurance premiums
The dispute follows several years of substantial premium increases and reduced insurance availability across California.
California auto insurance rates have risen more than 30% since 2022, reflecting higher vehicle values, repair costs and other claims expenses. Homeowners have faced increasing premiums driven by wildfire losses, construction inflation and rising reinsurance costs.
Some insurers have also reduced underwriting in wildfire-exposed areas, leaving households with fewer coverage options.
The controversy over rate approvals has consequently become more significant for consumers and insurers seeking timely regulatory decisions.
Lara is scheduled to leave office in January 2027 after completing eight years as California insurance commissioner. The lawsuit remains pending, and no court has determined whether Rosi’s dismissal was retaliatory or whether the challenged rate settlement procedures violated Proposition 103.
Jane Kim declared victory in California’s insurance commissioner election, holding a substantial lead over state Sen. Ben Allen in a closely watched contest over the future of the state’s troubled insurance market.
Kim, who campaigned on lowering premiums and fundamentally changing how disaster insurance operates, announced her victory as election officials continued counting ballots from Tuesday’s statewide vote.
Kim announced her victory during an appearance near Dolores Park in San Francisco, thanking labor organizations and progressive groups that supported her campaign.
Her supporters included the California Federation of Labor Unions, Service Employees International Union-California and the Working Families Party, which Kim previously led in the state.
She also received endorsements from US Sen. Bernie Sanders and California State Controller Malia Cohen.
Kim presented the election results as a mandate to challenge insurance industry practices that she argues have made coverage increasingly unaffordable and difficult to obtain.
During the campaign, she criticized insurers over rising premiums, canceled policies and disputes involving claims payments. She argued that insurance should primarily provide financial protection against unexpected losses rather than maximize returns for insurance companies.
