California Judge Sues Insurance Commish For Firing After Ruling Against Insurer Settlements

Former California Department of Insurance Chief Administrative Law Judge Kristin Rosi has sued Insurance Commissioner Ricardo Lara and others, alleging she was fired for challenging illegal approvals of insurance rate hikes and that officials undermined administrative law judges’ authority.

Calmatters first reported:

Kristin Rosi, former chief administrative law judge for the department, filed the lawsuit in Alameda County Superior Court in late September. She alleges that Lucy Wang — the former special counsel who was also a deputy insurance commissioner — and other top officials at the department retaliated against her for calling out their practices and refusing to comply with orders to revoke or change her rulings.

“The California Department of Insurance has spent much of 2026 approving rate increases for homeowners and auto insurers under Commissioner Ricardo Lara’s Sustainable Insurance Strategy,” Insurancebusinessmag.com reports. “A lawsuit filed by the department’s former chief administrative law judge now alleges that the approval process behind some of those increases bypassed the independent judicial oversight that state law requires.”

What’s this all about?

Rosi claims the department routinely approved home and auto rate increases through negotiated settlements with insurers and consumer groups, bypassing required review by the Administrative Hearing Bureau’s ALJs and public hearings mandated by Proposition 103.

Prop 103 gives the commissioner authority to review rates for auto, home, and other lines, requires public hearings for increases of 7% or more, and bars premiums that are excessive, inadequate, unfairly discriminatory, or otherwise unlawful. When a consumer group formally requests a hearing on a proposed increase, the department is required to hold one before approving the rate.

As Stacy Korsgaden, former candidate for Insurance Commissioner, explained:

In 1988, California reached a fork in the road. Voters passed Proposition 103, ushering in a regime of government micromanagement disguised as consumer advocacy. Price controls. Profit controls. Risk management dictated by Sacramento bureaucrats and career activists. And at the helm? An elected Insurance Commissioner, focused on politics, not the policyholders.

This wasn’t just regulation. It was socialism.

Under this system, the Client—the person insurance is meant to protect—has suffered the most. Fewer choices, higher premiums, and weakened competition have resulted, and insurance providers are struggling to survive. The results are predictable when you smother the free market and vilify profit.

In October 2024, while ruling on consumer group compensation requests, Kristin Rosi found the department was approving rate requests without following proper procedures. She alleges this exposed a pattern of using uncodified “prior rate approval procedures.” After her rulings, she says officials, including former special counsel and deputy commissioner Lucy Wang, retaliated by trying to limit ALJs’ jurisdiction, pressuring her to change or revoke rulings, and stripping authority from the judicial branch. The suit quotes Lara emailing her to “get on board” with a plan that would restrict judges to reviewing settlements only after a notice of hearing had been issued.

Rosi further alleges improper ex parte communications (e.g., officials meeting with the department’s legal team about pending matters without all parties), separation-of-powers violations within the department, whistleblower retaliation, sex discrimination, sexual orientation discrimination, and infliction of emotional distress.

Rosi also filed related California State Bar complaints against Wang and others.

What’s next?

Insurance Commissioner Lara is term-limited and on his way out of the door, but is leaving a disaster in his wake, after living like a rock star for 8 years on the taxpayers’ dime. He should be prosecuted.

Jane Kim was elected the next insurance commissioner and will take office in January. She said she is committed to transparency and accountability and plans to investigate the claims upon taking office. The first case management conference in the lawsuit is scheduled for February 16, 2027.

California’s property insurance market deteriorated substantially during Ricardo Lara’s two terms (2019–January 2027), and he leaves a mountain of problems and a mess for Kim to deal with.