Kristin Rosi, who previously held the role of Chief Administrative Law Judge at the California Department of Insurance, alleges that Insurance Commissioner Ricardo Lara and his department cut her out of settlement talks with insurers seeking rate hikes. Rosi argues this move sidesteps Proposition 103, the 1988 law that mandates public hearings and blocks insurance premiums that are excessive or unfairly discriminatory under the Insurance Code. Proposition 103, passed by California voters, lets the insurance commissioner review and approve or deny rate increases for auto and home insurance, and prohibits premiums that are "excessive, inadequate, unfairly discriminatory or otherwise in violation of the Insurance Code," as reported by Hoodline.
Rosi's lawsuit, filed in Alameda County in September 2026, states she was put on leave in January 2025 after more than ten years on the bench. The complaint names Lara, a former deputy commissioner, and the department, and alleges whistleblower retaliation, sex discrimination, infliction of emotional distress, and other claims. Rosi's attorney, Wendy Musell, told the Los Angeles Times that Rosi "was in the unenviable position of indicating that the law must be followed" and that after raising concerns, "she swiftly found herself out of a job." The case could clarify whether the department's settlement approach fits within Proposition 103 and if an administrative law judge must oversee or hold a public hearing on large rate applications.
Dispute over insurance rate process
Proposition 103 gives the insurance commissioner the power to review rate increases for auto and home insurance. It also requires public rate hearings and allows intervenors to join and be compensated for their expenses. Rosi's lawsuit claims the department has skipped public hearings for large rate hikes of 7% or more, instead making settlements outside the process set by the law. Rosi argues that settlement talks cannot replace the statutory hearing process when the requested increase hits the threshold, and that all rate challenges should go through a hearing led by administrative law judges, regardless of the increase size.
In October 2024, Rosi reportedly ruled that a private settlement involving the department, State Farm, and Consumer Watchdog improperly avoided the public-hearing process required by Proposition 103. The case involved State Farm's request for a 28.1% rate increase. Rosi still approved a $175,000 intervenor-fee payment to Consumer Watchdog for helping reduce the requested increase. In November 2024, Insurance Commissioner Ricardo Lara rejected part of Rosi's ruling in the State Farm case, saying her conclusion conflicted with longstanding departmental policy. This move is central to Rosi's claim that the commissioner and department denied her authority to conduct rate proceedings as required by Proposition 103.
Consumer Watchdog, an advocacy group founded by Proposition 103 author Harvey Rosenfield, has been the main intervenor in these cases. The group has received over $15 million in intervenor fees, a point the insurance industry criticizes. Consumer Watchdog says it has saved consumers billions by challenging unjustified premium increases. The State Farm case shows this in practice: Rosi approved a $175,000 payment to the group after a 28.1% increase was challenged. Rosenfield told the Los Angeles Times that the group objected to the department's approach but still took part in the process despite its limits. "It was my expectation that all rate challenges would go through a hearing process overseen by administrative law judges, regardless of the size of the increase," Rosenfield said.
Industry and political context
The dispute comes as California faces pressure in its insurance market for auto and homeowners coverage. Insurers want higher premiums, while regulators and consumer advocates weigh affordability and insurer availability. The department's reported practice of negotiating with insurers and consumer groups reflects an administrative model aimed at resolving rate applications without full contested hearings. Rosi's complaint argues that this practice wrongly replaces the adjudicative role given to administrative law judges. The California Department of Insurance declined to comment on the lawsuit, stating it had "no comment on this matter," as reported by the New York Post.
Rosi's lawsuit also cites media reports of Commissioner Lara's international travel, including trips to Paris, Dubai, London, and Singapore, and questions the justification for related expenses. Lara, who took office in 2019 after serving as a state senator, is leaving his post following Jane Kim's election to the seat. Kim has pledged to "make insurance affordable, available, and fair."
Home insurance rates have become a major issue in California, especially after recent wildfires. A Stanford study cited in the lawsuit found that wildfires led to an 84% jump in average homeowners' insurance premiums over about five years. California auto insurance rates have also climbed more than 30% since 2022, according to the Los Angeles Times. Musell said that both home and auto insurers are involved in the lawsuit and have raised rates in recent years.
Some in the insurance industry see Rosi's actions as overstepping. Rex Frazier, a former regulator and president of an industry trade group, told the Los Angeles Times that the dispute centers on an administrative law judge "who has attempted to exercise unprecedented powers." The department's stated position was "no comment on this matter." As of the latest reports, the lawsuit was pending and no final judicial ruling on the legality of the department's settlement process had been issued.
