What does California’s insurance commissioner do?

The state insurance commissioner is the top advocate for California consumers when it comes to insurance, whether that’s insurance for your car, home, or business. Their job is to make sure insurance companies are treating consumers fairly. They do that mainly by setting regulations for the industry (in other words, what insurance companies can or can’t do), handling licensing, and investigating consumer complaints.

When it comes to property or casualty insurance, the commissioner gets to approve or reject proposed rate changes, usually increases. But they also have to make sure that insurance companies can stay financially healthy in order to pay out claims — and so they don’t end up limiting services or leaving the state.

The commissioner oversees the 1,400-employee Department of Insurance, which regulates all kinds of insurance — home, auto, fire, earthquake, certain types of health insurance, even pet insurance. It also regulates the bail bonds industry — bail bonds are seen as insurance that a person will return for their trial.

Think an insurance company is engaging in fraud or price-gouging? Or have reason to think an insurance broker’s license should be revoked? You can file complaints to the Department of Insurance, and they can launch investigations. The insurance commissioner can see what’s going on across the state, punish rule-breakers and hand down new regulations to prevent future abuses.

This position was a governor-appointed role until 1988, when voters passed a ballot initiative to make it an elected position. The move was largely seen as a revolt against high insurance premiums, especially for auto insurance.

You might recognize their work from…

Many of the rules that determine how much you pay for car insurance were shaped by insurance commissioners past. In California, ZIP codes used to be a primary factor in determining drivers’ auto insurance rates — as in, if you lived in an area with a high number of vehicle crashes, you’d likely be paying more for your insurance than if you lived elsewhere, even if you’d never been in a crash yourself.

That changed in 2005, when then-insurance Commissioner John Garamendi implemented new rules saying insurers had to decrease the weight assigned to ZIP codes in determining those rates, and focus more on factors like driving records and experience.

Insurers also used to be allowed to charge men and women different rates based on their gender. That ended in 2019, when then-insurance commissioner Dave Jones made California the seventh U.S. state to prohibit that practice. (Yes, until just three years ago.)

What’s on the agenda for the next term?

One word: wildfires.

Climate change and California’s now year-round fire season have turned the wildfire insurance industry upside down. As the number of wildfires — and damage to homes and livelihoods — has ballooned in recent years, so has the number of insurance claims and the amounts of payouts to homeowners. And as insurance companies lose money, they’ve been raising premiums to make up for the costs or dropping coverage outright, leaving homeowners in high fire-risk areas with tough decisions to make about whether to risk staying or whether they can afford to move. California’s insurance commissioner will have to try and find a way to keep insurance affordable enough for people to buy it, but priced high enough that the companies have enough money to pay out claims.

Who we spoke to for this piece

Robert Stern, past President of the Center for Governmental Studies

The candidates

This section was republished from CalMatters' 2022 Voter Guide.

In 2018, Democratic state Sen. Ricardo Lara defeated Steve Poizner, who ran as an independent but was a Republican when he served as the insurance commissioner from 2007 to 2011. Lara became the California’s first openly gay statewide officeholder.

This year, Lara faced a feisty primary battle with a Democratic challenger, Assemblymember Marc Levine. Levine accused Lara of not doing enough to protect homeowners in wildfire areas from losing their coverage. Levine’s campaign also created a video and sent out mailers attacking Lara for taking donations from the industry. In response, Lara’s campaign sent out mailers criticizing Levine’s voting record on labor issues. Lara also benefited from endorsements from the California Democratic Party, California Environmental Voters, Gov. Gavin Newsom, U.S. Sen. Alex Padilla, as well as labor groups and other state and national officials.

But ultimately, a little-known cybersecurity equipment manufacturer named Robert Howell, who ran as a Republican, eked out about 7,000 more votes than Levine for the second spot in the general election. Lara and Howell will face off in November.

Robert Howell

Cybersecurity Equipment Manufacturer (Republican)

This profile is from CalMatters' 2022 Voter Guide. See their full guide for more on work history and stances on specific issues.

Robert Howell is the longtime president of a cybersecurity equipment manufacturer in Silicon Valley, and is running for insurance commissioner as a self-described “Reagan Republican.” He narrowly eked out second place in the primary, surpassing Democratic state Assemblymember Marc Levine by one-tenth of a percentage point. Howell will challenge incumbent Commissioner Ricardo Lara in the November election.

Howell says that he’s committed to helping wildfire victims, and says he will fight waste, fraud, and “abusively inflated” insurance premiums. He also says he will not take money from insurance companies.

Howell has run for office twice before. In March 2020, he competed in a primary for a state Senate seat representing District 15, a segment of Silicon Valley that includes San Jose and Cupertino. Howell finished fourth out of seven candidates, and did not advance to the general election. In November 2020, Howell ran for a spot on the board of the Santa Clara Valley Open Space Authority, but did not win.

More resources:

• Read more about Robert Howell's priorities and experience on Voter's Edge
• Read more about Robert Howell in CalMatters' Voter Guide

Ricardo Lara

Insurance Commissioner (Democrat)

This profile is from CalMatters' 2022 Voter Guide. See their full guide for more on Lara's work history and stances on specific issues.

Ricardo Lara has worked his way up the ranks of California state politics, and now he’s hoping to hold onto his post as insurance commissioner. The son of immigrants, Lara is also the first openly gay statewide elected official in the Golden State.

During his time as commissioner, Lara temporarily blocked insurance companies from dropping homeowners impacted by some wildfires in 2019 and 2020, and proposed new rules that would require insurance companies to offer discounts to homeowners who take certain steps to protect their house against fire. He also directed insurance companies to return some auto insurance premiums to California drivers, who were on the road less during the pandemic.

After the U.S. Supreme Court eliminated the constitutional right to get an abortion, Lara was vocal about his support for abortion access.

At an industry conference in 2019, Lara expressed an openness to giving insurers drivers’ data to insurers to set auto insurance rates — a move opposed by consumer advocates who raised privacy concerns. But by 2022 he had changed his tune, sparring with Elon Musk on Twitter over the tech mogul’s push for California driver data.

Lara’s tenure has also been marked by a series of controversies. First, it was for accepting tens of thousands of dollars in campaign donations from insurance industry executives after pledging not to do so. After the San Diego Union-Tribune reported the donations, Lara pledged to return the cash. Lara’s office also intervened at least four times in proceedings involving a company whose executives and their spouses made donations to Lara’s reelection campaign.

Lara also rented a second residence in Sacramento, where his work as commissioner often takes him, and stuck taxpayers with the bill. A spokesperson defended this move, telling Politico it wasn’t illegal and “had the potential to benefit taxpayers by saving on hotel costs.”

In May, the California Fair Political Practices Commission opened an investigation into Lara and several political committees over a series of political contributions. It is still underway.

More resources:

• Read more about Ricardo Lara's priorities and experience on Voter's Edge
• Read more about Ricardo Lara in CalMatters' Voter Guide