Following the destructive wildfires in Los Angeles, California Insurance Commissioner Ricardo Lara is facing criticism for his alleged close ties with the insurance industry. Rep. John Garamendi (D-CA), California's first elected insurance commissioner, criticized Lara's proposed reforms, suggesting they favor insurance companies over consumers. Garamendi told the Los Angeles Times that Lara seems to be "giving the companies whatever they want" instead of holding them accountable.
Lara responded to the accusations, stating he lacks the authority to force insurers to issue policies and claiming Garamendi's recommendations would worsen the situation, particularly as companies withdraw from the California market. Lara, the son of Mexican immigrants, also accused Garamendi of "White mansplaining" his job.
The wildfires have left insurance companies potentially liable for an estimated $45 billion in damages. State Farm reportedly requested an emergency rate hike after the fires, which Lara rejected. His proposed reform plan aims to incentivize insurers to cover properties in high-risk areas.
A representative for Lara defended the commissioner's interactions with insurance companies, arguing that regular meetings are standard practice for regulatory bodies. The representative compared the Department of Insurance's meetings with insurers to the Department of Real Estate's meetings with realtors or the Public Utilities Commission's meetings with utility companies.
The representative also addressed allegations from Consumer Watchdog regarding $122,000 in campaign contributions from the insurance industry to Lara. A state commission found "insufficient evidence" of wrongdoing, and Lara's representative dismissed the claims as "baseless."
Lara's representative criticized Garamendi for inaction and emphasized Lara's commitment to holding insurers accountable. They highlighted Lara's town hall meetings across California and his focus on consumer protection.
Garamendi, in response, reiterated the need for the commissioner to prioritize consumers and criticized Lara for allowing insurance companies to cancel policies and raise rates without proper oversight.
State Senate Minority Leader Brian Jones also blamed Lara, Governor Gavin Newsom, and Sacramento Democrats for delaying crucial insurance reforms, warning of potential market collapse and increased costs for Californians.
