Lara Forced To Redo Anti-Consumer Intervenor Proposal, Says Consumer Watchdog

LOS ANGELES, June 4, 2026 /PRNewswire/ -- Insurance Commissioner Ricardo Lara has withdrawn his proposed regulations attacking California's consumer intervenor system after Consumer Watchdog twice pointed out that he had relied on materials that were never disclosed to the public, a clear violation of California law. 

Lara's proposal, which drew widespread condemnation from citizen organizations, was withdrawn by the Insurance Department prior to the completion of the review required by the Office of Administrative Law, a state agency responsible for determining whether a regulation complies with California law and is necessary. OAL confirmed the withdrawal on Monday. Yesterday, Commissioner Lara issued a public notice promising to make previously undisclosed materials available (on request) for public comment and to resubmit the regulations. 

Lara's proposal, backed by insurance company lobbyists, would free insurance companies to overcharge Californians and violate other consumer protections by making it much harder for the public to challenge insurance company abuses under insurance reform Proposition 103.

After the public hearings ended, Lara included a personal letter on agency letterhead, along with 26,000 pages of additional documents, in the package he sent to OAL for review. Those materials had never been disclosed to the public for comment during the hearings. Consumer Watchdog noted that violation of California law in two communications to OAL, and urged OAL to reject the proposals. (Read Consumer Watchdog's April 28 and May 27 communications to OAL.)

California law provides state agencies with a face-saving opportunity to withdraw rules under consideration, before OAL rejects them. (Govt. Code § § 11349.3.)

"Commissioner Lara is trying to weaken the very consumer-enforcement system that voters created to keep insurance companies honest and that has saved Californians over $6 billion over the last 24 years," said Harvey Rosenfield, author of Proposition 103 and founder of Consumer Watchdog. "He has abused the power of his public office to silence his critics and favor the insurance companies. And he tried to rig OAL's review process by secretly including documents that the public had never seen."

"The next Insurance Commissioner will have to repair the severe damage Commissioner Lara has done to the insurance marketplace and the credibility of his office – which the voters made an elected post – and the CDI. His actions prove the need for independent consumer representation."

Lara/Industry Evade Accountability

Lara's proposal targets one of Proposition 103's central protections: the right of independent consumer representatives to participate in rate proceedings and get reimbursed for reasonable advocacy costs when they make a substantial contribution. This system helps level the playing field between policyholders and the insurance companies, which have armies of lawyers, actuaries, lobbyists, and virtually unlimited resources. Lara's proposal allows the commissioner to arbitrarily deny compensation after the fact if he disagreed with the intervenor's position and rewarded frivolous delaying tactics by insurance companies. 

In detailed comments submitted to the agency, Consumer Watchdog and other citizen organizations showed that existing rules Lara seeks to replace – in effect for decades – are working, at a cost of 25 cents for every $100 saved. (Read Consumer Watchdog's two analyses of Lara's proposal here and here.)

California law requires government officials to show that proposed regulations address real problems and comply with state law. During agency hearings on his amendments, Lara offered no evidence of the need for the regulations other than unsupported complaints of insurance companies and its allies, and his own opinions. 

Next Commissioner Will Need to Repair the Damage 

The withdrawal comes as California policyholders face record insurance costs, nonrenewals, wildfire claim disputes, and growing insurer pressure to weaken Proposition 103. The proposed rules are one of numerous policy decisions by Commissioner Lara that have favored the insurance industry at the cost of raising premiums and denying coverage for Californians. Californians will elect a new Commissioner in November. Read more about Proposition 103 here.

Consumer Watchdog is a nonprofit consumer advocacy organization that has defended the protections of Proposition 103 for more than three decades. For more information on Consumer Watchdog visit www.consumerwatchdog.org.

SOURCE Consumer Watchdog