Former judge sues California Insurance Commissioner over termination

Kristin Rosi, a former chief administrative law judge for the California Department of Insurance, has filed a lawsuit accusing Insurance Commissioner Ricardo Lara of firing her after she objected to the department's handling of insurance rate increases. The Superior Court filing, submitted in September in Alameda County, argues that Rosi was placed on leave in January 2025 and terminated later that year in retaliation for her complaints.

Rosi contends that the department bypassed public hearings required by Proposition 103, a 1988 ballot measure, when insurers sought rate hikes of 7 percent or more. Instead of holding these hearings, the lawsuit alleges that regulators and consumer groups entered into negotiated settlements without the involvement of an administrative law judge. Her attorney, Wendy Musell, stated that Rosi was in the difficult position of insisting that the law be followed and was subsequently removed from her position.

The legal action cites several causes of action, including whistleblower retaliation, sex discrimination, and infliction of emotional distress. While the lawsuit does not specify which insurance products were at the center of the dispute, Musell confirmed that the cases involved auto and home insurers, which have implemented large premium increases in recent years. California auto insurance rates have risen more than 30 percent since 2022, driven by factors such as expensive vehicles and complex repair costs.

Consumer Watchdog, an advocacy group founded by Harvey Rosenfield, the author of Proposition 103, has long criticized the department's practice. Rosenfield noted that the group has protested the lack of hearings for more than two decades. He explained that the organization faced a choice between participating in the process despite its limitations or withdrawing entirely. Consumer Watchdog has received over $15 million in intervenor fees for its work, which it claims has saved consumers more than $7 billion in unwarranted premium increases.

The lawsuit also references widespread press accounts regarding Lara's travel expenditures. It notes that the commissioner took 32 trips to 23 countries and territories, with expenses paid by industry groups such as the National Association of Insurance Commissioners. These costs included five-star hotels, premium airline seats, and fine dining, such as a $11,626 ticket to Singapore for a 2024 conference. Lara is scheduled to leave office in January after eight years in the role, and a spokesperson for him and the department declined to comment on the lawsuit.

Rex Frazier, a former regulator and president of the Personal Insurance Federation of California, disputed Rosi's interpretation of the law. He described the situation as an ongoing dispute with a judge who attempted to exercise powers he considered unprecedented. The case highlights tensions between regulators and insurers as costs for auto and home coverage continue to climb across the state.