California insurance commissioner candidates want tough industry sanctions

Four candidates running in the state insurance commissioner’s race gathered for a forum in Altadena on Thursday, May 7, to push for tougher sanctions against insurance companies that they say mishandled claims filed by homeowners devastated by last year’s wildfires in the Los Angeles area.

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A heated moment erupted at the forum that attracted nearly 100 people from the area when the candidates argued stronger penalties are needed to levy against unnamed insurance industry executives. The finger was pointed at State Farm several times, given that it is the focus of a state investigation over mishandled wildfire claims from the January 2025 wildfires.

When asked whether industry executives should be held accountable for the mismanagement of claims filed by fire victims, or even be held criminally liable, the candidates didn’t hold back.

“Look, if laws have been broken, people need to be held accountable,” said Patrick Wolff, a 58-year-old San Francisco financial analyst with an insurance background.

Earlier this week, current state Insurance Commissioner Ricardo Lara took legal action against State Farm for the company’s alleged mishandling of wildfire claims in the Los Angeles area — the first of hundreds that operate in California.

“It’s very, very sad to see the enforcement action against State Farm,” Wolff said. “We need to get better insurance companies in here.”

In a state court filing, the insurance regulator said that it is seeking as much as $4 million in penalties on 398 violations of state law from State Farm following a seven-month-old investigation.

Lara claimed that the company underpaid claims and was slow to investigate damage to homes and possible contamination from smoke, caused by raging wildfires that destroyed huge swaths of Pacific Palisades and Altadena in early January 2025. He also wants to prohibit State Farm, California’s largest home insurer, from writing new policies for a year.

In a statement issued after Lara’s court filing, State Farm rejected any suggestions it “engaged in a general practice of mishandling or intentionally underpaying wildfire claims” and described the state’s insurance market as “dysfunctional.” The company said it has paid out more than $5.7 billion on 13,700 auto and home insurance claims related to the fires.

Eduardo “Lalo” Vargas, a 30-year-old socialist candidate with the Peace and Freedom Party and high school environmental science teacher in the Los Angeles Unified School District, received boisterous cheers for his remarks questioning whether Lara went far enough.

“We already know that the insurance companies are breaking the law, and when you break the law, you should face criminal charges,” Vargas said. “I would go so far as to recommend criminal charges to the [state] Attorney General to prosecute these insurance executives who are conducting themselves in a criminal fashion. We need true accountability.”

Vargas also called for a public insurance system paid for through a tax on those who are responsible for the climate crisis and the state’s wildfire disaster —- the fossil fuel industry, utility companies and their billionaire owners.

Democrats Steven Bradford, 67, who grew up in Gardena where he got his political start 26 years ago with a city council post, and state Sen. Benjamin Allen, a 48-year-old attorney in Santa Monica, also attended the forum at Alta Loma Park.

They both urged further penalties against State Farm — though some of that sentiment may require legislation in Sacramento.

“I’m glad that finally, finally, that everything we all knew is laid out black and white with this official investigation from the department of insurance, right there for everyone to see,” said Allen. “Any violations of the law should be received by our prosecutors.”

Allen also said that he is trying to “tighten the screws on bad behavior” by pushing for state legislation that would increase the enforcement powers of the insurance department.

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“If executives have clearly violated the law, they should be held accountable,” Bradford chimed in. “They should be prosecuted to the full extent of the law. No doubt about that.”

Bradford consistently called for more competition in the state in order to bring down premiums for homeowners’ insurance, as well as bringing more transparency into the 1,400-employee workforce within the Department of Insurance.

“I would strengthen the claims fraud review unit within the department,” he said. “That’s criminal right now, the amount of fraud going on — not by the consumers — but by the companies themselves.”

See more: California insurance commissioner candidates vow reform, fixes for FAIR Plan

For the 2026 race, a crowded field of 11 candidates is vying to replace term-limited incumbent Lara, the eighth person in the commissioner role since it became an elected position in 1988.

Democrat Jane Kim, 48, a former San Francisco supervisor from Lakeport, did not attend.

No Republican candidates were invited to the forum.

Stacy Korsgaden, 62, a Grover Beach insurance and financial services agency owner who advocated a return to free markets, citing overregulation and insufficient wildfire prevention and mitigation as the root of the system’s woes, was endorsed by the Republican Party at the party’s convention in April.

The top two finishers in the June 2 insurance commissioner’s primary, regardless of political party, will move on to the Nov. 3 general election, with the winner assuming the mantle of a job that has plenty of tough decisions to make.

None of the Democratic candidates secured an endorsement at the party’s convention in late February.

Republican contenders not at the forum include:

• Merritt Farren, a 65-year-old media and technology attorney who lost his home in last year’s Palisades fire, and became an advocate while fighting State Farm’s controversial rate hike request;

• Robert Howell, a 71-year-old San Jose cybersecurity equipment manufacturer who ran for commissioner in 2022;

• Sean Lee, a 58-year-old financial services executive from Irvine;

• Eric Thor Aarnio, 58, a contractor from the Sacramento area

Keith Davis, 40, an insurance agent from Winchester, and with the American Independent Party, wasn’t invited.

Last year’s firestorm in Altadena turned to ash more than 14,021 acres, killed 19 people, destroyed 9,414 structures and badly burned another 1,074. Customers have been slow to return to Lake Avenue businesses because so much of its community went up in flames in the wildfires.

Across town, the firestorm in the seaside communities of the Pacific Palisades and Malibu turned to ash more than 23,448 acres, killed a dozen people, destroyed 6,837 structures and damaged nearly 1,000 others before it was extinguished on Jan. 31.

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