California’s former chief administrative law judge filed a lawsuit in Alameda County Superior Court in late September 2026, alleging she was fired for opposing the department’s methods for approving insurance rate increases.
The lawsuit alleges that Commissioner Ricardo Lara and former special counsel Lucy Wang pressured Rosi to change rulings she had made consistent with California law, CalMatters reported. Kristin Rosi, who served as the department’s top administrative judge from 2016 until her dismissal in 2025, alleges she faced whistleblower retaliation and sex discrimination after challenging how the department handles rate hikes.
“Once she raised these concerns, she swiftly found herself out of a job,” said Wendy Musell, the attorney representing Rosi, according to the Los Angeles Times.
Rosi rules settlements bypass judicial review
The legal conflict stems from an October 2024 ruling in which Rosi determined the department was approving rate increases via negotiated settlements that bypassed independent judicial review. In her ruling, Rosi maintained that such settlements still needed to be vetted by an independent judge to ensure fairness.
Passed in 1988, Proposition 103 requires the department to hold public hearings if consumer groups request them for proposed rate increases. The lawsuit alleges the department used settlements to approve large rate increases for auto and home insurers without mandatory oversight. The Los Angeles Times said that California auto insurance rates have risen more than 30% since 2022, while home insurance premiums have increased due to wildfire risks and inflation.
Consumer Watchdog, an advocacy group, has historically participated in these reviews as an intervenor. Harvey Rosenfield of Consumer Watchdog, told the Los Angeles Times that he expected all rate challenges to undergo a hearing process overseen by judges, regardless of the size of the increase.
Allegations of improper communications
Rosi’s complaints allege that Wang and Lara met with the department’s legal team regarding active cases without including insurers or intervenors.
The lawsuit also claims that senior officials began limiting the types of cases the Administrative Hearing Bureau could accept. Insurance Business reported that Lara partially vacated her ruling after Rosi issued it, pointing to a submission from the department’s Rate Enforcement Bureau which claimed that Rosi’s decision involved legal errors.
The California Department of Insurance and a spokesperson for Lara declined to comment on the litigation.
Jane Kim intends to investigate allegations
The Administrative Hearing Bureau currently operates with only one judge.
Jane Kim, who declared victory in the November 3 election to succeed Lara after her opponent conceded, intends to investigate the allegations once she takes office in January. A spokesperson for Kim told Insurance Business that the investigation is a priority for the incoming administration.
The first case management conference for the lawsuit is scheduled for February 16, 2027.
Frequently asked questions about the California insurance lawsuit
What is Proposition 103?
Proposition 103 is a 1988 California ballot measure that regulates how insurance rates are set. It requires the insurance commissioner to review rate increases and mandates public hearings when requested by consumer groups to prevent excessive premiums.
Why are insurance rates rising in California?
According to the Los Angeles Times, auto insurance rates have jumped over 30% since 2022 due to complex repairs and safety requirements. Home insurance rates have climbed because of rising construction costs, inflation, and increased wildfire risks.
What is the core allegation in the Rosi lawsuit?
The lawsuit alleges that the Department of Insurance bypassed required judicial oversight by using negotiated settlements to approve rate hikes. It further claims that Rosi was terminated in retaliation for upholding the legal requirement for independent administrative law judge reviews.
Keep reading