Stacy A. Korsgaden

Californians are waking up to a hard truth: the Department of Insurance, bloated and broken, has become a hostile force in the state’s economy. Under the failed leadership of Commissioner Ricardo Lara, this out-of-control bureaucracy has devastated the insurance market and driven the state to the edge of collapse.

What was once a department designed to foster fairness and oversight has morphed into a political weapon: slow-moving, expensive, and utterly disconnected from reality. It no longer serves consumers. It punishes businesses, bullies carriers, and micromanages private industry into submission. The result is chaos, uncertainty, and a chilling message to every company watching from the sidelines: stay out of California.

After the worst wildfire disaster in our nation’s history, State Farm, the largest insurer in America, requested a 22% rate increase to cover unprecedented risk and surging reinsurance costs. The Department said no. Why? Because optics and politics matter more than solvency. When a watered-down 17% was finally approved, it was too little, too late. And when State Farm asked for another 30% in 2024, the Department brushed it aside, promising to “review it” sometime in 2025. They still haven’t.

Meanwhile, the financial bleeding continues. In Q1 of 2025, State Farm reported a $5.1 billion underwriting loss, which is their worst in at least 20 years. State Farm General, their California subsidiary, lost $600 million. Their reinsurance arm lost $1.1 billion. A judge overseeing the rate case said what the Department refused to acknowledge: State Farm is no longer profitable in California. The judge even recommended a $400 million capital injection from the parent company just to keep the doors open.

And what if that capital doesn’t come? What if they walk away? The market craters. Coverage vanishes. The Department of Insurance shrugs. And the same machine that created this crisis moves on, unaccountable and unchanged.

This is not leadership. This is government at its worst: bloated, arrogant, and actively harmful to the people and companies it was created to serve.

California doesn’t need more regulation. It needs reform. Real reform. It needs leaders willing to take on the Department itself and restore a functioning, competitive marketplace built on transparency, innovation, and economic common sense.

If no one steps up to clean house, there won’t be a house left standing. It’s time for someone with vision and backbone to step in.