Two California senators have asked for an investigation into the state insurance department\u2019s handling of complaints filed by Los Angeles wildfire victims struggling to collect payouts from State Farm.<\/p>\n
The calls follow a Los Angeles Times report Thursday <\/a>that revealed a range of complaints among more than a dozen fire victims over how the state insurance department has handled their claims since the January wildfires.<\/p>\n The Times also reported that a state compliance officer who cited State Farm for numerous potential violations was punished with a 10% pay cut after a State Farm executive complained her criticisms of the insurer were \u201caccusatory.\u201d<\/p>\n The inquiry is sought by lawmakers from two fire zones: Sens. Ben Allen (D-Pacific Palisades) and Sasha Ren\u00e9e P\u00e9rez (D-Alhambra). <\/p>\n \u201cThese are pretty shocking allegations,\u201d Allen said. \u201cWe think we need to do something with this information. What form exactly it will take has yet to be determined.\u201d<\/p>\n Their request, made verbally on the Senate floor Thursday, is now before newly appointed Senate Insurance Committee Chairperson Steve Padilla (D-San Diego), who has a track record of consumer issues but also has partnered with the state\u2019s insurance commissioner on an insurance-fix bill. <\/p>\n He could call for an information hearing, or a more formal Senate investigation with powers of subpoena. <\/p>\n Padilla\u2019s office said the senator had not received a \u201cformal request,\u201d but legislative tools to address how insurers are handling claims were being considered. \u201cWe will continue to gather facts which will determine next steps,\u201d his office said in an emailed response.<\/p>\n P\u00e9rez also questioned the status of a market conduct investigation launched in June \u2014 at the request of herself and other lawmakers \u2014 into State Farm\u2019s claims practices, alongside her concern over how policyholder complaints are being treated. <\/p>\n \u201cI need to have confidence that they are taking investigations into delayed and denied claims seriously,\u201d she said Friday.<\/p>\n Consumer advocates welcomed the proposed investigation.<\/p>\n \u201cCalifornia has some of the best consumer protection laws in the nation … all we need now is to get them enforced,\u201d said Joy Chen, director of the Eaton Fire Survivors Network.<\/p>\n If granted, the inquiry would be a rare critical exam of the insurance department and how it has handled consumer complaints against State Farm and other insurers accused of denying and delaying wildfire claims. <\/p>\n A spokesperson for State Farm declined to address complaints from L.A. fire victims.<\/p>\n Allen said he believed the insurance department has helped hundreds of policyholders resolve cases. \u201cThis shouldn\u2019t take away from that hard work,\u201d he said. \u201cI don\u2019t think anyone should believe they\u2019ve been sitting on their hands and doing nothing for the people.\u201d<\/p>\n But, he added, staff of both lawmakers have gone to bat for constituents seeking assistance with the insurance department. \u201cYou shouldn\u2019t have to do that,\u201d Allen said. <\/p>\n \u201cWe want to see a responsive department. We want to see a department that is advocating for consumers,\u201d Allen said. <\/p>\n Allen and P\u00e9rez also said they wanted a fuller explanation of the discipline of a 32-year agency veteran who challenged State Farm over its handling of wildfire claims.<\/p>\n The Senate previously held an informational hearing shortly after the Jan. 7, 2025, wildfires that focused instead on the state of the insurance market in California. <\/p>\n The firestorm ravaged Pacific Palisades and Altadena, killing 31, destroying more than 16,000 structures and contaminating others with toxins and heavy metals. <\/p>\n A survey by the nonprofit Department of Angels released in January showed 70% of fire survivors<\/a> remained unable to return home and nearly half had depleted their savings. In other surveys, the Department of Angels has identified insurance problems, most frequently with State Farm, as an underlying cause.<\/p>\n Fire survivors shared accounts with The Times of complaint files that were closed prematurely and letters and emails from the state asking them to stop trying to contact their assigned state compliance officers. <\/p>\n The insurance department contends that policyholder complaints are confidential, even for those filing the complaint. Compliance officers are not allowed to tell consumers about violations, even when they see them. Instead, the 34-person team is to guide insurance companies into compliance with the law, and if that fails, may flag violations for follow up by the department\u2019s legal office or market conduct division.<\/p>\n Personnel files show compliance officer Coleen Vandepas was disciplined for using words like \u201cshoddy\u201d and \u201cshameful\u201d in accusing State Farm of violations. During hearings on her appeal, her lawyer said, the state described the function of a compliance officer as \u201cregulatory diplomacy.\u201d<\/p>\n Insurance Commissioner Ricardo Lara first broached the possibility of a market conduct investigation into State Farm\u2019s claims practices in May during a 90-minute forum with wildfire victims. The exam was announced in June. Los Angeles County in November opened its own investigation<\/a> into State Farm\u2019s claims handling. No results for either inquiry have been released.<\/p>\n In the interim, Lara\u2019s department continues to encourage policyholders to lodge insurance complaints with his agency. <\/p>\n Spokesman Michael Soller said \u201cabout 2,000\u201d consumer complaints have been filed related to the L.A. wildfires, and said the department\u2019s complaint unit has recovered $210 million that policyholders might otherwise not have received. <\/p>\n \u201cWe are investigating State Farm\u2019s behavior after the Southern California wildfires to get to the bottom of complaints that they are unfairly delaying or denying survivors\u2019 claims,\u201d he wrote to The Times. \u201cWe are prepared to use every tool available to hold the company accountable.\u201d<\/p>\n Eaton resident Ani Orinakyan, who has been fighting with State Farm to get heavy metals test results for her smoke-damaged home, was recently told the insurer would end payment for her living expenses in two weeks. <\/p>\n Her complaint to the insurance department, filed three months ago, had resulted only in a letter acknowledging receipt. \u201cOur only choice is going back to a toxic house and risk our health and lives,\u201d she said. \u201cIt\u2019s not fair that we are facing homelessness.\u201d<\/p>\n