Eaton and Palisades Fire survivors have demanded action for 16 months. And the California Department of Insurance has finally released its market conduct exam of State Farm.

The findings are damning. And they confirm what survivors have been saying since January 2025.

State Farm delayed. State Farm underpaid. State Farm buried policyholders in red tape, shuffled them between adjusters, denied smoke damage claims without explanation, and failed to meet basic legal obligations to the people who trusted them.

The Department found violations in 52% of the 220 claims it reviewed. Extrapolate that across 11,300 residential claims. and the scale of harm becomes staggering.

We are glad this investigation is out. Survivors earned this moment.

But let’s be honest about what we are looking at.

This report is not just an indictment of State Farm. It’s also an indictment of the California Department of Insurance itself.

Thousands of families filed complaints with the department, begging it to do one simple thing: its job of enforcing our contracts.

State Farm did not conduct itself illegally in a vacuum. It did so for 16 months while the department had the authority, and the obligation, to stop it.

The LA Times documented that the Department filed survivor complaints into a black box, closing cases before disputes were resolved, and telling policyholders to stop communicating with their own handlers.

When a 32-year veteran compliance officer cited State Farm for “shoddy” and “shameful” conduct, a State Farm lawyer complained, and the department reportedly stripped her of her caseload and cut her pay.

That is not an agency protecting consumers. That is an agency protecting the industry it is supposed to oversee.

The California Department of Insurance calls itself the nation’s largest consumer protection agency. But it has not acted proactively.

Survivors held press conferences, delivered 1,500 postcards to Commissioner Lara and Governor Gavin Newsom, gathered nearly 500 firsthand accounts, and stood alongside state legislators from both fire zones.

None of this should have been necessary. The department had the responsibility and the legal authority to act on survivors’ complaints and enforce the law.

Now the Department is proposing fines and a possible one-year suspension from issuing new policies. State Farm earns an estimated $2.2 million every hour on its $240 billion investment empire.

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Commissioner Lara calls a $2 million fine historic. That fine represents less than one hour of State Farm’s investment income.

Even a license suspension does nothing to put money in the hands of families who need it right now.

Survivors are waiting for the funds we are contractually owed so we can hire contractors, sign leases, and finally get back home.

This is not just a State Farm problem. Research by the Department of Angels, a non-profit shows that 70 percent of insured Eaton and Palisades survivors report delays, denials, and underpayments across all insurers.

The failure is systemic — and so the response must be too.

We call on the department to act on every outstanding complaint that L.A. fire survivors have filed, and report publicly on outcomes. We call for a full accounting of what was done to the compliance officer and any others penalized for protecting consumers.

And we call on Commissioner Lara to pledge he will not work for the insurance industry for five years after leaving office.

Sixteen months ago, families lost everything. Insurance is the primary source of funds that Californians depend upon to recover after disaster, and that system is finally being held to account.

This investigation is a real win. Next, we need the payouts we are owed, so we can finally go home.

Joy Chen is Executive Director of the Every Fire Survivor’s Network and a former Deputy Mayor of Los Angeles.