Garamendi

State Insurance Commissioner John Garamendi appeals from the judgment in an administrative mandate action which determined that a debt cancellation program offered by car finance lender Automotive Funding Group, Inc., was not insurance and therefore was not subject to regulation by the Department of Insurance. For the reasons set forth below, we affirm the judgment.

FACTS AND PROCEDURAL HISTORY

The State Insurance Commissioner contends that a debt cancellation program offered by used car lender Automotive Funding Group, Inc. (AFG), was in fact insurance, subject to regulation by the Department of Insurance (the Department). Rejecting a contrary decision by an administrative law judge, the Department issued a decision and order to show cause requiring AFG to stop offering its Loss Damage Waiver program (LDW) until it obtained an insurance sales license. AFG brought an administrative mandate action in the superior court, which found that the LDW was not insurance and entered judgment for AFG.

The mandate action was tried primarily on certain stipulated facts, along with the sales and LDW contracts entered into by the car buyers. The evidence showed that AFG buys…