07:16 AM EDT, 10/06/2025 (MT Newswires) -- Tesla (TSLA) subsidiaries Tesla Insurance Services and Tesla Insurance Company face enforcement actions and possibly "significant monetary penalties" by the California Department of Insurance for allegedly failing to properly process hundreds of California automobile policyholder claims, the agency said Friday.

The state regulator accused the two Tesla units and State National Insurance of "egregious" delays in responding to policyholder claims, "unreasonable" denials and delays in paying valid claims, and failure to fairly investigate claims as well as advise policyholders of their rights.

The companies allegedly ignored the agency's repeated warnings and "instead chose to abandon their responsibility to consumers and persist with their non-compliant claims-handling practices, placing profits above people, and flouting the law with impunity," according to a statement.

The regulator said that unless the issues are resolved in favor of policyholders, the companies could face an administrative court hearing to determine whether they will face fines and be allowed to continue doing business in California.

The companies have 15 days to respond, the agency said.

Tesla did not immediately reply to MT Newswires' request for comment.