Insurance Commissioner Ricardo Lara, who recently approved an emergency rate increase for the company, called the examination one of the department's most powerful tools.

California's top insurance regulator is launching a probe into State Farm over its handling of claims from Los Angeles-area wildfires that broke out in January.

The investigation comes after California regulators approved State Farm’s request to raise premiums on an emergency interim basis. State Farm said the wildfires put the insurer in financial distress as it expected to pay $7 billion in claims related to the fires.