California: CDI Starts Rulemaking on Completed Property and Casualty Rate Application Proposed Regulation

The California Department of Insurance has started rulemaking on its completed property/casualty rate application proposed regulation. The public hearing is scheduled for March 26 at 3 p.m. PDT. Written comments to the CDI are also due on March 26.

According to the CDI’s media statement:

“Insurance Commissioner Ricardo Lara today announced the first of several regulatory rule change packages aimed at streamlining the Department’s rate approval process…. These proposed changes are intended to modernize the submission requirements for auto, home, business, and other property and casualty insurance rate applications, ensuring that insurance companies adhere to clear guidelines and provide comprehensive information from the outset for the Department’s review.”

The proposed regulation is intended to clarify rate application submission requirements and front load the delivery of key rate application information and supporting materials. The proposed regulation states:

“A complete rate application shall include any and all criteria, guidelines, systems, manuals, models and algorithms the insurer uses to determine whether to accept, examine, inspect, cancel, non-renew, or re-underwrite a risk, or to modify an applicant’s or insured’s coverage or coverage options. Specifically, the complete rate application shall include, without limitation, a complete set of, and any proposed changes to, any and all of the following:

“(1) An insurer’s eligibility guidelines as defined in Sections 2360.0 through 2360.7; (2) Any and all criteria, guidelines, systems, manuals, models and algorithms an insurer uses to reduce, increase, or restrict the number of policies written or renewed, or restrict the coverages offered, in specific geographic areas such as ZIP codes, counties, or territories, for any reason, including over-concentration; and (3) Any method or set of standards, parameters, rules, requirements or procedures that is used by an insurer, agent, broker, or underwriter to assist in the determination of whether to accept, examine, inspect, cancel, non-renew, or re-underwrite a risk, or to modify an applicant’s or insured’s coverage or coverage options.”

NAMIC will be coordinating its advocacy efforts with its state trades partners, the Personal Insurance Federation of California and the Pacific Association of Domestic Insurance Companies. Please provide your feedback to me by March 1.