2023 Connecticut General Statutes › Title 38a - Insurance › Chapter 701 - Personal and Commercial Risk Insurance Rating Practices › Section 38a-688. (Formerly Sec. 38-201x). - Review of rates re personal risk insurance and residual markets in competitive or noncompetitive markets.

(a) The following procedures shall apply with respect to rates pertaining to personal risk insurance and residual markets:
(1) In a competitive market, every insurer shall file with the commissioner all rates and supplementary rate information to be used in this state, provided such rates and information need not be filed for inland marine risks that by general custom of the business are not written according to manual rules or rating plans. No such filings may be made by a rating organization on behalf of any insurer. Such rates and supplementary rate information shall be filed by the effective date of the filing or the date that premium billing notices reflecting the new rates are sent to insureds or agents, whichever is earlier. In a competitive market, if the commissioner finds, after a hearing, that an insurer's rates require closer supervision because of the insurer's financial condition or unfairly discriminatory rating practices, the insurer shall file with the commissioner at least thirty days before the effective date, all such rates and such supplementary rate information and supporting information as prescribed by the commissioner. Upon application by the filer, the commissioner may authorize an earlier effective date for the filing.
(2) In a noncompetitive market, every insurer shall file with the commissioner all rates and supplementary rate information for that market and such supporting information as is required by the commissioner. For purposes of subsection (d) of section 7-479e, sections 38a-341, 38a-387, 38a-665, subsection (b) of section 38a-672, and sections 38a-673, 38a-675, 38a-676 and 38a-686 to 38a-694, inclusive, residual markets, title insurance and credit property insurance are deemed to be noncompetitive markets. All rates and supplementary rate information and such supporting information as is required by the commissioner, shall also be filed with the commissioner for insurance provided pursuant to section 38a-328, 38a-329 or 38a-670. Such rates and supplementary rate information and supporting information required by the commissioner shall be on file with the commissioner for a waiting period of thirty days before it becomes effective, which period may be extended by the commissioner for an additional period not to exceed thirty days if the commissioner gives written notice within such waiting period to the insurer or rating organization that made the filing that the commissioner needs such additional time for the consideration of such filing. Upon written application by such insurer or rating organization, the commissioner may authorize a filing that the commissioner has reviewed to become effective before the expiration of the waiting period or any extension thereof. A filing shall be deemed to meet the requirements of sections 38a-663 to 38a-696, inclusive, unless disapproved by the commissioner within the waiting period or any extension thereof. If, within the waiting period or any extension thereof, the commissioner finds that a filing does not meet the requirements of sections 38a-663 to 38a-696, inclusive, the commissioner shall send to the insurer or rating organization which made such filing written notice of disapproval of such filing, specifying therein in what respects the commissioner finds such filing fails to meet the requirements of sections 38a-663 to 38a-696, inclusive, and stating that such filing shall not become effective. Such finding of the commissioner shall be subject to review as provided in section 38a-19.
(3) An insurer may file rates by reference, with or without deviation, to rates charged by another insurer that were filed and are in effect if the insurer's direct written premium for the applicable line of insurance is less than one-half of one per cent of the total state-wide direct written premium for that line, as determined from the annual statements filed by insurers licensed to do business in this state and as calculated by the National Association of Insurance Commissioners from its data base. Supporting information shall not be required for rates filed by reference pursuant to this subsection. For purposes of this subdivision, “insurer” includes two or more admitted insurers having a common ownership or operating in this state under common management or control.
(4) Rates filed pursuant to this section shall be filed in such form and manner as is prescribed by the commissioner. Whenever a filing made pursuant to subdivision (1) or (2) of subsection (a) of this section is not accompanied by the information upon which the insurer supports such filing and the commissioner does not have sufficient information to determine whether such filing meets the requirements of sections 38a-663 to 38a-696, inclusive, the commissioner shall require such insurer to furnish the information upon which it supports such filing and in such event the waiting period shall commence as of the date such information is furnished. The information furnished in support of a filing may include (A) the experience or judgment of the insurer making the filing, (B) its interpretation of any statistical data it relies upon, (C) the experience of other insurers, or (D) any other relevant factors.
(5) All rates, supplementary rate information and any supporting information for risks filed under subsection (d) of section 7-479e, sections 38a-341, 38a-387, 38a-665, subsection (b) of section 38a-672, and sections 38a-673, 38a-675, 38a-676 and 38a-686 to 38a-694, inclusive, shall, as soon as filed, be open to public inspection at any reasonable time. Copies may be obtained by any person on request and upon payment of a reasonable charge.
(b) Rates for insurance described in subsection (a) of this section shall be subject to review as follows:
(1) Rates subject to prefiling under subdivision (1) or (2) of subsection (a) of this section may be reviewed and disapproved before their effective date, except that rates for insurance provided pursuant to section 38a-328, 38a-329 and 38a-670 shall not be effective until approved by the commissioner. Any rate may be reviewed and disapproved subsequent to its effective date.
(2) The commissioner may disapprove a rate if the insurer fails to comply with the filing requirements of this section. The commissioner shall disapprove a rate for use in a competitive market if the commissioner finds that the rate is inadequate or unfairly discriminatory under subsection (a) of section 38a-686. The commissioner shall disapprove a rate for use in a noncompetitive or residual market if the commissioner finds the rate is excessive, inadequate or unfairly discriminatory under subsection (a) of section 38a-686.
(3) If the commissioner finds that a reasonable degree of competition does not exist in a market in accordance with section 38a-687, the commissioner may require that the insurers in that market file supporting information with respect to existing rates. If the commissioner believes that such rates may violate any of the requirements of subsection (d) of section 7-479e, sections 38a-341, 38a-387, 38a-665, subsection (b) of section 38a-672, or sections 38a-673, 38a-675, 38a-676, or 38a-686 to 38a-694, inclusive, the commissioner may proceed as provided in section 38a-678. If the commissioner believes that rates in a competitive market violate the inadequacy or unfair discrimination standards in section 38a-686 or any other applicable requirement of subsection (d) of section 7-479e, section 38a-341, 38a-387, 38a-665, subsection (b) of section 38a-672, or sections 38a-673, 38a-675, 38a-676, or 38a-686 to 38a-694, inclusive, the commissioner may require the insurers in that market to file supporting information with respect to existing rates. If after reviewing the supporting information, the commissioner continues to believe that such rates may violate these requirements, the commissioner may proceed as provided in section 38a-678. The commissioner may disapprove, without hearing, rates prefiled pursuant to subdivision (1) or (2) of subsection (a) of this section that have not become effective, provided the insurer whose rates have been disapproved shall be given a hearing pursuant to section 38a-19.
(4) If the commissioner disapproves a rate, the commissioner shall issue an order specifying the respects in which it fails to meet the requirements of subsection (d) of section 7-479e, section 38a-341, 38a-387, 38a-665, subsection (b) of section 38a-672, and sections 38a-673, 38a-675, 38a-676, and 38a-686 to 38a-694, inclusive. For rates in effect at the time of the disapproval, the commissioner shall state, within a reasonable period of time, when the further use of such rate in contracts of insurance made thereafter shall be prohibited. The commissioner shall issue such order not later than thirty days after the hearing or within such reasonable time extension as the commissioner may determine. Such order may include a provision for premium adjustment for the period after the effective date of the order for policies in effect on such date.
(5) Whenever an insurer has no legally effective rates as a result of the commissioner's disapproval of rates or other act, the commissioner shall specify interim rates. Upon appeal from any such order of the commissioner the court may, upon request of the appealing insurer, stay such order, provided the insurer places in an escrow account the difference, as received, between the disapproved rates and the interim rates specified by the commissioner. When new rates become legally effective, the commissioner shall order the escrowed funds to be distributed appropriately, with interest at the legal rate as provided in section 37-1, except that minimal refunds to policyholders are not required to be distributed.
(P.A. 82-353, S. 11, 26; P.A. 92-60, S. 21; P.A. 93-297, S. 16, 29; P.A. 01-174, S. 17; P.A. 17-15, S. 79.)
History: P.A. 82-353, S. 11, effective July 1, 1983; Sec. 38-201x transferred to Sec. 38a-688 in 1991; P.A. 92-60 made technical corrections for statutory consistency; P.A. 93-297 deleted references to repealed Sec. 38a-386, effective January 1, 1994, and applicable to acts or omissions occurring on or after said date; P.A. 01-174 amended Subsec. (a)(2) and (4) to substitute references to Sec. 38a-696 for Sec. 38a-697 and make technical changes, including changes for the purpose of gender neutrality; P.A. 17-15 made technical changes in Subsecs. (a) and (b).
See Sec. 38a-676 re review of rating plans and rules and form of commercial risk insurance contracts.