California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4.10 - Rates for Credit Property Insurance and Credit Unemployment Insurance › Article 3 - Regulation of Rates › Section 2670.8 - Rate Changes

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) An
				  insurer shall submit, for the Commissioner's approval, a proposed rate decrease
				  for an experience group subject to this Subchapter within 180 days after the
				  end of an experience period during which the credibility adjusted loss ratio
				  for the group was less than the permissible loss ratio set forth in Section
				  2670.6. Prima Facie Rates and
				  Permissible Loss Ratio for Benchmark Programs.
(b) An insurer may submit, for the
				  Commissioner's approval, a proposed rate increase for an experience group
				  subject to this Subchapter after the end of an experience period during which
				  the credibility adjusted loss ratio for the group exceeded the permissible loss
				  ratio set forth in Section
				  2670.6. Prima Facie Rates and
				  Permissible Loss Ratio for Benchmark Programs.
(c) The proposed rate shall not exceed the
				  maximum permitted premium rate.
(d)
				  The Commissioner shall disapprove submission of a proposed rate if it is not
				  demonstrated to the Commissioner that the rate has been determined in
				  accordance with applicable statutes and regulations. The Commissioner may
				  approve a rate higher than the maximum permitted premium rate if it is
				  demonstrated to the Commissioner's satisfaction that the maximum permitted
				  premium rate provides inadequate allowances for acquisition costs, including
				  commissions and other forms of compensation, expenses, profits, loss ratios,
				  reserves, and other reasonable actuarial considerations.
(e) An approved rate decrease shall become
				  effective for the experience group within 90 days of the Commissioner's
				  approval. The Commissioner may approve a later effective date if it is
				  demonstrated to the Commissioner that the approved rate cannot reasonably be
				  implemented within 90 days of the Commissioner's approval.
(f) An approved rate increase may become
				  effective at any time after the Commissioner's approval or upon the 120th day
				  after the submission of such proposal if it has not been disapproved by that
				  day.
(g) An insurer assuming the
				  business of some or all of the creditors comprising an experience group shall
				  not use rates exceeding the rates of the prior insurer, except as provided in
				  this Subchapter.
(h) An insurer may
				  transfer a creditor from an experience group with a rate lower than the prima
				  facie rate to another experience group only if the transfer would not result in
				  a higher rate for the remainder of the former group.
(i) No insurer shall transfer a creditor
				  group it already insures to an experience group with a rate higher than the
				  prima facie rate. An insurer may assign a newly insured creditor group subject
				  to a rate higher than the prima facie rate under its prior insurer into an
				  experience group subject to a rate higher than the prima facie rate only if the
				  assignment would not result in a higher rate for the newly-insured creditor
				  group or the existing experience group.
(j) The Commissioner may consider proposals
				  for rates in excess of the maximum permitted premium rates for specific
				  creditors, creditor groups or products, if it is demonstrated to him or her
				  that the maximum permitted premium rates provide inadequate allowances for
				  acquisition costs, including commissions and other forms of compensation,
				  expenses, profits, loss ratios, reserves, and other reasonable actuarial
				  considerations, given the circumstances of the particular rate
				  application.
1. New
					 section filed 3-10-2003; operative 4-9-2003. Submitted to OAL for printing only
					 pursuant to Government Code section
					 11343.8 as
					 a regulation that establishes rates in accordance with Government Code section
					 11340.9(g)
					 (Register 2003, No. 11).
2. Change without regulatory effect
					 withdrawing and repealing section pursuant to settlement agreement in Consumer
					 Credit Insurance Association v. John Garamendi (California Superior Court No.
					 03CS00533) filed 5-27-2004 pursuant to section
					 100, title 1, California Code of
					 Regulations (Register 2004, No. 22).
3. New section filed 4-28-2006;
					 operative 5-28-2006. Submitted to OAL for printing only pursuant to Government
					 Code section
					 11343.8 as
					 a regulation that establishes rates in accordance with Government Code section
					 11340.9(g)
					 (Register 2006, No. 17).
4. Change without regulatory effect
					 amending subsections (d) and (e) filed 7-14-2021 pursuant to section
					 100, title 1, California Code of
					 Regulations (Register 2021, No. 29). Filing deadline specified in Government
					 Code section
					 11349.3(a)
					 extended 60 calendar days pursuant to Executive Order
					 N-40-20.
Note: Authority cited: Sections
						779.21,
						779.36,
						12921 and
						12926,
						Insurance Code; Credit Insurance General Agents Association v. Payne, 16 Cal.3d
						651 (1976); and 20th Century v. Garamendi, 8 Cal.4th 216 (1994). Reference:
						Sections
						779.36,
						1861.01 and
						1861.05,
						Insurance Code.