reglab/statecodes huggingface dataset:
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4.8 - Review of Rates › Article 2 - Definitions › Section 2642.3 - Inadequate

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
"Inadequate" rates are rates under which a reasonably
					 efficient insurer is not expected to have the opportunity to earn a fair return
					 on the investment that is used to provide the insurance. In determining whether
					 a rate is inadequate, the Commissioner shall consider the competing interests
					 of consumers in lower prices and of investors in prices that yield high
					 returns, and the Commissioner shall consider that insurance is imbued with the
					 public interest and sometimes legally required.
1. New
					 section filed 8-13-91 as an emergency; operative 8-13-91 (Register 92, No. 3).
					 A Certificate of Compliance must be transmitted to OAL 12-11-91 or emergency
					 language will be repealed by operation of law on the following
					 day.
2. Repealed by operation of Government Code section
					 11346.1(g)
					 (Register 92, No. 15).
3. New section refiled 2-14-92 as an
					 emergency; operative 2-14-92 (Register 92, No. 15). A Certificate of Compliance
					 must be transmittted to OAL 6-15-92 or emergency language will be repealed by
					 operation of law on the following day.
4. Repealed by operation of
					 Government Code section
					 11346.1(g)
					 and new section filed 3-15-95; operative 3-15-95. Submitted to OAL for printing
					 only pursuant to Government Code section
					 11343(a)(1)
					 (Register 95, No. 11).
Note: Authority cited: Sections
						1861.01 and
						1861.05,
						Insurance Code; 20th Century v. Garamendi, 8 Cal.4th 216 (1994). Reference:
						Sections
						1861.01 and
						1861.05,
						Insurance Code; Calfarm Insurance Company v. Deukmejian (1989) 48 Cal.3d
						805.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4.8 - Review of Rates › Article 2 - Definitions › Section 2642.4 - Pure Premium. [Repealed]

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
1. New
					 section filed 8-13-91 as an emergency; operative 8-13-91 (Register 92, No. 3).
					 A Certificate of Compliance must be transmitted to OAL 12-11-91 or emergency
					 language will be repealed by operation of law on the following
					 day.
2. Repealed by operation of Government Code section
					 11346.1(g)
					 (Register 92, No. 15).
3. New section refiled 2-14-92 as an
					 emergency; operative 2-14-92 (Register 92, No. 15). A Certificate of Compliance
					 must be transmittted to OAL 6-15-92 or emergency language will be repealed by
					 operation of law on the following day.
4. Repealed by operation of
					 Government Code section
					 11346.1(g)
					 and new section filed 3-15-95; operative 3-15-95. Submitted to OAL for printing
					 only pursuant to Government Code section
					 11343(a)(1)
					 (Register 95, No. 11).
5. Repealer filed 1-3-2007; operative
					 4-3-2007. Submitted to OAL for printing only pursuant to Government Code
					 section
					 11340.9(g)
					 (Register 2007, No. 1).
Note: Authority cited: Sections
						1861.01 and
						1861.05,
						Insurance Code; and 20th Century v. Garamendi, 8 Cal.4th 216 (1994). Reference:
						Sections
						1861.01 and
						1861.05,
						Insurance Code; and Calfarm Insurance Company v. Deukmejian (1989) 48 Cal.3d
						805.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4.8 - Review of Rates › Article 2 - Definitions › Section 2642.5 - Rating Period

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
"Rating period" means the period that must be accounted for
					 in the application. The rating period shall be one year commencing on the
					 effective date of the rates. Nothing in this section shall be construed to
					 specify the frequency of rate filings.
1. New
					 section filed 8-13-91 as an emergency; operative 8-13-91 (Register 92, No. 3).
					 A Certificate of Compliance must be transmitted to OAL 12-11-91 or emergency
					 language will be repealed by operation of law on the following
					 day.
2. Repealed by operation of Government Code section
					 11346.1(g)
					 (Register 92, No. 15).
3. New section refiled 2-14-92 as an
					 emergency; operative 2-14-92 (Register 92, No. 15). A Certificate of Compliance
					 must be transmittted to OAL 6-15-92 or emergency language will be repealed by
					 operation of law on the following day.
4. Repealed by operation of
					 Government Code section
					 11346.1(g)
					 and new section filed 3-15-95; operative 3-15-95. Submitted to OAL for printing
					 only pursuant to Government Code section
					 11343(a)(1)
					 (Register 95, No. 11).
5. Amendment filed 1-3-2007; operative
					 4-3-2007. Submitted to OAL for printing only pursuant to Government Code
					 section
					 11340.9(g)
					 (Register 2007, No. 1).
Note: Authority cited: Sections
						1861.01 and
						1861.05,
						Insurance Code; and 20th Century v. Garamendi, 8 Cal.4th 216 (1994). Reference:
						Sections
						1861.01 and
						1861.05,
						Insurance Code; and Calfarm Insurance Company v. Deukmejian (1989) 48 Cal.3d
						805.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4.8 - Review of Rates › Article 2 - Definitions › Section 2642.6 - Recorded Period

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
"Recorded period" means the historical period from which
					 data are taken to provide the basis for the proposed rate. The recorded period
					 shall be the most recent three years for which reliable data are available,
					 unless
(1) the credibility of that
				  experience is less than the value contained in section
				  2644.23(i). In
				  that case, additional years shall be added to the recorded period until
				  sufficient years are used to reach the credibility standard set forth in
				  section 2644.23(i). In no
				  case shall the recorded period exceed six years.
(2) the data is fully credible with fewer
				  than three years experience. In that case, only as many years as needed to be
				  fully credible shall be used.
1. New
					 section filed 8-13-91 as an emergency; operative 8-13-91 (Register 92, No. 3).
					 A Certificate of Compliance must be transmitted to OAL 12-11-91 or emergency
					 language will be repealed by operation of law on the following
					 day.
2. Repealed by operation of Government Code section
					 11346.1(g)
					 (Register 92, No. 15).
3. New section refiled 2-14-92 as an
					 emergency; operative 2-14-92 (Register 92, No. 15). A Certificate of Compliance
					 must be transmittted to OAL 6-15-92 or emergency language will be repealed by
					 operation of law on the following day.
4. Repealed by operation of
					 Government Code section
					 11346.1(g)
					 and new section filed 3-15-95; operative 3-15-95. Submitted to OAL for printing
					 only pursuant to Government Code section
					 11343(a)(1)
					 (Register 95, No. 11).
5. Amendment filed 1-3-2007; operative
					 4-3-2007. Submitted to OAL for printing only pursuant to Government Code
					 section
					 11340.9(g)
					 (Register 2007, No. 1).
6. Amendment of subsection (1) filed
					 5-16-2008; operative 5-16-2008. Submitted to OAL for printing only pursuant to
					 Government Code section
					 11340.9(g)
					 (Register 2008, No. 20).
Note: Authority cited: Sections
						1861.01 and
						1861.05,
						Insurance Code; and 20th Century v. Garamendi, 8 Cal.4th 216 (1994). Reference:
						Sections
						1861.01 and
						1861.05,
						Insurance Code; and Calfarm Insurance Company v. Deukmejian (1989) 48 Cal.3d
						805.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4.8 - Review of Rates › Article 2 - Definitions › Section 2642.7 - Lines of Insurance

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
				  Wherever in this subchapter insurance is required to be classified by line, the
				  classification shall be into one of the following categories:
(1) Fire
(2) Allied Lines
(3) Farmowners multiple peril
(4) Homeowners multiple peril
(5) Commercial multiple peril
				  liability
(6) Commercial multiple
				  peril non-liability
(7) Inland
				  marine
(8) Medical
				  malpractice
(9)
				  Earthquake
(10) Other
				  liability
(11) Products
				  liability
(12) Private passenger
				  automobile liability
(13) Private
				  passenger automobile physical damage
(14) Commercial automobile
				  liability
(15) Commercial
				  automobile physical damage
(16)
				  Aircraft
(17) Fidelity
(18) Surety
(19) Burglary and theft
(20) Boiler and
				  machinery.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4.8 - Review of Rates › Article 2 - Definitions › Section 2642.8 - Most Actuarially Sound

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The "most actuarially sound" choice is the most appropriate
					 choice within the range of permissible actuarially sound choices, considering
					 both the relative likelihood of all choices within the range and the context in
					 which the choice will be employed.
1. New
					 section filed 5-16-2008; operative 5-16-2008. Submitted to OAL for printing
					 only pursuant to Government Code section
					 11340.9(g)
					 (Register 2008, No. 20).
Note: Authority cited: Sections
						1861.01 and
						1861.05,
						Insurance Code; and 20th Century v. Garamendi, 8 Cal.4th 216 (1994). Reference:
						Sections
						1861.01 and
						1861.05,
						Insurance Code; and Calfarm Insurance Company v. Deukmejian (1989) 48 Cal.3d
						805.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4.8 - Review of Rates › Article 3 - General Provisions › Section 2643.1 - Common Methodology for Review

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
While companies remain free to formulate their rates under
					 any methodology, the Commissioner's review of those rates must use a single,
					 consistent methodology.
1. New
					 section filed 8-13-91 as an emergency; operative 8-13-91 (Register 92, No. 3).
					 A Certificate of Compliance must be transmitted to OAL 12-11-91 or emergency
					 language will be repealed by operation of law on the following
					 day.
2. Repealed by operation of Government Code section
					 11346.1(g)
					 (Register 92, No. 15).
3. New section refiled 2-14-92 as an
					 emergency; operative 2-14-92 (Register 92, No. 15). A Certificate of Compliance
					 must be transmittted to OAL 6-15-92 or emergency language will be repealed by
					 operation of law on the following day.
4. Repealed by operation of
					 Government Code section
					 11346.1(g)
					 and new section filed 3-15-95; operative 3-15-95. Submitted to OAL for printing
					 only pursuant to Government Code section
					 11343(a)(1)
					 (Register 95, No. 11).
Note: Authority cited: Sections
						1861.01 and
						1861.05,
						Insurance Code; 20th Century v. Garamendi, 8 Cal.4th 216 (1994). Reference:
						Sections
						1861.01 and
						1861.05,
						Insurance Code; Calfarm Insurance Company v. Deukmejian (1989) 48 Cal.3d
						805.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4.8 - Review of Rates › Article 3 - General Provisions › Section 2643.2 - Rating Basis. [Repealed]

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
1. New
					 section filed 8-13-91 as an emergency; operative 8-13-91 (Register 92, No. 3).
					 A Certificate of Compliance must be transmitted to OAL 12-11-91 or emergency
					 language will be repealed by operation of law on the following
					 day.
2. Repealed by operation of Government Code section
					 11346.1(g)
					 (Register 92, No. 15).
3. New section refiled 2-14-92 as an
					 emergency; operative 2-14-92 (Register 92, No. 15). A Certificate of Compliance
					 must be transmittted to OAL 6-15-92 or emergency language will be repealed by
					 operation of law on the following day.
4. Repealed by operation of
					 Government Code section
					 11346.1(g)
					 and new section filed 3-15-95; operative 3-15-95. Submitted to OAL for printing
					 only pursuant to Government Code section
					 11343(a)(1)
					 (Register 95, No. 11).
5. Repealer filed 1-3-2007; operative
					 4-3-2007. Submitted to OAL for printing only pursuant to Government Code
					 section
					 11340.9(g)
					 (Register 2007, No. 1).
Note: Authority cited: Sections
						1861.01 and
						1861.05,
						Insurance Code; and 20th Century v. Garamendi, 8 Cal.4th 216 (1994). Reference:
						Sections
						1861.01 and
						1861.05,
						Insurance Code; and Calfarm Insurance Company v. Deukmejian (1989) 48 Cal.3d
						805.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4.8 - Review of Rates › Article 3 - General Provisions › Section 2643.3 - Total Aggregate Earned Premiums

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) The determination whether rates are
				  excessive or inadequate is made on the basis of the aggregate earned premiums
				  the rates are expected to produce. Thus, the proposed and approved rates are
				  required to reflect the actual distribution of premiums, including discounts,
				  dividends, credits, and other rating factors affecting aggregate premiums.
				  Rates that are neither excessive nor inadequate may still be unlawful and
				  disapproved if they are unfairly discriminatory or otherwise violate chapter 9
				  (commencing with section
				  1851) of part 2 of division 1 of
				  the Insurance Code.
(b) Rate
				  applications (Form CAR-1 (last revised 1/94)) shall be filed on a line-by-line
				  basis, as set forth in section
				  2642.7. The application shall be
				  accompanied by the rating manual, rating plan, all policy forms to which
				  changes would have a rate impact, or such other documents as may be necessary
				  to show the distribution of premium within the line. The Commissioner shall
				  require the filing of such other information as the Commissioner deems
				  necessary to review the application.
(c) The earned premium of retrospectively
				  rated and loss-sensitive insurance shall be the manual premium.
1. New
					 section filed 8-13-91 as an emergency; operative 8-13-91 (Register 92, No. 3).
					 A Certificate of Compliance must be transmitted to OAL 12-11-91 or emergency
					 language will be repealed by operation of law on the following
					 day.
2. Repealed by operation of Government Code section
					 11346.1(g)
					 (Register 92, No. 15).
3. New section refiled 2-14-92 as an
					 emergency; operative 2-14-92 (Register 92, No. 15). A Certificate of Compliance
					 must be transmittted to OAL 6-15-92 or emergency language will be repealed by
					 operation of law on the following day.
4. Repealed by operation of
					 Government Code section
					 11346.1(g)
					 and new section filed 3-15-95; operative 3-15-95. Submitted to OAL for printing
					 only pursuant to Government Code section
					 11343(a)(1)
					 (Register 95, No. 11).
5. Change without regulatory effect amending
					 subsection (b) 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
						1861.01 and
						1861.05,
						Insurance Code; 20th Century v. Garamendi, 8 Cal.4th 216 (1994). Reference:
						Sections
						1861.01 and
						1861.05,
						Insurance Code; Calfarm Insurance Company v. Deukmejian (1989) 48 Cal.3d
						805.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4.8 - Review of Rates › Article 3 - General Provisions › Section 2643.4 - Line-By-Line Ratemaking. [Repealed]

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
1. New
					 section filed 8-13-91 as an emergency; operative 8-13-91 (Register 92, No. 3).
					 A Certificate of Compliance must be transmitted to OAL 12-11-91 or emergency
					 language will be repealed by operation of law on the following
					 day.
2. Repealed by operation of Government Code section
					 11346.1(g)
					 (Register 92, No. 15).
Note: Authority cited: Sections
						1861.01,
						1861.05,
						12921 and
						12926 of
						the Insurance Code; sections
						11152 and
						11342.2 of
						the Government Code. Reference: Sections
						1861.01 and
						1861.05,
						Insurance Code; Calfarm Insurance Company v. Deukmejian (1989) 48 Cal.3d
						805.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4.8 - Review of Rates › Article 3 - General Provisions › Section 2643.5 - Accounting Principles

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Statutory accounting principles ("SAP"), rather than
					 generally accepted accounting principles ("GAAP"), shall be used to measure
					 equity.
1. New
					 section filed 8-13-91 as an emergency; operative 8-13-91 (Register 92, No. 3).
					 A Certificate of Compliance must be transmitted to OAL 12-11-91 or emergency
					 language will be repealed by operation of law on the following
					 day.
2. Repealed by operation of Government Code section
					 11346.1(g)
					 (Register 92, No. 15).
3. New section refiled 2-14-92 as an
					 emergency; operative 2-14-92 (Register 92, No. 15). A Certificate of Compliance
					 must be transmittted to OAL 6-15-92 or emergency language will be repealed by
					 operation of law on the following day.
4. Repealed by operation of
					 Government Code section
					 11346.1(g)
					 and new section filed 3-15-95; operative 3-15-95. Submitted to OAL for printing
					 only pursuant to Government Code section
					 11343(a)(1)
					 (Register 95, No. 11).
Note: Authority cited: Sections
						1861.01 and
						1861.05,
						Insurance Code; 20th Century v. Garamendi, 8 Cal.4th 216 (1994). Reference:
						Sections
						1861.01 and
						1861.05,
						Insurance Code; Calfarm Insurance Company v. Deukmejian (1989) 48 Cal.3d
						805.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4.8 - Review of Rates › Article 3 - General Provisions › Section 2643.6 - Interjurisdictional Allocations

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
				  Data shall be submitted with a rate application. Where reliable data exist for
				  California losses, defense and cost containment expenses, ancillary income,
				  commissions, state premium taxes, loss reserves, and unearned premium reserves,
				  those data shall be used. Where data are maintained on a multi-state basis
				  only, or where California data are not reliable, the multi-state data shall be
				  allocated to California as follows:
(1)
				  Defense and cost containment and adjusting and other expenses: By dollars of
				  incurred losses.
(2) Commissions
				  and brokerage: By earned premium.
(3) Taxes, licenses, and fees: By actual
				  statutory tax rate for premium tax; by premium for licenses and fees.
(4) Other Acquisition: By number of written
				  exposures or policies.
(5) General:
				  By number of earned exposures or policies.
For purposes of this subsection, the determination whether
					 data are "reliable" shall be made on the basis of whether the Commissioner
					 finds, under the circumstances, that the data are authentic and believable. In
					 making that finding, the Commissioner shall consider, among other things,
					 whether the data were recorded by persons and under circumstances likely to
					 produce accurate data, whether the data were relied upon by the party in its
					 business, and whether the data are consistent with other
					 data.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4.8 - Review of Rates › Article 3 - General Provisions › Section 2643.7 - Data Availability

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Where an insurer can demonstrate that data required by
					 these regulations are not available, the Commissioner shall authorize the use
					 of substitute data. An insurer seeking authority under this section shall
					 include with its request
(a) the
				  reasons why the data are unavailable to it, with appropriate reference to the
				  practices of other, comparably situated insurers;
(b) justification for use of the substitute
				  data proposed, together with a discussion of other feasible
				  alternatives;
(c) a plan for
				  providing the data required by these regulations, taking into account the
				  practical requirements of full compliance and the size and scope of the
				  insurer's affected operations.
1. New
					 section filed 8-13-91 as an emergency; operative 8-13-91 (Register 92, No. 3).
					 A Certificate of Compliance must be transmitted to OAL 12-11-91 or emergency
					 language will be repealed by operation of law on the following
					 day.
2. Repealed by operation of Government Code section
					 11346.1(g)
					 (Register 92, No. 15).
3. New section refiled 2-14-92 as an
					 emergency; operative 2-14-92 (Register 92, No. 15). A Certificate of Compliance
					 must be transmittted to OAL 6-15-92 or emergency language will be repealed by
					 operation of law on the following day.
4. Repealed by operation of
					 Government Code section
					 11346.1(g)
					 and new section filed 3-15-95; operative 3-15-95. Submitted to OAL for printing
					 only pursuant to Government Code section
					 11343(a)(1)
					 (Register 95, No. 11).
Note: Authority cited: Sections
						1861.01 and
						1861.05,
						Insurance Code; 20th Century v. Garamendi, 8 Cal.4th 216 (1994). Reference:
						Sections
						1861.01 and
						1861.05,
						Insurance Code; Calfarm Insurance Company v. Deukmejian (1989) 48 Cal.3d
						805.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4.8 - Review of Rates › Article 3 - General Provisions › Section 2643.8 - Factors Calculated by Commissioner

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Where regulations within Article 4 of this title specify
					 that the Commissioner calculate and publish values for use in review of rate
					 applications, the values used shall be the most recently published values,
					 provided that the values were published at least 45 days before the receipt of
					 the rate application by the Department's Rate Filing Bureau. Otherwise, the
					 values used shall be those published immediately prior to publication of the
					 most recent values.
If the Commissioner does not publish the values required by
					 these regulations within the prescribed time period, the Rate Filing Bureau
					 and, if applicable, the Administrative Hearing Bureau shall review the
					 application by performing the calculations in the manner set forth in these
					 regulations. Values used by the Rate Filing Bureau shall be updated by the
					 Administrative Hearing Bureau before the close of the evidentiary hearing if
					 one year or more has passed since the application was
					 received.
1. New
					 section filed 1-3-2007; operative 4-3-2007. Submitted to OAL for printing only
					 pursuant to Government Code section
					 11340.9(g)
					 (Register 2007, No. 1).
2. Change without regulatory effect amending
					 first paragraph filed 8-27-2020 pursuant to section
					 100, title 1, California Code of
					 Regulations (Register 2020, No. 35).
Note: Authority cited: Sections
						1861.01 and
						1861.05,
						Insurance Code; and 20th Century v. Garamendi, 8 Cal.4th 216 (1994). Reference:
						Sections
						1861.01 and
						1861.05,
						Insurance Code; and Calfarm Insurance Company v. Deukmejian (1989) 48 Cal.3d
						805.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4.8 - Review of Rates › Article 4 - Determination of Reasonable Rates › Section 2644.1 - Excessive or Inadequate Rates

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
No rate shall be approved or remain in effect that is above
					 the maximum permitted earned premium, as defined in section
					 2644.2, or is below the minimum
					 permitted earned premium, as defined in section
					 2644.3. Where the Commissioner
					 finds that a rate or proposed rate is excessive or inadequate, the rate or
					 proposed rate shall not be used nor remain in effect. If the rate or proposed
					 rate is excessive, the Commissioner shall indicate the highest rate that would
					 not be excessive, which the insurer may adopt by amendment to its application,
					 or the Commissioner shall reject the rate in its entirety. If the rate or
					 proposed rate is inadequate, the Commissioner shall indicate the lowest rate
					 that would not be inadequate, which the insurer may adopt by amendment to its
					 application, or the Commissioner shall reject the rate in its
					 entirety.
1. New
					 section filed 8-13-91 as an emergency; operative 8-13-91 (Register 92, No. 3).
					 A Certificate of Compliance must be transmitted to OAL 12-11-91 or emergency
					 language will be repealed by operation of law on the following
					 day.
2. Repealed by operation of Government Code section
					 11346.1(g)
					 (Register 92, No. 15).
3. New section refiled 2-14-92 as an
					 emergency; operative 2-14-92 (Register 92, No. 15). A Certificate of Compliance
					 must be transmittted to OAL 6-15-92 or emergency language will be repealed by
					 operation of law on the following day.
4. Repealed by operation of
					 Government Code section
					 11346.1(g)
					 and new section filed 3-15-95; operative 3-15-95. Submitted to OAL for printing
					 only pursuant to Government Code section
					 11343(a)(1)
					 (Register 95, No. 11).
Note: Authority cited: Sections
						1861.01 and
						1861.05,
						Insurance Code; 20th Century v. Garamendi, 8 Cal.4th 216 (1994). Reference:
						Sections
						1861.01 and
						1861.05,
						Insurance Code; Calfarm Insurance Company v. Deukmejian (1989) 48 Cal.3d
						805.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4.8 - Review of Rates › Article 4 - Determination of Reasonable Rates › Section 2644.2 - Maximum Permitted Earned Premium

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The maximum permitted earned premium is calculated as
					 follows:
(a) the quotient of
(1) the sum of
(A)
(i)
				  projected losses, as defined in section
				  2644.4,
(ii) plus projected defense and cost
				  containment expenses, as defined in section
				  2644.8,
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4.8 - Review of Rates › Article 4 - Determination of Reasonable Rates › Section 2644.3 - Minimum Permitted Earned Premium

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The minimum permitted earned premium is calculated as
					 follows:
(a) the quotient of
(1) the sum of
(A)
(i)
				  projected losses, as defined in section
				  2644.4,
(ii) plus projected defense and cost
				  containment expenses, as defined in section
				  2644.8,
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4.8 - Review of Rates › Article 4 - Determination of Reasonable Rates › Section 2644.5 - Catastrophe Adjustment

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
In those insurance lines and coverages where catastrophes
					 occur, the catastrophic losses of any one accident year in the recorded period
					 are replaced by a loading based on a multi-year, long-term average of
					 catastrophe claims. The number of years over which the average shall be
					 calculated shall be at least 20 years for homeowners multiple peril fire, and
					 at least 10 years for private passenger auto physical damage. Where the insurer
					 does not have enough years of data, the insurer's data shall be supplemented by
					 appropriate data. The catastrophe adjustment shall reflect any changes between
					 the insurer's historical and prospective exposure to catastrophe due to a
					 change in the mix of business. There shall be no catastrophe adjustment for
					 private passenger auto liability.
1. New
					 section filed 8-13-91 as an emergency; operative 8-13-91 (Register 92, No. 3).
					 A Certificate of Compliance must be transmitted to OAL 12-11-91 or emergency
					 language will be repealed by operation of law on the following
					 day.
2. Repealed by operation of Government Code section
					 11346.1(g)
					 (Register 92, No. 15).
3. New section refiled 2-14-92 as an
					 emergency; operative 2-14-92 (Register 92, No. 15). A Certificate of Compliance
					 must be transmittted to OAL 6-15-92 or emergency language will be repealed by
					 operation of law on the following day.
4. Repealed by operation of
					 Government Code section
					 11346.1(g)
					 and new section filed 3-15-95; operative 3-15-95. Submitted to OAL for printing
					 only pursuant to Government Code section
					 11343(a)(1)
					 (Register 95, No. 11).
5. Amendment filed 1-3-2007; operative
					 4-3-2007. Submitted to OAL for printing only pursuant to Government Code
					 section
					 11340.9(g)
					 (Register 2007, No. 1).
Note: Authority cited: Sections
						1861.01 and
						1861.05,
						Insurance Code; and 20th Century v. Garamendi, 8 Cal.4th 216 (1994). Reference:
						Sections
						1861.01 and
						1861.05,
						Insurance Code; and Calfarm Insurance Company v. Deukmejian (1989) 48 Cal.3d
						805.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4.8 - Review of Rates › Article 4 - Determination of Reasonable Rates › Section 2644.6 - Loss Development

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
"Loss development" is the process by which reported losses
					 are adjusted for anticipated payout patterns. Loss development shall be
					 presented as a loss-development triangle, based on the dollar-weighted average
					 of the ratios of losses for the three most recent accident-years, policy-years
					 or report-years available for a reporting interval. Filings shall contain both
					 paid losses and case-specific reserves, stated separately. Loss development
					 shall employ either paid losses or the sum of paid losses and case-specific
					 reserves. The insurer shall submit both the factors and ultimate losses or
					 claims for the paid and incurred loss and the reported and the paid claims
					 development calculations, and shall demonstrate that its selection is the most
					 actuarially sound. Loss development data shall exclude catastrophes. Where the
					 loss development factors within a given line significantly vary by subline, by
					 size of loss, or by coverage, separate loss development factors shall be
					 calculated in accordance with that evidence.
1. New
					 section filed 8-13-91 as an emergency; operative 8-13-91 (Register 92, No. 3).
					 A Certificate of Compliance must be transmitted to OAL 12-11-91 or emergency
					 language will be repealed by operation of law on the following
					 day.
2. Repealed by operation of Government Code section
					 11346.1(g)
					 (Register 92, No. 15).
3. New section refiled 2-14-92 as an
					 emergency; operative 2-14-92 (Register 92, No. 15). A Certificate of Compliance
					 must be transmittted to OAL 6-15-92 or emergency language will be repealed by
					 operation of law on the following day.
4. Repealed by operation of
					 Government Code section
					 11346.1(g)
					 and new section filed 3-15-95; operative 3-15-95. Submitted to OAL for printing
					 only pursuant to Government Code section
					 11343(a)(1)
					 (Register 95, No. 11).
5. Amendment filed 1-3-2007; operative
					 4-3-2007. Submitted to OAL for printing only pursuant to Government Code
					 section
					 11340.9(g)
					 (Register 2007, No. 1).
6. Amendment filed 5-16-2008; operative
					 5-16-2008. Submitted to OAL for printing only pursuant to Government Code
					 section
					 11340.9(g)
					 (Register 2008, No. 20).
Note: Authority cited: Sections
						1861.01 and
						1861.05,
						Insurance Code; and 20th Century v. Garamendi, 8 Cal.4th 216 (1994). Reference:
						Sections
						1861.01 and
						1861.05,
						Insurance Code; and Calfarm Insurance Company v. Deukmejian (1989) 48 Cal.3d
						805.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4.8 - Review of Rates › Article 4 - Determination of Reasonable Rates › Section 2644.9 - Consideration of Mitigation Factors; Wildfire Risk Models

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Applicability.
(1) An insurer that applies or uses a rate
				  that is developed with, determined by or relies upon, in whole or in part, a
				  rating plan that segments, creates a rate differential, or surcharges the
				  premium based upon a policyholder or applicant's wildfire risk shall comply
				  with this Section
				  2644.9. If a rate that is
				  developed with, determined by or relies upon a rating plan that complies with
				  this section is approved, in whole or in part, and thereafter such rating plan
				  is replaced, or modified in any manner, including but not limited to, the
				  inclusion of new factors, or different criteria or algorithms, the insurer
				  shall, prior to implementing the new or modified rating plan, file a new rate
				  application, which shall include the new or modified rating plan. No such new
				  or modified rating plan shall be used unless and until the new rate application
				  is approved.
(2) A rating plan
				  shall satisfy the requirements of subdivision (d)(1) of this Section
				  2644.9 only if the rating plan
				  taken as a whole, including the operation of any Wildfire Risk Models that may
				  be incorporated into the rating plan, takes into account and reflects the
				  factors described in subdivisions (d)(1)(A) and (d)(1)(B) of this section.
				  Nothing in this section shall be construed to require the use of a Wildfire
				  Risk Model.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4.8 - Review of Rates › Article 4 - Determination of Reasonable Rates › Section 2644.10 - Excluded Expenses

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The following expense items shall not be allowed for
					 ratemaking purposes:
(a) Political
				  contributions and lobbying.
(b)
				  Executive compensation that exceeds the reasonable amount for such
				  compensation.
For purposes of this computation, the following shall
					 apply:
(1) "Executive" means the
				  insurer's five highest-paid policymaking positions in each insurance
				  group.
(2) "Compensation" means the
				  total cash paid, including salary and bonus.
(3) "Maximum permissible executive
				  compensation" means:
(A) For the highest paid
				  executive in the group:
max comp = 1077(101.4600 + 0.4060 log
						X)
(B) For the
				  second-highest paid executive in the group:
max comp = 1077(101.4140 + 0.3490 log
						X)
(C) For the
				  third-highest paid executive in the group:
max comp = 1077(101.2310 + 0.3820 log
						X)
(D) For the
				  fourth-highest paid executive in the group:
max comp= 1077(101.2470 + 0.3580 log
						X)
(E) For the
				  fifth-highest paid executive in the group:
max comp = 1077(101.2460 + 0.3420 log
						X)
where X is the greater of (i) the insurer's total
					 countrywide direct earned premium for the most recent completed calendar year
					 for lines of business subject to Proposition 103 divided by 1,000,000 or (ii)
					 70.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4.8 - Review of Rates › Article 4 - Determination of Reasonable Rates › Section 2644.11 - Expense Trend. [Repealed]

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
1. New
					 section filed 8-13-91 as an emergency; operative 8-13-91 (Register 92, No. 3).
					 A Certificate of Compliance must be transmitted to OAL 12-11-91 or emergency
					 language will be repealed by operation of law on the following
					 day.
2. Repealed by operation of Government Code section
					 11346.1(g)
					 (Register 92, No. 15).
3. New section refiled 2-14-92 as an
					 emergency; operative 2-14-92 (Register 92, No. 15). A Certificate of Compliance
					 must be transmittted to OAL 6-15-92 or emergency language will be repealed by
					 operation of law on the following day.
4. Repealed by operation of
					 Government Code section
					 11346.1(g)
					 and new section filed 3-15-95; operative 3-15-95. Submitted to OAL for printing
					 only pursuant to Government Code section
					 11343(a)(1)
					 (Register 95, No. 11).
5. Repealer filed 1-3-2007; operative
					 4-3-2007. Submitted to OAL for printing only pursuant to Government Code
					 section
					 11340.9(g)
					 (Register 2007, No. 1).
Note: Authority cited: Sections
						1861.01 and
						1861.05,
						Insurance Code; and 20th Century v. Garamendi, 8 Cal.4th 216 (1994). Reference:
						Sections
						1861.01 and
						1861.05,
						Insurance Code; and Calfarm Insurance Company v. Deukmejian (1989) 48 Cal.3d
						805.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4.8 - Review of Rates › Article 4 - Determination of Reasonable Rates › Section 2644.13 - Projected Ancillary Income

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
"Projected ancillary income" means projected net income to
					 the insurer, or an affiliate of the insurer, not derived from insurance
					 premiums subject to this subchapter but derived from operations directly
					 related to insurance subject to this subchapter. Projected ancillary income
					 shall be expressed on a per-exposure basis. Premium financing revenues and
					 membership dues shall be included within projected ancillary income.
					 "Affiliate" means a company having common management, ownership, or control
					 with the insurer.
1. New
					 section filed 8-13-91 as an emergency; operative 8-13-91 (Register 92, No. 3).
					 A Certificate of Compliance must be transmitted to OAL 12-11-91 or emergency
					 language will be repealed by operation of law on the following
					 day.
2. Repealed by operation of Government Code section
					 11346.1(g)
					 (Register 92, No. 15).
3. New section refiled 2-14-92 as an
					 emergency; operative 2-14-92 (Register 92, No. 15). A Certificate of Compliance
					 must be transmittted to OAL 6-15-92 or emergency language will be repealed by
					 operation of law on the following day.
4. Repealed by operation of
					 Government Code section
					 11346.1(g)
					 and new section filed 3-15-95; operative 3-15-95. Submitted to OAL for printing
					 only pursuant to Government Code section
					 11343(a)(1)
					 (Register 95, No. 11).
5. Editorial correction amending section
					 (Register 2005, No. 18).
Note: Authority cited: Section
						1861.01 and
						1861.05,
						Insurance Code; 20th Century v. Garamendi, 8 Cal.4th 216 (1994). Reference:
						Section
						1861.01 and
						1861.05,
						Insurance Code; Calfarm Insurance Company v. Deukmejian (1989) 48 Cal.3d
						805.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4.8 - Review of Rates › Article 4 - Determination of Reasonable Rates › Section 2644.14 - Variable Expense Factor

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The "variable expense factor" means the sum of the
					 commission rate and the state premium tax rate.
1. New
					 section filed 8-13-91 as an emergency; operative 8-13-91 (Register 92, No. 3).
					 A Certificate of Compliance must be transmitted to OAL 12-11-91 or emergency
					 language will be repealed by operation of law on the following
					 day.
2. Repealed by operation of Government Code section
					 11346.1(g)
					 (Register 92, No. 15).
3. New section refiled 2-14-92 as an
					 emergency; operative 2-14-92 (Register 92, No. 15). A Certificate of Compliance
					 must be transmittted to OAL 6-15-92 or emergency language will be repealed by
					 operation of law on the following day.
4. Repealed by operation of
					 Government Code section
					 11346.1(g)
					 and new section filed 3-15-95; operative 3-15-95. Submitted to OAL for printing
					 only pursuant to Government Code section
					 11343(a)(1)
					 (Register 95, No. 11).
Note: Authority cited: Sections
						1861.01 and
						1861.05,
						Insurance Code; 20th Century v. Garamendi, 8 Cal.4th 216 (1994). Reference:
						Sections
						1861.01 and
						1861.05,
						Insurance Code; Calfarm Insurance Company v. Deukmejian (1989) 48 Cal.3d
						805.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4.8 - Review of Rates › Article 4 - Determination of Reasonable Rates › Section 2644.15 - Profit Factors

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) The
				  "maximum profit factor" means
(1) The maximum
				  permitted after-tax rate of return, as defined in section
				  2644.16,
(2) divided by the product of
(A) the leverage factor, as defined in
				  section 2644.17,
(B) multiplied by the underwriting federal
				  income tax factor, as defined in section
				  2644.18.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4.8 - Review of Rates › Article 4 - Determination of Reasonable Rates › Section 2644.16 - Rate of Return

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) The
				  maximum permitted after-tax rate of return means the risk-free rate, as defined
				  in section
				  2644.20(d), plus
				  6%.
(b) The minimum permitted
				  after-tax rate of return shall be -6%, which the Commissioner finds is high
				  enough to prevent any undue risk of insolvency and to prevent injury to
				  competition through predatory pricing.
(c) The Commissioner may increase or decrease
				  the maximum permitted after-tax rate of return by not more than 2% if the
				  Commissioner finds financial market conditions to be such that the difference
				  between the risk-free rate and the cost of capital is significantly different
				  from its historical average.
1. New
					 section filed 8-13-91 as an emergency; operative 8-13-91 (Register 92, No. 3).
					 A Certificate of Compliance must be transmitted to OAL 12-11-91 or emergency
					 language will be repealed by operation of law on the following
					 day.
2. Repealed by operation of Government Code section
					 11346.1(g)
					 (Register 92, No. 15).
3. New section refiled 2-14-92 as an
					 emergency; operative 2-14-92 (Register 92, No. 15). A Certificate of Compliance
					 must be transmittted to OAL 6-15-92 or emergency language will be repealed by
					 operation of law on the following day.
4. Repealed by operation of
					 Government Code section
					 11346.1(g)
					 and new section filed 3-15-95; operative 3-15-95. Submitted to OAL for printing
					 only pursuant to Government Code section
					 11343(a)(1)
					 (Register 95, No. 11).
5. Repealer and new section filed 1-3-2007;
					 operative 4-3-2007. Submitted to OAL for printing only pursuant to Government
					 Code section
					 11340.9(g)
					 (Register 2007, No. 1).
6. New subsection (c) filed 5-16-2008;
					 operative 5-16-2008. Submitted to OAL for printing only pursuant to Government
					 Code section
					 11340.9(g)
					 (Register 2008, No. 20).
7. Change without regulatory effect
					 amending subsection (c) 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
						1861.01 and
						1861.05,
						Insurance Code; and 20th Century v. Garamendi, 8 Cal.4th 216 (1994). Reference:
						Sections
						1861.01 and
						1861.05,
						Insurance Code; and Calfarm Insurance Company v. Deukmejian (1989) 48 Cal.3d
						805.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4.8 - Review of Rates › Article 4 - Determination of Reasonable Rates › Section 2644.18 - Federal Income Tax Factors

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
				  "Underwriting federal income tax factor" means
1.0 minus the prospective federal income tax rate on
					 underwriting. The Commissioner finds that the prospective federal income tax
					 rate on underwriting is 21%.
(b) "Investment federal income tax factor"
				  means
1.0 minus the prospective federal income tax rate on
					 investment income. The prospective federal income tax rate on investment income
					 shall be calculated using the weighted yield, adjusted for investment expenses,
					 computed in section
					 2644.20 and shall take into
					 account any tax preferences and exemptions for the income from each asset class
					 and from each category of bond issuer. The Commissioner finds that the
					 prospective federal income tax rate on the investment income from taxable
					 bonds, mortgage loans, real estate, cash and short-term investments and on
					 investment expenses is 21%, on capital gains is 21%, on tax-exempt bond
					 interest is 5.25% and on stock dividends is 13.125%. For investment income on
					 other invested assets, the prospective federal income tax rate shall be the
					 weighted average of the tax rates on the above categories.
1. New
					 section filed 8-13-91 as an emergency; operative 8-13-91 (Register 92, No. 3).
					 A Certificate of Compliance must be transmitted to OAL 12-11-91 or emergency
					 language will be repealed by operation of law on the following
					 day.
2. Repealed by operation of Government Code section
					 11346.1(g)
					 (Register 92, No. 15).
3. New section refiled 2-14-92 as an
					 emergency; operative 2-14-92 (Register 92, No. 15). A Certificate of Compliance
					 must be transmittted to OAL 6-15-92 or emergency language will be repealed by
					 operation of law on the following day.
4. Repealed by operation of
					 Government Code section
					 11346.1(g)
					 and new section filed 3-15-95; operative 3-15-95. Submitted to OAL for printing
					 only pursuant to Government Code section
					 11343(a)(1)
					 (Register 95, No. 11).
5. Amendment of section heading and repealer
					 and new section filed 1-3-2007; operative 4-3-2007. Submitted to OAL for
					 printing only pursuant to Government Code section
					 11340.9(g)
					 (Register 2007, No. 1).
6. Amendment filed 2-23-2018; operative
					 2-23-2018. Exempt from the Administrative Procedure Act and OAL review pursuant
					 to Government Code section
					 11340.9(g);
					 submitted to OAL for filing and printing only pursuant to Government Code
					 section
					 11343.8
					 (Register 2018, No. 8).
Note: Authority cited: Sections
						1861.01 and
						1861.05,
						Insurance Code; and 20th Century v. Garamendi, 8 Cal.4th 216 (1994). Reference:
						Sections
						1861.01 and
						1861.05,
						Insurance Code; and Calfarm Insurance Company v. Deukmejian (1989) 48 Cal.3d
						805.