AN ACT CONCERNING INSURANCE RATE FILING REQUIREMENTS.

Over a two-year period, this bill permits property and casualty insurers, including automobile insurers, to file new premium rates that raise or lower rates by up to 4% in any 12-month period and use them immediately without receiving prior approval from the Insurance Department. An insurer can apply a rate increase within the 4% band only on or after a policy renewal and following notification to the insured. Rate changes in excess of 4% require the department's prior approval.

The bill requires the insurance commissioner to order the insurer to stop using a rate change within the 4% band if she determines it is inadequate or unfairly discriminatory. (A rate is “unfairly discriminatory” if based in whole or in part on race, color, creed, or national origin. )

Currently, insurers must file rate increases or decreases with, and receive approval from, the department before using them. In reviewing the rates, the department determines if they are inadequate or unfairly discriminatory or, in a noncompetitive market, excessive. (Connecticut currently has a competitive market. )

Under the bill, a property and casualty insurer, including an automobile insurer, can file a premium rate for policies with the insurance department and begin using it effective the day it is filed if the new rate results in a state wide increase or decrease of no more than 4% for all products included in the filing. The new rate cannot be specific to an individual insured.

The bill provides that an insurer can submit more than one such rate filing to the department in any 12-month period if all filings made within the 12 months, in combination, do not result in a state-wide rate change of plus or minus 4% for all products included in the filing.

The bill requires the commissioner to order the insurer to stop using a filed rate as of a specified future date if she determines it is inadequate or unfairly discriminatory. The order must be in writing and detail how the insurer has violated Connecticut law and why the rate is inadequate or unfairly discriminatory. If the order is issued more than 30 days after the filing date, it applies prospectively only and does not affect any contract issued before the order's effective date.

Yea

Nay

(03/14/2006)