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. 38, September 20, 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.
