California Property & Casualty Broker-AgentCalifornia LawMedium
An insurance company in California is preparing to implement a new rate change for its homeowners' policies. Before the new rates can be used, they must be approved by the Commissioner of Insurance. What is the maximum period of time the Commissioner has to approve or disapprove a rate filing submitted by an insurer, assuming no public hearing is requested?
- A120 days
- B30 days
- C60 days
- D90 days
Show answer & explanationAnswer & explanation
Correct answer: C. 60 days
Under Proposition 103 and the California Insurance Code, the Commissioner has 60 days to approve or disapprove a rate filing. If no action is taken within this period, the filing is deemed approved, provided no public hearing has been requested.
Why the other options are wrong
- A. This timeframe is significantly longer than the legal limit for rate filing review.
- B. This timeframe is too short for the Commissioner's review process.
- D. This timeframe is too long; a filing would be deemed approved before then.
Rate Filing Review Period
In California, the Commissioner of Insurance has 60 days to approve or disapprove an insurer's rate filing. If no action is taken within this period and no public hearing is requested, the filing is deemed approved.
- Governed by Proposition 103.
- Applies to most property and casualty lines.
- Public hearings can extend the review period.
Memory trick: Sixty days, the Commissioner decides, or the rate flies.