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California Insurance Code Section 1861.05

Legal Research Home > California Laws > Insurance Code > California Insurance Code Section 1861.05

Approval of Insurance Rates.  (a) No rate shall be
approved or remain in effect which is excessive, inadequate, unfairly
discriminatory or otherwise in violation of this chapter. In
considering whether a rate is excessive, inadequate or unfairly
discriminatory, no consideration shall be given to the degree of
competition and the commissioner shall consider whether the rate
mathematically reflects the insurance company's investment income.
   (b) Every insurer which desires to change any rate shall file a
complete rate application with the commissioner. A complete rate
application shall include all data referred to in Sections 1857.7,
1857.9, 1857.15, and 1864 and such other information as the
commissioner may require. The applicant shall have the burden of
proving that the requested rate change is justified and meets the
requirements of this article.
   (c) The commissioner shall notify the public of any application by
an insurer for a rate change. The application shall be deemed
approved sixty days after public notice unless (1) a consumer or his
or her representative requests a hearing within forty-five days of
public notice and the commissioner grants the hearing, or determines
not to grant the hearing and issues written findings in support of
that decision, or (2) the commissioner on his or her own motion
determines to hold a hearing, or (3) the proposed rate adjustment
exceeds 7% of the then applicable rate for personal lines or 15% for
commercial lines, in which case the commissioner must hold a hearing
upon a timely request. In any event, a rate change application shall
be deemed approved 180 days after the rate application is received by
the commissioner (A) unless that application has been disapproved by
a final order of the commissioner subsequent to a hearing, or (B)
extraordinary circumstances exist. For purposes of this section,
"received" means the date delivered to the department.
   (d) For purposes of this section, extraordinary circumstances
include the following:
   (1) Rate change application hearings commenced during the 180-day
period provided by subdivision (c). If a hearing is commenced during
the 180-day period, the rate change application shall be deemed
approved upon expiration of the 180-day period or 60 days after the
close of the record of the hearing, whichever is later, unless
disapproved prior to that date.
   (2) Rate change applications that are not approved or disapproved
within the 180-day period provided by subdivision (c) as a result of
a judicial proceeding directly involving the application and
initiated by the applicant or an intervenor. During the pendency of
the judicial proceedings, the 180-day period is tolled, except that
in no event shall the commissioner have less than 30 days after
conclusion of the judicial proceedings to approve or disapprove the
application. Notwithstanding any other provision of law, nothing
shall preclude the commissioner from disapproving an application
without a hearing if a stay is in effect barring the commissioner
from holding a hearing within the 180-day period.
   (3) The hearing has been continued pursuant to Section 11524 of
the Government Code. The 180-day period provided by subdivision (c)
shall be tolled during any period in which a hearing is continued
pursuant to Section 11524 of the Government Code. A continuance
pursuant to Section 11524 of the Government Code shall be decided on
a case by case basis. If the hearing is commenced or continued during
the 180-day period, the rate change application shall be deemed
approved upon the expiration of the 180-day period or 100 days after
the case is submitted, whichever is later, unless disapproved prior
to that date.

Last modified: February 13, 2012