SB150 By Senator Blackwell RFD Banking and Insurance Rd 1 05-MAR-15

SYNOPSIS: Under existing law, a rate filing made by an insurer of personal lines insurance written on risks in this state that provides for an overall statewide rate increase or decrease takes effect upon approval by the Commissioner of Insurance.

This bill would provide that such a rate filing for private personal automobile insurance may take effect the date it is filed.

This bill would provide that a filing submitted pursuant to this act shall be considered in compliance with state law unless the Commissioner of the Department Insurance determines that the filing is unreasonably high, inadequate, or unfairly discriminatory.

A BILL TO BE ENTITLED AN ACT

Relating to the Department of Insurance; to provide that a rate filing made by an insurer of private personal automobile insurance written on risks in this state who is authorized to do business in this state that provides for an overall statewide rate increase or decrease of no more than 15 percent in the aggregate for all coverages may take effect the date it is filed; and to provide that a filing submitted pursuant to this act shall be considered in compliance with state law unless the Commissioner of the Department of Insurance determines that the filing is unreasonably high, inadequate, or unfairly discriminatory.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. This act shall be known and may be cited as the "Personal Automobile Insurance Market Competitiveness Act."

Section 2. This act shall apply to private personal automobile insurance written on risks in this state by any insurer who is authorized to do business in this state.

Section 3. (a) Notwithstanding the provisions of Sections 27-13-30 and 27-13-68, Code of Alabama 1975, a filing per individual line of insurance made by an insurer under this section that provides for an overall statewide rate increase or decrease of no more than 15 percent in the aggregate for all coverages that are subject to the filing may take effect the date it is filed. The 15 percent limitation may not apply on an individual insured basis. An insured may not be subjected to a rate of increase of more than 25 percent at renewal, but this twenty-five percent cap does not apply to the portion of the premium change that is a direct result of factors such as symbol updates, policy changes, a driver aging from one class to another, or other changes in risk classification or rating factors not altered in the filing. No more than one rate filing per individual line of insurance may be made by an insurer pursuant to the expedited process provided in this subsection during any 12-month period unless a rate filing, when combined with any other rate filing or filings within the same individual line of insurance made by an insurer the preceding 12 months, does not result in an overall statewide increase or decrease of more than 15 percent in the aggregate for all coverages that are subject to the filing. Each territorial rate increase shall be supported by actuarial indications at the territorial level. A rate increase for liability, comprehensive, or collision coverage shall be supported separately by actuarial indications.

(b) Rate filings falling outside of the limitation provided for in subsection (a) shall be subject to Sections 27-13-30 and 27-13-68, Code of Alabama 1975, unless the filings are otherwise exempt from those provisions pursuant to another section of the insurance code of this state.

(c) A filing submitted pursuant to subsection (a) shall be considered to comply with state law. However, if the Commissioner of the Department of Insurance determines that the filing is unreasonably high, inadequate, or unfairly discriminatory, he or she shall issue a written order specifying in detail the provisions of the insurance code the insurer has violated, state the reasons the filing is unreasonably high, inadequate, or unfairly discriminatory, and state a reasonable future date on which the filing is to be considered no longer effective. An order by the commissioner pursuant to this subsection that is issued more than 30 days from the date on which the commissioner received the rate filing is prospective only and does not affect any contract issued or made before the effective date of the order. The premiums of an insured shall be adjusted on the first day of the next month after the commissioner issues an order regarding a rate filing.

(d) No rate increase within the limitation specified in subsection (a) may be implemented with regard to an existing policy of an individual, unless the increase is applied at the time of a renewal or conditional renewal of an existing policy and the insurer, at least 30 days in advance of the end of the insured's policy period, mails or delivers to the named insured, at the address shown in the policy, a written notice that discloses its intention to change the rate. A notice of renewal, conditional renewal, or billing statement that discloses the renewal premium applicable to the policy shall be deemed to be in compliance with this subsection. Payment of premium is considered consent of the insured pursuant to applicable sections of the insurance code requiring written consent of the insured.

Section 4. This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law.

Insurance

Insurance Department

Rate

Commissioner of Insurance

Personal Lines Insurance