07 LC 37
0513
House
Bill 867
By:
Representative Hembree of the
67th
A
BILL TO BE ENTITLED
AN ACT
AN ACT
To
amend Chapter 9 of Title 33 of the Official Code of Georgia Annotated, relating
to regulation of rates, underwriting rules, and related organizations, so as to
provide that rates with regard to private passenger motor vehicle insurance may
go into effect without the necessity of approval by the Commissioner of
Insurance; to provide for procedures for filings; to provide for notice and
hearing in the case of filings that are not in compliance; to provide for other
filings; to provide for the contents of filings; to provide for procedures for
aggrieved persons; to provide for related matters; to repeal conflicting laws;
and for other purposes.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION
1.
Chapter
9 of Title 33 of the Official Code of Georgia Annotated, relating to regulation
of rates, underwriting rules, and related organizations, is amended by revising
subsections (b) through (g) of Code Section 33-9-21, relating to maintenance
and filing of rates, rating plans, rating systems, or underwriting rules, to
read as follows:
"(b)(1)
It is the legislative intent of this subsection to permit and encourage
competition among companies on a sound financial basis and to establish a
mechanism to ensure the provision of adequate insurance at reasonable rates to
the citizens of Georgia.
(2)
Any domestic, foreign, or alien insurer that is authorized to write insurance in
this state must file with the Commissioner any rate, rating plan, rating system,
or underwriting rule for all personal private passenger motor vehicle insurance.
No such
rate, rating plan, rating system, or underwriting rule will become effective,
nor may any premium be collected by any insurer thereunder, unless the filing
has been received by the Commissioner in his or her office and such filing has
been approved by the Commissioner or a period of 45 days has elapsed from the
date such filing was received by the Commissioner during which time such filing
has not been disapproved by the Commissioner. The Commissioner shall be
authorized to extend such 45 day period by no more than 55 days at his or her
discretion. If a filing is disapproved, notice of such disapproval order shall
be given within 100 days of receipt of filing by the Commissioner, specifying in
what respects such filing fails to meet the requirements of this chapter. The
filer shall be given a hearing upon written request made within 30 days after
the issuance of the disapproval order, and such hearing shall commence within 30
days after such request unless postponed by mutual consent. Such hearing, once
commenced, may be postponed or recessed by the Commissioner only for weekends,
holidays, or after normal working hours or at any time by mutual consent of all
parties to the hearing. The Commissioner may also, at his or her discretion,
recess any hearing for not more than two recess periods of up to 15 consecutive
days each. In connection with any hearing or judicial review with respect to the
approval or disapproval of such rates, the burden of persuasion shall fall upon
the affected insurer or insurers to establish that the challenged rates are
adequate, not excessive, and not unfairly discriminatory. After such a hearing,
the Commissioner must affirm, modify, or reverse his or her previous action
within the time period provided in subsection (a) of Code Section 33-2-23
relative to orders of the Commissioner. The requirement of approval or
disapproval of a rate filing by the Commissioner under this subsection shall not
prohibit actions by the Commissioner regarding compliance of such rate filing
with the requirements of Code Section 33-9-4 brought after such approval or
disapproval.
(3)
For purposes of this subsection, a competitive market is presumed to exist
unless the Commissioner, after notice and hearing, determines that a reasonable
degree of competition does not exist within a market and issues a ruling to that
effect. The ruling shall expire three years after issue unless rescinded
earlier by the Commissioner or unless the Commissioner renews the ruling after a
hearing and a finding as to the continued lack of a reasonable degree of
competition. Any ruling that finds that competition does not exist shall
identify the factors that cause the market not to be competitive and may also
include a plan for enhancing competition. The Commissioner shall monitor the
degree and continued existence of competition in Georgia on an ongoing basis and
shall provide a measurement of competition in the market using the
Herfindahl/Hirschmann Index or an equivalent economic measure to the General
Assembly as part of the supplemental report provided in Code Section 33-2-8.1.
An interested party may petition the Commissioner to initiate a hearing to
examine whether a particular market is competitive.
(4)
Any policy governed by this subsection shall become effective without prior
approval of the Commissioner and may take effect on the date specified in the
filing but not earlier than the date such policy is received by the department.
No rate level change specified in this subsection shall be implemented until the
onset of a new policy period.
(5)
A filing submitted pursuant to paragraph (2) of this subsection shall include an
exhibit showing the calculation of the overall rate level change and an exhibit
showing the insurer´s expense provisions. An insurer submitting a loss
cost adjustment filing shall include supporting information showing how the loss
cost adjustment is calculated. The Commissioner may request additional
supporting information if the Commissioner does not have enough information upon
which to determine if the filing meets the requirements of this
chapter.
(6)
A filing submitted pursuant to paragraph (2) of this subsection shall be
considered to comply with state law. However, if, within 30 days following
receipt of the filing, the Commissioner determines that it does not meet the
requirements of this title, the Commissioner shall, after a hearing held upon
not less than ten days´ written notice, given to each insurer that made the
filing and specifying the matters to be considered at the hearing, issue an
order specifying in detail the provisions of this title that the insurer has
violated and the reasons the filing is not in compliance. The order shall state
a reasonable future date on which the filing is to be considered no longer
effective. An order by the Commissioner pursuant to this paragraph shall be
prospective and shall not affect any contract issued or made before the
effective date of the order. In connection with such hearing, the burden of
persuasion shall fall upon the Commissioner.
(7)
Any person aggrieved by any rate charged, rating plan, rating system, or
underwriting rule followed or adopted by an insurer or rating organization may
request the insurer or rating organization to review the manner in which the
rate, plan, system, or rule has been applied with respect to insurance afforded
such person. The request shall be in writing and may be made by his or her
authorized representative. If the request is not granted within 30 days after
it is made, the requestor may treat it as rejected.
(8)
Any person aggrieved by the action of an insurer or rating organization in
refusing the review requested or in failing or refusing to grant all or part of
the relief requested may file a written complaint and request for hearing with
the Commissioner, specifying the grounds relied upon. If the Commissioner has
information concerning a similar complaint, he or she may deny the hearing. If
the Commissioner believes that probable cause for the complaint does not exist
or that the complaint is not made in good faith, he or she shall deny the
hearing. Alternatively, and if he or she finds that the complaint charges a
violation of this subsection and that the complainant would be aggrieved if the
violation is proven, the Commissioner shall, after a hearing held upon not less
than ten days´ written notice given to the insurer against whom the
complaint is made and specifying the matters to be considered at the hearing,
issue an order specifying in detail the provision of this title that the insurer
has violated and reasons the rate or underwriting rule is not in
compliance.
(9)
Every advisory organization and every insurer that makes its own rates shall,
within time frames promulgated by the Commissioner or, in the absence of time
frames, within a reasonable time after receiving written request, furnish to an
insured affected by a rate made by it, or to the authorized representative of
the insured, all pertinent information as to the rate.
(10)
Nothing in this subsection shall be construed to repeal or modify Chapter 6 of
this title, relating to unfair trade practices.
(11)
Nothing in this subsection shall be construed to repeal or modify Code
Section 33-9-4, relating to standards applicable to making and use of
rates.
(12)
Rates shall not be excessive or be unfairly discriminatory.
(13)
For purposes of this subsection, an insurer using a rate for which the insurer
has failed to file the rate, supplementary rate information, or supporting
information, as required by this subsection, shall have committed a separate
violation for each day the failure continues.
(14)
If the Commissioner determines according to the standards set forth in this
subsection that there is not a competitive market in Georgia, any domestic,
foreign, or alien insurer that is authorized to write insurance in this state
must file with the Commissioner any rate, rating plan, rating system, or
underwriting rule for all personal private passenger motor vehicle insurance.
No such rate, rating plan, rating system, or underwriting rule will become
effective, nor may any premium be collected by any insurer thereunder, unless
the filing has been received by the Commissioner in his or her office and such
filing has been approved by the Commissioner or a period of 45 days has elapsed
from the date such filing was received by the Commissioner during which time
such filing has not been disapproved by the Commissioner. The Commissioner
shall be authorized to extend such 45 day period by no more than 55 days at his
or her discretion. If a filing is disapproved, notice of such disapproval order
shall be given within 100 days of receipt of filing by the Commissioner,
specifying in what respects such filing fails to meet the requirements of this
chapter. The filer shall be given a hearing upon written request made within 30
days after the issuance of the disapproval order, and such hearing shall
commence within 30 days after such request unless postponed by mutual consent.
Such hearing, once commenced, may be postponed or recessed by the Commissioner
only for weekends, holidays, or after normal working hours or at any time by
mutual consent of all parties to the hearing. The Commissioner may also, at his
or her discretion, recess any hearing for not more than two recess periods of up
to 15 consecutive days each. In connection with any hearing or judicial review
with respect to the approval or disapproval of such rates, the burden of
persuasion shall fall upon the affected insurer or insurers to establish that
the challenged rates are adequate, not excessive, and not unfairly
discriminatory. After such a hearing, the Commissioner must affirm, modify, or
reverse his or her previous action within the time period provided in subsection
(a) of Code Section 33-2-23 relative to orders of the Commissioner. The
requirement of approval or disapproval of a rate filing by the Commissioner
under this subsection shall not prohibit actions by the Commissioner regarding
compliance of such rate filing with the requirements of Code Section 33-9-4
brought after such approval or disapproval.
(c)
When a rate filing of an insurer required under subsection (b) of this Code
section is not accompanied by the information upon which the insurer supports
the filing and the Commissioner does not have sufficient information to
determine whether the filing meets the requirements of this chapter, then the
Commissioner must request in writing, within 20 days of the date he or she
receives the filing, the specifics of such additional information as he or she
requires and the insurer shall be required to furnish such information and in
such event the 45 day period provided for in subsection (b) of this Code section
shall commence as of the date such information is furnished.
(d)(c)
Any domestic, foreign, or alien insurer that is authorized to write insurance in
this state must file with the Commissioner any rate, rating plan, rating system,
or underwriting rule at least 45 days prior to any indicated effective date for
all insurance other than personal private passenger motor vehicle insurance. No
rate, rating plan, rating system, or underwriting rule required to be filed
under this subsection will become effective, nor may any premium be collected by
any insurer thereunder, unless the filing has been received by the Commissioner
in his or
her office not less than 45 days prior to
its effective date.
(e)(d)
When a rate filing of an insurer required under subsection
(d)(c)
of this Code section results in any overall rate increase of 10 percent or more
within any 12 month period, the Commissioner shall order an examination of that
insurer to determine the accuracy of the claim reserves, the applicability of
the claim reserve practices for the loss data used in support of such filing,
and any other component of the rate filing; provided, however, that in the event
the overall increase is less than 25 percent within any 12 month period and the
Commissioner affirmatively determines that he or she has sufficient information
to evaluate such rate increase and that the cost thereof would not be justified,
he or she may waive all or part of such examination. In all other rate filings
required under subsection
(d)(c)
of this Code section, the Commissioner may order an examination of that insurer
as provided in this subsection. Such examination shall be conducted in
accordance with the provisions of Chapter 2 of this title. Upon notification by
the Commissioner of his or her intent to conduct such examination, the insurer
shall be prohibited from placing the rates so filed in effect until such
examination has been reviewed and certified by the Commissioner as being
complete. Such examination, if conducted by the Commissioner, shall be reviewed
and certified within 90 days of the date such rate, rating plan, rating system,
or underwriting rule is filed; provided, however, if the Commissioner makes an
affirmative finding that the examination may not be completed within the 90 day
period, he or she may extend such time for one additional 60 day period. Any
examination required under this Code section shall be conducted in accordance
with Chapter 2 of this title.
(f)(e)
Notwithstanding the provisions of subsection
(d)(c)
of this Code section, in the event the filing of any rate, rating plan, rating
system, or underwriting rule under
subsection (d)(c)
of this Code section is not necessary, in the judgment of the Commissioner, to
accomplish the purposes of this chapter as set forth in Code
Section 33-9-1, then the Commissioner may exempt all domestic, foreign, and
alien insurers from being required to file such rate, rating plan, rating
system, or underwriting rule.
(g)(f)
Filings required pursuant to this Code section shall be accompanied by a fee or
fees as provided in Code Section 33-8-1."
SECTION
2.
All
laws and parts of laws in conflict with this Act are repealed.