IIABCal to Weigh In on CDI Authority

IBA West will attend and testify at a November 10 workshop California Insurance Commissioner Dave Jones has scheduled to consider expanding the scope of his powers under existing prior approval statutes in property/casualty insurance lines.  CDI is considering amending the regulations to increase the Commissioner’s authority over insurers’ class plans and rate applications.

 Specifically, CDI has invited comment on six areas for potential changes to the prior approval regulations, including: 1) expanding definitions of “rate, “premium,” “rating factor” and “underwriting rule”; 2) expanding consumer remedies for “unlawful practices” contained in rate filings approved by CDI; 3) imposing new restrictions on personal auto rating factors; 4) requiring greater public disclosure of insurers’ “underwriting guidelines, eligibility criteria and other rating rules”; 5) expanding the Commissioner’s prior approval authority to include all “underwriting guidelines, eligibility criteria and rating rules” used by insurers; 6) expanding the Commissioner’s regulatory authority under the so-called “primary jurisdiction doctrine,” which reduces initial judicial determination of certain issues.

 IBA West General Counsel Steve Young said the Association was troubled by what appears to be a “power grab” by the Commissioner both to circumvent the Legislature in creating new powers for himself, and to increase litigation against insurers over elements of class plans that the California Department of Insurance has reviewed and approved.

 The workshop is an administrative first step that usually precedes the promulgation of actual regulations, and is designed to help administrative agencies gather information in a less formal way than under official rulemaking hearings governed by the California Administrative Procedures Act.  The hearing will be held at 10:30 a.m., Nov. 10, at the CDI offices at 45 Fremont Street, 22nd Floor Hearing Room, in San Francisco. 

Click here for a copy of the official note of the workshop.