The Second District Court of Appeal Applies the "Filed Rate Doctrine" to California Insurance Ratemaking, and Holds that the Use of Approved Insurance Rates Cannot Create Tort Liability Against...


In MacKay v. Superior Court (October 6, 2010) ___ Cal.App.4th ___ the Second District Court of Appeal threw out a class action challenging an insurer's rating practices on the ground that California law prohibits insureds from challenging rates approved by the California Department of Insurance ("DOI") through a civil action. Writing for the court, Justice Croskey concluded that the "filed rate doctrine" applies to California insurance ratemaking, despite the voters' enactment of Proposition 103, and that the exclusive remedy for challenging an insurer's approved rating practices was through a statutory administrative review process.

The class action challenged two of 21st Century Insurance Company's ("21st Century") automobile insurance rating practices as violative of the California Insurance Code and California's Unfair Competition Law, Business and Professions Code section 17200 et seq. ("UCL"). After the trial court granted class certification, 21st Century moved for summary judgment on the ground that its rating practices were approved by the DOI, and the only means of challenging those practices was through an administrative review process pursuant to Insurance Code sections 1860.1 and 1858 et seq. The plaintiff opposed the motion, arguing that Insurance Code section 1861.03, which was enacted by the California voters under Proposition 103 and which subjects the "business of insurance" to all California laws applicable to business, permitted rating practice challenges under the UCL.

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