The Three Rate Regulatory Systems: Open Competition; File and Use; and, Prior Approval.

Trend One: Prior Approval of Property Casualty Rates:

California Proposition 103

Why does it matter? The Consumer Federation of America calls Proposition 103’s prior approval rate regulatory system the “finest in the nation at protecting insureds” and continues efforts to replicate it elsewhere.....

Trend Two: Prior Approval of Health Care Rates:

Patient Protection and Affordable Care Act

Did not include general Federal rate control authority - Left that task to state regulators; Requires insurers that propose “unreasonable” rate increases to file a disclosure form justifying the rate hike.....

Two issues:

- What is an “unreasonable” rate hike

- How do states regulate rates