Omega Insurance Company submits a revised personal auto policy form and corresponding rate schedule to the State Department of Insurance. The state enforces a prior approval rating law that includes a standard 30-day deemer provision. If 30 days have elapsed since the filing date and Omega has received no official response, request for additional information, or extension notice from the Commissioner, what action can the insurer legally take?
- The insurer may begin using the revised rates and forms, as they are considered approved by default upon the expiration of the waiting period.Cevap
- BThe insurer must continue using its existing rates until the Commissioner issues a formal executive order authorizing the new schedule.
- CThe insurer is prohibited from using the rates and must file an appeal, as the timeline expiration constitutes an automatic rejection of the filing.
- DThe insurer must submit a secondary notification to the Department of Insurance and restart a new 30-day waiting period.
Cevap
The insurer may begin using the revised rates and forms, as they are considered approved by default upon the expiration of the waiting period.
Under a prior approval system with a deemer provision, an insurer's filed rates and forms are 'deemed' approved if the Department of Insurance fails to approve, deny, or formally request an extension within the statutory waiting period (in this case, 30 days). This mechanism ensures that insurers are not penalized by regulatory backlogs.
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Prior Approval Rating Laws and Deemer Provisions
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