Personal Auto InsuranceQuestion 6 of 158
Proposition 103 makes California a 'prior approval' state for auto insurance rates. What does this mean?
a.Insurers may use any rate as long as they file it within 30 days
b.Insurers may implement a rate and the CDI may disapprove it later
c.Rate changes must be filed with and approved by the CDI before they take effect
d.Rates are set entirely by the Insurance Commissioner with no insurer input
Explanation
Insurance Code §1861.05, the rate provision of Proposition 103, makes California a prior approval state. Any rate change must be filed with the California Department of Insurance and receive approval BEFORE it can be implemented. This is distinct from 'file and use' or 'use and file' states.
Law Reference: Cal. Ins. Code §1861.05 (Prop 103)Practice all 158 questions free — no signup required.
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