California-Specific RulesQuestion 61 of 474
Proposition 103 reshaped California rate regulation. Which statement about the resulting framework is correct?
a.Proposition 103 applies only to commercial lines, not to personal auto or homeowners
b.Personal-lines rates are set entirely by the Commissioner without any insurer input
c.Insurers may file new personal auto rates and use them immediately, subject to later disapproval
d.Insurers must file new personal-lines rates and obtain Commissioner approval before charging them
Explanation
Proposition 103, codified principally at §1861.05, established prior approval: an insurer must file a new rate and obtain the Commissioner's approval before using it on personal auto, homeowners, and most personal-lines policies. It is not a use-and-file system, the Commissioner does not unilaterally set rates, and the measure applies broadly to personal lines.
Law Reference: Cal. Ins. Code §1861.05; §1861.02This topic, taught in full in the Personal Lines Insurance Producer guide. Personal Lines Insurance Producer — Complete Study Guide (2026) — PDF + EPUB, $19.99 · 14-day refund →
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