California Insurance Code & EthicsQuestion 46 of 215
Under Proposition 103, before a property and casualty insurer may use a new rate in California, the rate must be:
a.Approved by the FAIR Plan board
b.Approved by the Department of Managed Health Care
c.Filed and used immediately without prior approval
d.Filed with and approved by the Insurance Commissioner (prior approval)
Explanation
Proposition 103 (codified at §1861.05) introduced a prior-approval system: P&C insurers must file rates with the Commissioner and obtain approval before using them. File-and-use is not allowed for most personal lines after Prop 103. DMHC and the FAIR Plan do not approve rates.
Law Reference: Cal. Const. art. XIII, §15; Cal. Ins. Code §1861.05 (Prop. 103)Practice all 215 questions free — no signup required.
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