California-Specific RulesQuestion 63 of 215
Under Proposition 103, what must an insurer do before changing rates for auto, homeowners, or other covered property/casualty lines in California?
a.File the proposed rate with the Department of Insurance and obtain prior approval
b.Notify policyholders 30 days before charging the new rate
c.File a use-and-file notice within 60 days after the new rate takes effect
d.Publish the proposed rate in a local newspaper for 90 days
Explanation
Proposition 103, codified at Cal. Ins. Code §1861.05, requires prior approval of rate changes for personal auto, homeowners, and many other P&C lines. The insurer files the proposed rate with the Department of Insurance and may not implement it until the Commissioner approves. California is a true prior-approval state, not file-and-use or use-and-file.
Law Reference: Cal. Ins. Code §1861.05 (Proposition 103)Practice all 215 questions free — no signup required.
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