Under Proposition 103, what must an insurer do before changing rates for auto, homeowners, or other covered property/casualty lines in California?
a.File a use-and-file notice within 60 days after the new rate takes effect
b.Notify policyholders 30 days before charging the new rate
c.Publish the proposed rate in a local newspaper for 90 days
d.File the proposed rate with the Department of Insurance and obtain prior approval
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)This topic, taught in full in the California Property & Casualty Broker-Agent guide. California Property & Casualty Broker-Agent Study Guide — 2026 Edition — PDF + EPUB, $24.99 · 14-day refund →
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