Iowa Code 515F.25 – Disapproval of a rate filing in a competitive market
Current as of: 2023 | Check for updates
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1. If the commissioner believes that an insurer‘s rate filing in a competitive market violates the requirements of sections 515F.4 and 515F.5, the commissioner may require the insurer to file supporting information. If after reviewing the supporting information the commissioner continues to believe that the filing violates sections 515F.4 and 515F.5, the commissioner shall notify the insurer of the insurer’s right to petition for a hearing on any subsequent order relating to the filing.
Terms Used In Iowa Code 515F.25
- Account: means the same as defined in section 554. See Iowa Code 554E.1
- Commissioner: means the commissioner of insurance. See Iowa Code 515F.2
- Escrow: Money given to a third party to be held for payment until certain conditions are met.
- Insurer: includes all companies or associations licensed to transact insurance business in this state under chapters 515, 518, and 518A, reciprocal insurers issued a certificate of authority pursuant to chapter 520, and companies or associations admitted or seeking to be admitted to do business in this state under any of those chapters, notwithstanding any provision of the Code to the contrary. See Iowa Code 515F.32
- Rate: means the cost of insurance per exposure unit whether expressed as a single number or as a prospective loss cost with an adjustment to account for the treatment of expenses, profit, and individual insurer variation in loss experience, prior to any application of individual risk variations based on loss or expense considerations, and does not include minimum premium. See Iowa Code 515F.2
- Supporting information: means the experience and judgment of the filer and the experience or data of other insurers or advisory organizations relied upon by the filer, the interpretation of any other data relied upon by the filer, descriptions of methods used in making the rates, and any other information required by the commissioner to be filed. See Iowa Code 515F.2
2. The commissioner may disapprove prefiled rates that have not become effective. However, the commissioner shall notify the insurer whose rates have been disapproved of the insurer’s right to petition for a hearing on the disapproval within thirty days after the disapproval.
3. If the commissioner disapproves a filing in a competitive market, the commissioner shall issue an order specifying the reasons the filing fails to meet the requirements of sections 515F.4 and 515F.5. For rates in effect at the time of disapproval, the commissioner shall inform the insurer within a reasonable period of time the date when further use of the rates for policies or contracts of insurance is prohibited. The order shall be issued within thirty days of disapproval, or within thirty days of a hearing on the disapproval if a hearing is held. The order may include a provision for premium adjustment for the period after the effective date of the order for policies or contracts in effect on the date of the order.
4. Whenever an insurer has filed no legally effective rates as a result of the commissioner’s disapproval of a filing, the commissioner shall on request of the insurer work with the insurer to develop interim rates for the insurer that are sufficient to protect the interest of all parties and the commissioner may order that a specified portion of the premium be placed in an escrow account approved by the commissioner. When new rates become legally effective, the commissioner shall order the escrowed funds or any overcharge in the interim rates to be distributed appropriately. The commissioner may waive distribution if the commissioner determines that the amount involved would not warrant such action.