California Adds Voluntary Review Before Insurers File Rate Applications
Insurers seeking personal and commercial lines rate changes in California can go through a voluntary review process that makes the California Department of Insurance’s initial rate analysis public before they formally file rate applications.
California Insurance Commissioner Ricardo Lara on Monday introduced the Comprehensiveness Review Regulation, which allows the CDI to publish initial rate range indications, issues identified in insurer submissions and projected premium savings from its review.
Insurers can also skip the optional step and proceed directly to the existing rate filing process under Proposition 103, the state’s bedrock property/casualty insurance law.
The Office of Administrative Law has approved the regulation. According to the CDI, the process is intended to address questions about supporting information from insurers before the formal filing. If CDI reviewers arrive at a lower rate indication, insurers can accept those figures or provide additional information to support the proposed rates.
The regulation is designed to complement the department’s Complete Rate Application Regulation, which requires insurers to provide comprehensive information before applications are publicly noticed. The department said the new process is intended to reduce delays caused by incomplete submissions.
The regulation retains the state’s intervenor process, which allows third parties to seek compensation for participating in rate proceedings.
The regulation is part of Lara’s Sustainable Insurance Strategy. That strategy also includes regulations finalized in December 2024 allowing insurers to use catastrophe models and reinsurance costs in ratemaking, tied to commitments to expand coverage in wildfire-distressed areas. The reinsurance regulation establishes an industry cost standard and limits the amount insurers can pass on to policyholders.
The changes followed insurer pullbacks and requests for substantial rate increases in California’s homeowners market.