§4689. Approval or disapproval of rates

Link to law: http://legislature.vermont.gov/statutes/section/08/128/04689
Published: 2015

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The Vermont Statutes Online



Title

08

:
Banking and Insurance






Chapter

128

:
PROPERTY AND CASUALTY INSURANCE RATE REGULATION






Subchapter

001
:
INSURANCE RATES AND STATISTICS










 

§

4689. Approval or disapproval of rates

(a) Timing of

approval or disapproval.

(1) A rate may

be disapproved at any time subsequent to the effective date.

(2) A rate

subject to prefiling may also be disapproved before the effective date.

(3) A rate for a

residual market in which insurers are permitted or mandated by law or by order

of the Commissioner to participate shall not become effective until approved by

the Commissioner, as provided in section 4688 of this title.

(b) Bases of

disapproval.

(1) The Commissioner

shall disapprove a rate for use in a competitive market if the Commissioner

finds that the rate is inadequate, or unfairly discriminatory.

(2) The

Commissioner shall disapprove a rate for use in a noncompetitive or residual

market if the Commissioner finds that the rate is excessive, inadequate, or

unfairly discriminatory.

(c) Disapproval

procedure; order; interim rates.

(1) Disapproval

procedure.

(A) If the

Commissioner determines, in accordance with section 4684 of this title, that a

reasonable degree of competition does not exist in a market, the Commissioner

shall commence a hearing to determine whether or not existing rates are

excessive within 30 days of an order finding a market noncompetitive. However,

the Commissioner may waive this requirement to hold a hearing if the

Commissioner finds such rate filings do not violate the rate standards of this

chapter. The Commissioner shall decide whether rates are excessive within 15

days after the conclusion of the hearing. Insurers shall have the burden of

proving rates are not excessive in a noncompetitive market.

(B) If the

Commissioner believes that rates in a competitive market violate the inadequacy

standard in section 4685 of this title or any other requirement of this

chapter, the Commissioner shall require insurers in that market to file

additional supporting information for rates. If after reviewing such additional

supporting rate information the Commissioner continues to believe that the

rates violate these requirements, the Commissioner shall call a hearing before

entering any order.

(C) The

Commissioner may disapprove, without a hearing, prefiled rates. However, the

insurer or other filer whose rates have been disapproved shall be given a

hearing upon written request made within 30 days after the receipt of the

disapproval. The Commissioner shall notice in every order of disapproval that a

hearing will be granted within 30 days after receipt of a request from an

affected insurer.

(2) Order. If

the Commissioner disapproves a rate, the Commissioner shall issue an order

specifying in what respect it fails to meet the requirements of this chapter.

For rates in effect at the time of disapproval, the Commissioner shall state

when the further use of such rate in contracts of insurance made thereafter

shall be prohibited.

(3) Interim

rates. In the event existing rates of an insurer are found excessive the

Commissioner shall specify an interim rate at the time he or she issues an

order disapproving rates. The interim rate may be modified by the Commissioner

upon his or her own motion or upon motion of an insurer. The interim rate or

any modification thereof shall take effect prospectively in contracts of

insurance written or renewed 15 days after the Commissioner's decision setting

interim rates.

(4) Distribution

of overcharges. When the rates are finally determined, the Commissioner shall

order any overcharge in the interim rates to be distributed appropriately,

except that refunds to policyholders that are determined to be de minimis by

the Commissioner shall be remitted to the State of Vermont General Fund. (Added

1983, No. 238 (Adj. Sess.), § 1;1987, No. 185 (Adj. Sess.), § 3, eff. May 5,

1988.)
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