DC
District Of Columbia Council Bill B25-0147

District Of Columbia 2023-2024 Regular Session

District Of Columbia Council Bill B25-0147 Compare Versions

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1- ENROLLED ORIGINAL
1+ MURIELBOWSER
2+MAYOR
3+February23,2023
4+TheHonorablePhilMendelson,Chairman
5+CounciloftheDistrictofColumbia
6+JohnA.WilsonBuilding
7+1350PennsylvaniaAvenue,NW,Suite504
8+Washington,DC20004
9+DearChairmanMendelson:
10+EnclosedforconsiderationandenactmentbytheCounciloftheDistrictofColumbiaarethe“Motor
11+VehicleandHomeownerInsurancePriorApprovalRateFilingEmergencyAmendmentActof2023,”
12+the“MotorVehicleandHomeownerInsurancePriorApprovalRateFilingTemporaryAmendmentAct
13+of2023,”andthe“MotorVehicleandHomeownerInsurancePriorApprovalRateFilingAmendment
14+Actof2023,”alongwithanaccompanyingemergencydeclarationresolution.Thepurposeofthe
15+legislationistochangethemotorvehicleandhomeownerinsuranceratefilingstandardfromfileand
16+usetopriorapproval.
17+TheDepartmentofInsurance,Securities,andBanking(“Department”)hasnoticedatrendinmotor
18+vehicleandhomeownerinsurancemarketsintheDistrictwhereinsurershavebeenrequestingdouble-
19+digitrateincreases.Insomecases,theincreasesareinexcessof20percent.Whileinsurersareentitled
20+toanadequatepremiumrateinexchangefortheinsurancecoveragetheyprovide,theCommissioner
21+isconcernedabouttheimpactoftheserateincreasesonDistrictresidents.
22+Inaddition,becausetheratefilingsofmotorvehicleandhomeownerinsurersoperateunderafileand
23+usestandardintheDistrict,insurerscurrentlycanimplementtherateincreasesimmediatelyuponfiling
24+therateswiththeCommissioner.TheCommissionerisconcernedthatthelargepremiumincreases
25+couldcausepolicyholderstomisspaymentsduetotheirinabilitytoaffordtheincreasedrateswhileat
26+thesametimelackingsufficienttimetoshopformoreaffordableinsurance.Suchaninstancecould
27+resultinpolicieslapsingduetonon-paymentandanincreaseinuninsuredmotorists.Byenactingthe
28+legislationandchangingtheratefilingstandardformotorvehicleandhomeownerinsurerratefilings
29+fromfileandusetopriorapprovalwitha90daydeemer,theDepartmentwillhavetimetoreviewthe
30+filingstoensurethattherateincreasesareneitherexcessivenordiscriminatorybeforethenewrates
31+becomeeffective.Moreover,thelegislationwillrequiremotorvehicleandhomeownerinsurersto
32+providepolicyholders60daysadvancewrittennoticeforanyrateincreaseof10%ormore.
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34+Accordingly,IurgetheCounciltotakepromptandfavorableactionontheenclosedlegislation.
35+Sincerely,
36+SexisHveene
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63+attherequestoftheMayor
64+ABILL
65+INTHECOUNCILOFTHEDISTRICTOFCOLUMBIA
66+Toamend,onanemergencybasis,AnActToprovideforregulationofcertaininsurance
67+ratesintheDistrictofColumbia,andforotherpurposes,tochangethemotor
68+vehicleandhomeownerinsuranceratefilingstandardfromfileandusetoprior
69+approvalwitha90-daydeemer,toprovidenoticeandopportunityforahearing
70+beforearatefilingisdeterminedtobeexcessiveorunfairlydiscriminatory;andto
71+requireinsurerstoprovidepolicyholders60dayadvancewrittennoticeofany
72+rateincreaseof10%ormore.
73+BEITENACTEDBYTHECOUNCILOFTHEDISTRICTOFCOLUMBIA,
74+thatthisActmaybecitedasthe“MotorVehicleandHomeownerInsurancePrior
75+ApprovalRateFilingEmergencyAmendmentActof2023”.
76+Sec.2.AnActToprovideforregulationofcertaininsuranceratesintheDistrict,
77+ofColumbia,andforotherpurposes,approvedMay20,1948(62Stat.243;D.C.Official
78+Code§31-2701etseq.),isamendedfollows:
79+(a)Section3(£)(2)(D.C.OfficialCode§31-2703(1)(2))isamendedtoreadas
80+follows:
81+“(2)(A)Eachfinalrateorpremiumchargeproposedtobeusedbyany
82+motorvehicleorhomeownerinsurershallbefiledwiththeCommissionerandshallbe
83+adequate,notexcessive,andnotunfairlydiscriminatory.Beforeamotorvehicleor
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85+homeownerrateorpremiumchargefilingshallbecomeeffective,theCommissionershall
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109+havetheauthoritytodetermine,within90daysafterthefilingdate,thatarateor
110+premiumchargeisexcessiveiftherateorpremiumchargeisunreasonablyhighforthe
111+insuranceprovidedandisnotactuariallyjustifiedbasedoncommonlyacceptedactuarial
112+principles.Indeterminingwhetheraratecomplieswiththestandardssetforthintheprior
113+sentence,dueconsiderationshallbegivenforpastandprospectivelossexperiencewithin
114+andoutsidetheDistrict,areasonablemarginforunderwritingprofitandcontingencies,
115+dividends,savings,orunabsorbedpremiumdepositsallowedorreturnedbyinsurersto
116+theirpolicyholdersormembersorsubscribers,pastandprospectiveexpenses,both
117+nationwideandintheDistrict,andinvestmentincomeearnedorrealizedbyinsurersboth
118+fromtheirunearnedpremiumsandfromtheirlossreservefunds.
119+“(B)IftheCommissionerdoesnotmakeadeterminationona
120+proposedrateorpremiumchargewithinthe90-dayperiod,therateorpremiumcharge
121+shallbedeemedapproved.IftheCommissionerdetermines,withinthe90-dayperiod,
122+thatamotorvehicleorhomeownerrateorpremiumchargemaybeexcessiveorunfairly
123+discriminatory,theCommissionershallprovidetheinsurerwithnoticeofthe
124+determinationandthereasonsthereforandanopportunityforahearing.Ahearingmust
125+berequestedbytheinsurerwithin15daysafterthenoticeisprovidedtotheinsurerby
126+theCommissioner.AhearingshallbeheldbytheCommissionerwithin60daysaftera
127+writtenrequestistimelyreceivedfromtheinsurerandtheCommissionershallissuea
128+finalorderwithin30daysafterthecloseofthehearingrecord.Thecostofthehearing
129+shallbebornebytheinsurerrequestingtherateincrease.IftheCommissionerfindsafter
130+ahearingthatarateorpremiumchargeisnotincompliancewiththisparagraph,the
131+Commissionershallorderthatitsusebediscontinuedforanypolicyissuedorrenewed
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155+afteradatespecifiedintheorderandtheordermayprospectivelyprovideforarate
156+premiumchargeadjustmentofanypolicytheninforce.
157+“(C)Ifafinalrateorpremiumchargetobeimplementedbyan
158+insurerwillincreasetheexistingrateorpremiumchargeofapolicyholderby10%or
159+more,theinsurershallprovidethepolicyholderwrittennoticeofthepercentageand
160+amountofsuchincreaseasitpertainstotheindividualpolicyholderatleast60days,and
161+notmorethan90days,beforetheincreasewillbeappliedtothepolicyholder’insurance
162+policy.Iftheinsurerisunabletoprovidewrittennoticeatleast60daysbeforetheendof
163+thecurrenttermofthepolicyholder’spolicy,thentheinsurermustwaituntiltheendof
164+thesubsequenttermofthepolicyholder’spolicytoimplementtherateorpremium
165+increase.”
166+(b)Section4(c)(2)(A)(ii)(D.C.OfficialCode§31-2704(c)(2)(A)(ii))isamended
167+toreadasfollows:
168+“(ii)Theorderismadeaftertheprescribedinvestigation
169+andhearingandwithin30daysafterthefilingofratesaffected,exceptasotherwise
170+permittedbysection3(£)(2).”.
171+Sec.3.Fiscalimpactstatement.
172+TheCounciladoptsthefiscalimpactstatementoftheChiefFinancialOfficeras
173+thefiscalimpactstatementrequiredbysection4aoftheGeneralLegislativeProcedures
174+Actof1975,approvedOctober16,2006(120Stat.2038;D.C.OfficialCode§1-
175+301.47a).
176+Sec.4.Effectivedate.
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182+ThisactshalltakeeffectfollowingapprovalbytheMayor(orintheeventofa
183+vetobytheMayor,actionbytheCounciltooverridetheveto),andshallremainineffect
184+fornolongerthan90days,asprovidedforemergencyactsoftheCounciloftheDistrict
185+ofColumbiainsection412(a)oftheDistrictofColumbiaHomeRuleAct,approved
186+December24,1973(87Stat.788;D.C.OfficialCode§1-204.12(a)).
7187
8-AN ACT
188+GovernmentoftheDistrictofColumbia
189+OfficeoftheChiefFinancialOfficer
190+tk**
191+a
192+en
193+GlenLee
194+ChiefFinancialOfficer
195+MEMORANDUM
196+TO: ‘TheHonorablePhilMendelson
197+Chairman,CounciloftheDistrictofca
198+FROM: GlenLee LH fu —
199+ChiefFinancialOffi
200+DATI
9201
10-________
202+November7,2022
203+SUBJECT: FiscalImpactStatement-MotorVehicleandHomeownerInsurance
204+PriorApprovalRateFilingEmergencyAmendmentActof2022
205+REFERENCE: DraftBillasprovidedtotheOfficeofRevenueAnalysisonOctober27,
206+2022
11207
208+Conclusion
209+Fundsaresufficientinthefiscalyear2023throughfiscalyear2026budgetandfinancialplanto
210+implementthebill.
211+Background
212+TheDepartmentofInsurance,SecuritiesandBanking(DISB)approvesrateadjustmentsfrom
213+insurerstoensuretheyareadequate,notexcessive,andnotunfairlydiscriminatory.Formotor
214+vehicleinsurance,DISBallowsaninsurertofiletheirnewratesandthenbeginchargingthoserates
215+priortoDISBapproval.
216+‘Thebillchangesthestandardandappliesittohomeownerinsurersaswell.Bothmotorvehicleand
217+homeownerinsurancecompanieswillneedtofilenewratesandwaitupto60daysforDISBto
218+approveordenytherates.IfDISBdoesnotdecideontherateswithinthattime,thentheratesare
219+deemedtobeapproved.AninsurercanappealaDISBdecisionthatratesareexcessiveor
220+discriminatorywithin60daysofthedecision.
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13-IN THE COUNCIL OF THE DISTRICT OF COLUMBIA
222+AnActtoprovideforregulationofcertaininsuranceratesintheDistrictofColumbia,andforother
223+purposes,approvedMay20,1968(62Stat.242;D.C.OfficialCode§31-2703(N(2)).
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15-________________
225+1350PennsylvaniaAvenue,NW,Suite203,Washington,DC20004(202)727-2476
226+www.cto.degov
16227
17-To amend, on an emergency basis, An Act To provide for regulation of certain insurance rates in
18-the District of Columbia, and for other purposes, to change the motor vehicle and
19-homeowner insurance rate filing standard from “file-and- use” to require prior approval
20-with a 90- day review period, to provide notice and an opportunity for a hearing before a
21-rate filing is determined to be excessive or unfairly discriminatory; and , beginning on
22-September 1, 2023, to require insurers to provide policyholders 60- day advance written
23-notice of any rate increase of 10% or more.
24- BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this
25-act may be cited as the “Motor Vehicle and Homeowner Insurance Prior Approval Rate Filing
26-Emergency Amendment Act of 2023” .
228+‘TheHonorablePhilMendelson
229+FIS:“MotorVehicleandHomeownerInsurancePriorApprovalRateFilingEmergencyAmendmentActof
230+2022,”DraftBillasprovidedtotheOfficeofRevenueAnalysisonOctober27,2022
231+FinancialPlanImpact
232+Fundsaresufficientinthefiscalyear2023throughfiscalyear2026budgetandfinancialplanto
233+implementthebill.DISBcurrentlyholdshearingsforadverserulingsandcanabsorbanycosts
234+associatedwithholdingthesehearingspriortoauthorizinganinsurertoimposenewrates.
235+Page2of2
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28-Sec. 2. An Act To provide for regulation of certain insurance rates in the District of
29-Columbia, and for other purposes, approved May 20, 1948 (62 Stat. 243; D.C. Official Code §
30-31-2701 et seq.), is amended follows:
31- (a) Section 3(f)(2) (D.C. Official Code § 31- 2703(f)(2)) is amended to read as follows:
32- “(2)(A)(i) Each final rate or premium charge proposed to be used by any motor
33-vehicle or homeowner insurer shall be filed with the Commissioner and shall be adequate, not
34-excessive, and not unfairly discriminatory. Before a motor vehicle or homeowner rate or
35-premium charge filing shall become effective, the Commissioner shall have the authority to
36-determine within 90 days after the filing date that a rate or premium charge is excessive if the
37-rate or premium charge is unreasonably high for the insurance provided and is not actuarially
38-justified based on commonly accepted actuarial principles.
39- “(ii) In determining whether a rate compl ies with the standards set forth in
40-sub-subparagraph (i) of this subparagraph, due consideration shall be given to past and
41-prospective loss experience within and outside the District, a reasonable margin for underwriting
42-profit and contingencies, dividends, savings, or unabsorbed premium deposits allowed or
43-returned by insurers to their policyholders or members or subscribers, past and prospective
44-expenses, both nationwide and in the District, and investment income earned or realized by
45-insurers both from their unearned premiums and from their loss reserve funds. ENROLLED ORIGINAL
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52-“(B)(i) If the Commissioner does not make a determination on a proposed
53-rate or premium charge within the 90- day review period, the rate or premium charge shall be
54-deemed approved.
55- “(ii) If the Commissioner determines, within the 9 0-day review
56-period, that a motor vehicle or homeowner rate or premium charge may be excessive or unfairly
57-discriminatory, the Commissioner shall provide the insurer with notice of the determination, the
58-reasons for the de termination, and an opportunity for a hearing.
59- “(iii) An insurer must request a hearing within 15 days after the
60-notice is provided to the insurer by the Commissioner.
61- “(iv)(I) The Commissioner shall hold a hearing within 60 days
62-after a written request is timely received from the insurer , and the Commissioner shall issue a
63-final order within 30 days after the close of the hearing record.
64- “(II) The cost of the hearing shall be borne by the insurer
65-requesting the rate increase.
66- “(v) If the Commissioner finds after a hearing that a rate or
67-premium charge is not in compliance with this paragraph , the Commissioner shall order that its
68-use be discontinued for any policy issued or renewed after a date specified in the order and the
69-order may prospectively provide for a rate premium charge adjustment of any policy then in
70-force.
71-“(C)(i) Beginning on September 1, 2023, if a final rate or premium charge
72-to be implemented by an insurer will increase the existing rate or premium charge of a
73-policyholder by 10% or more , the insurer shall provide the policyholder written notice of the
74-percentage and amount of the increase as it pertains to the individual policyholder at least 60
75-days, and not more than 90 days, before the increase will be applied to the policyholder’s
76-insurance policy.
77- “(ii) If the insurer is unable to provide written notice at least 60
78-days before the end of the current term of the policyholder’s policy, then the insurer must wait
79-until the end of the subsequent term of the policyholder’s policy to implement the rate or
80-premium increase.”.
81- (b) Section 4(c)(2)(A)(ii) (D.C. Official Code § 31 -2704(c)(2)(A)(ii)) is amended to read
82-as follows:
83-“(ii) The order is made after the prescribed investigation and
84-hearing and within 30 days after the filing of rates affected, except as otherwise permitted by
85-section 3(f)(2).” .
86-
87- Sec. 3. Fiscal impact statement.
88-The Council adopts the fiscal impact statement of the Chief Financial Officer as the fiscal
89-impact statement required by section 4a of the General Legislative Procedures Act of 1975,
90-approved October 16, 2006 (120 Stat. 2038; D.C. Official Code § 1- 301.47a).
91- ENROLLED ORIGINAL
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98-Sec. 4. Effective date.
99- This act shall take effect following approval by the Mayor (or in the event of a veto by
100-the Mayor, action by the Council to override the veto), and shall remain in effect for no longer
101-than 90 days, as provided for emergency acts of the Council of the District of Columbia in
102-section 412(a) of the District of Columbia Home Rule Act, approved December 24, 1973 (87
103-Stat. 788; D.C. Official Code § 1- 204.12(a)).
104-
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107-______________________________
108-Chairman
109-Council of the District of Columbia
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115-_________________________________
116-Mayor
117-District of Columbia
118-
237+GOVERNMENTOFTHEDISTRICTOFCOLUMBIA.
238+OfficeoftheAttorneyGeneral
239+ww *
240+Era
241+[siennse)
242+LegalCounselDivision
243+MEMORANDUM
244+TO: BeverlyL.Perry
245+SeniorAdvisor
246+OfficeoftheSeniorAdvisor
247+FROM:MeganD.Browder
248+DeputyAttorneyGeneral
249+LegalCounselDivision
250+DATE: November8,2022
251+RE: LegalSufficiencyCertificationofDraftLegislation,the“MotorVehicleand
252+HomeownerInsurancePriorApprovalFilingAmendmentActof2022,”Emergency
253+VersionandResolution,andTransmittalLetter
254+(AE-22-166)
255+ThisistoCertifythatthisonticenasreviewedtheabove-referenceddraft
256+legislationandfoundittobelegallysufficient.Ifyouhaveanyquestions,pleasedonothesitateto
257+callmeat(202)724-5524.
258+Megoinp
259+MeganD.Browder