MURIELBOWSER
MAYOR
February23,2023
TheHonorablePhilMendelson,Chairman
CounciloftheDistrictofColumbia
JohnA.WilsonBuilding
1350PennsylvaniaAvenue,NW,Suite504
Washington,DC20004
DearChairmanMendelson:
EnclosedforconsiderationandenactmentbytheCounciloftheDistrictofColumbiaarethe“Motor
VehicleandHomeownerInsurancePriorApprovalRateFilingEmergencyAmendmentActof2023,”
the“MotorVehicleandHomeownerInsurancePriorApprovalRateFilingTemporaryAmendmentAct
of2023,”andthe“MotorVehicleandHomeownerInsurancePriorApprovalRateFilingAmendment
Actof2023,”alongwithanaccompanyingemergencydeclarationresolution.‘Thepurposeofthe
legislationistochangethemotorvehicleandhomeownerinsuranceratefilingstandardfromfileand
usetopriorapproval
TheDepartmentofInsurance,Securities,andBanking(“Department”)hasnoticedatrendinmotor
vehicleandhomeownerinsurancemarketsintheDistrictwhereinsurershavebeenrequestingdouble-
digitrateincreases.Insomecases,theincreasesareinexcessof20percent.Whileinsurersareentitled
toanadequatepremiumrateinexchangefortheinsurancecoveragetheyprovide,theCommissioner
isconcernedabouttheimpactoftheserateincreasesonDistrictresidents.
Inaddition,becausetheratefilingsofmotorvehicleandhomeownerinsurersoperateunderafileand
usestandardintheDistrict,insurerscurrentlycanimplementtherateincreasesimmediatelyuponfiling
therateswiththeCommissioner.TheCommissionerisconcernedthatthelargepremiumincreases
couldcausepolicyholderstomisspaymentsduetotheirinabilitytoaffordtheincreasedrateswhileat
thesametimelackingsufficienttimetoshopformoreaffordableinsurance.Suchaninstancecould
resultinpolicieslapsingduetonon-paymentandanincreaseinuninsuredmotorists.Byenactingthe
legislationandchangingtheratefilingstandardformotorvehicleandhomeownerinsurerratefilings
fromfileandusetopriorapprovalwitha90daydeemer,theDepartmentwillhavetimetoreviewthe
filingstoensurethattherateincreasesareneitherexcessivenordiscriminatorybeforethenewrates
becomeeffective.Moreover,thelegislationwillrequiremotorvehicleandhomeownerinsurersto
providepolicyholders60daysadvancewrittennoticeforanyrateincreaseof10%ormore.
Accordingly,|urgetheCounciltotakepromptandfavorableactionontheenclosedlegislation.
Sincerely, 29
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‘airmanPhilMendelson
attherequestoftheMayor
ABILL
INTHECOUNCILOFTHEDISTRICTOFCOLUMBIA.
ToamendAnActtoprovideforregulationofcertaininsuranceratesintheDistrictof
‘Columbia,andforotherpurposes,tochangethemotorvehicleandhomeowner
insuranceratefilingstandardfromfileandusetopriorapprovalwitha90-day
deemer,torequirenoticeandopportunityforahearingbeforearatefilingis,
determinedtobeexcessiveorunfairlydiscriminatory;andtorequireinsurersto
providepolicyholders60dayadvancewrittennoticeofanyrateincreaseof10%
ormore.
BEITENACTEDBYTHECOUNCILOFTHEDISTRICTOFCOLUMBIA,
thatthisActmaybecitedasthe“MotorVehicleandHomeownerInsurancePrior
‘ApprovalRateFilingAmendmentActof2023”.
Sec.2.AnActToprovideforregulationofcertaininsuranceratesintheDistrict
ofColumbia,andforotherpurposes,approvedMay20,1948(62Stat.243;D.C.Official
Code§§31-2701etseq.),isamendedfollows:
(a)Section3(£(2)(D.C.OfficialCode§31-2703(f)(2))isamendedtoreadas
follows:
“(2)(A)Eachfinalrateorpremiumchargeproposedtobeusedbyany
motorvehicleorhomeownerinsurershallbefiledwiththeCommissionerandshallbe
adequate,notexcessive,andnotunfairlydiscriminatory.Beforeamotorvehicleor
homeownerrateorpremiumchargefilingshallbecomeeffective,theCommissionershall
havetheauthoritytodetermine,within90daysafterthefilingdate,thatarateor
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premiumchargeisexcessiveiftherateorpremiumchargeisunreasonablyhighforthe
insuranceprovidedandisnotactuariallyjustifiedbasedoncommonlyacceptedactuarial
principles.Indeterminingwhetheraratecomplieswiththestandardssetforthintheprior
sentence,dueconsiderationshallbegivenforpastandprospectivelossexperiencewithin
andoutsidetheDistrict,areasonablemarginforunderwritingprofitandcontingencies,
dividends,savings,orunabsorbedpremiumdepositsallowedorreturnedbyinsurersto
theirpolicyholdersormembersorsubscribers,pastandprospectiveexpenses,both
nationwideandintheDistrict,andinvestmentincomeearnedorrealizedbyinsurersboth
fromtheirunearnedpremiumsandfromtheirlossreservefunds.
“(B)IftheCommissionerdoesnotmakeadeterminationona
proposedrateorpremiumchargewithinthe90-dayperiod,therateorpremiumcharge
shallbedeemedapproved.IftheCommissionerdetermines,withinthe90-dayperiod,
thatamotorvehicleorhomeownerrateorpremiumchargemaybeexcessiveorunfairly
discriminatory,theCommissionershallprovidetheinsurerwithnoticeofthe
determinationandthereasonsthereforandanopportunityforahearing.Ahearingmust
berequestedbytheinsurerwithin15daysafterthenoticeisprovidedtotheinsurerby
theCommissioner.AhearingshallbeheldbytheCommissionerwithin60daysaftera
writtenrequestistimelyreceivedfromtheinsurerandtheCommissionershallissuea
finalorderwithin30daysafterthecloseofthehearingrecord.Thecostofthehearing
shallbebornebytheinsurerrequestingtherateincrease.IftheCommissionerfindsafter
ahearingthatarateorpremiumchargeisnotincompliancewiththisparagraph,the
Commissionershallorderthatitsusebediscontinuedforanypolicyissuedorrenewed
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afteradatespecifiedintheorderandtheordermayprospectivelyprovideforarate
premiumchargeadjustmentofanypolicytheninforce.
“(C)Ifafinalrateorpremiumchargetobeimplementedbyan
insurerwillincreasetheexistingrateorpremiumchargeofapolicyholderby10%or
more,theinsurershallprovidethepolicyholderwrittennoticeofthepercentageand
amountofsuchincreaseasitpertainstotheindividualpolicyholderatleast60days,and
notmorethan90days,beforetheincreasewillbeappliedtothepolicyholder’sinsurance
policy.Iftheinsurerisunabletoprovidewrittennoticeatleast60daysbeforetheendof
thecurrenttermofthepolicyholder’spolicy,thentheinsurermustwaituntiltheendof,
thesubsequenttermofthepolicyholder’policytoimplementtherateorpremium
increase.”.
(b)Section4(c)(2)(A)(ii)(D.C.OfficialCode§31-2704(c)(2)(A)(ii))isamended
toreadasfollows:
“(ii)Theorderismadeaftertheprescribedinvestigation
andhearingandwithin30daysafterthefilingofratesaffected,exceptasotherwise
permittedby§3(£)(2)oftheact.”
Sec.3.Fiscalimpactstatement.
TheCounciladoptsthefiscalimpactstatementoftheChiefFinancialOfficeras
thefiscalimpactstatementrequiredbysection4aoftheGeneralLegislativeProcedures
Actof1975,approvedOctober16,2006(120Stat.2038;D.C.OfficialCode§1-
301.472),
Sec.4.Effectivedate.
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ThisactshalltakeeffectfollowingapprovalbytheMayor(orintheeventofveto
bytheMayor,actionbytheCounciltooverridetheveto),anda30-dayperiodof
Congressionalreviewasprovidedinsection602(¢)(1)oftheDistrictofColumbiaHome
RuleAct,approvedDecember24,1973(87Stat.813;D.C.Code§1-206(c)(1)),and
publicationintheDistrictofColumbiaRegister.
GOVERNMENTOFTHEDISTRICTOFCOLUMBIA
OfficeoftheAttorneyGeneral
xe *
Ea
Ez
LegalCounselDivision
MEMORANDUM
TO: BeverlyL.Perry
SeniorAdvisor
OfficeoftheSeniorAdvisor
FROM:—MeganD.Browder
DeputyAttorneyGeneral
LegalCounselDivision
DATE:November8,2022
RE: LegalSufficiencyCertificationofDraftLegislation,the“MotorVehicleand
HomeownerInsurancePriorApprovalFilingAmendmentActof2022,”Emergency
VersionandResolution,andTransmittalLetter
(AE-22-166)
ThisistoCertifythatthisoricehasreviewedtheabove-referenceddraft
legislationandfoundittobelegallysufficient.Ifyouhaveanyquestions,pleasedonothesitateto
callmeat(202)724-5524.
Megabre
MeganD.Browder
GovernmentoftheDistrictofColumbia
OfficeoftheChiefFinancialOfficer
++
etd
riennad
GlenLee
ChiefFinancialOfficer
MEMORANDUM
TO: TheHonorablePhilMendelson
Chairman,CounciloftheDistrictofcotabia
GlenLee Lhe we
ChiefFinancialOffi
DATE: November7,2022
SUBJECT: FiscalImpactStatement-MotorVehicleandHomeownerInsurance
PriorApprovalRateFilingEmergencyAmendmentActof2022
REFERENCE: DraftBillasprovidedtotheOfficeofRevenueAnalysisonOctober27,
2022
Conclu:
Fundsaresufficientinthefiscalyear2023throughfiscalyear2026budgetandfinancialplanto
implementthebill.
Background
TheDepartmentofInsurance,SecuritiesandBanking(DISB)approvesrateadjustmentsfrom
insurerstoensuretheyareadequate,notexcessive,andnotunfairlydiscriminatory.Formotor
vehicleinsurance,DISBallowsaninsurertofiletheirnewratesandthenbeginchargingthoserates
priortoDISBapproval.
Thebillchangesthestandardandappliesittohomeownerinsurersaswell.Bothmotorvehicleand
homeownerinsurancecompanieswillneedtofilenewratesandwaitupto60daysforDISBto
approveordenytherates.IfDISBdoesnotdecideontherateswithinthattime,thentheratesare
deemedtobeapproved.AninsurercanappealaDISBdecisionthatratesareexcessiveor
discriminatorywithin60daysofthedecision.
1AnActtoprovideforregulationofcertaininsuranceratesintheDistrictofColumbia,andforother
purposes,approvedMay20,1968(62Stat.242;D.C.OfficialCode§31-2703((2)).
1350PennsylvaniaAvenue,NW,Suite203,Washington,DC20004(202)727-2476
www.cfo.degov ‘TheHonorablePhilMendelson
FIS:“MotorVehicleandHomeownerInsurancePriorApprovalRateFilingEmergencyAmendmentActof
2022,"DraftBillasprovidedtotheOfficeofRevenueAnalysisonOctober27,2022
FinancialPlanImpact
Fundsaresufficientinthefiscalyear2023throughfiscalyear2026budgetandfinancialplanto
implementthebill.DISBcurrentlyholdshearingsforadverserulingsandcanabsorbanycosts
associatedwithholdingthesehearingspriortoauthorizinganinsurertoimposenewrates.
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