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,IurgetheCounciltotakepromptandfavorableactionontheenclosedlegislation.
Sincerely,
far ser
Socamridsuaone
i
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ChairmanPhilMendelson
attherequestoftheMayor
APROPOSEDRESOLUTION
INTHECOUNCILOFTHEDISTRICTOFCOLUMBIA.
Todeclaretheexistenceofanemergencywithrespecttotheneedtoamend,onanemergency
basis,AnActtoprovideforregulationofcertaininsuranceratesintheDistrictof
Columbia,andforotherpurposes,tochangethemotorvehicleandhomeownerinsurance
ratefilingstandardfromfileandusetopriorapprovalwitha90-daydeemer,torequire
noticeandopportunityforahearingbeforearatefilingisdeterminedtobeexcessiveor
unfairlydiscriminatory,andtorequireinsurerstoprovidepolicyholders60dayadvance
writtennoticeofanyrateincreaseof10%ormore.
RESOLVED BYTHECOUNCILOFTHEDISTRICTOFCOLUMBIA, Thatthis
resolutionmaybecitedasthe“MotorVehicleandHomeownerInsurancePriorApprovalRate
FilingAmendmentEmergencyDeclarationResolutionof2023”
Sec.2.(a)TheDepartmentofInsurance,Securities,andBanking(“Department”)has
noticedarecenttrendinmotorvehicleandhomeownerinsurancemarketsintheDistrictwhere
insurershavebeenrequestingdouble-digitrateincreases.Insomecases,theincreasesarein
excessof20%.
(b)Whileinsurersareentitledtoanadequatepremiumrateinexchangeforthe
insurancecoveragetheyprovide,theCommissionerisconcernedabouttheimpactoftheserate
increasesonpolicyholders.Inaddition,becausetheratefilingsofmotorvehicleandhomeowner
insurerscurrentlyoperateunderafileandusestandardintheDistrict,whichmeansthatthe
insurersmayimplementtheirrateincreasesimmediatelyuponfilingtheirrateswiththe
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Commissioner,theDepartmentisoftenunabletoreviewtheratefilingsandconsultwiththe
insurerstosubstantiatetherateincreasesbeforetherateincreasestakeeffect.
(c)Inaddition,theCommissionerisconcernedthatthelargepremiumincreases
couldcausepolicyholderstomisspaymentsduetotheirinabilitytoaffordtheincreasedrates,
whileatthesametimelackingsufficienttimetoshopformoreaffordableinsurance.Suchan
instancecouldresultinpolicieslapsingduetonon-paymentandanincreaseinuninsured
motoristsandhomeowners.
(d)Bychangingtheratefilingstandardformotorvehicleandhomeownerinsurer
ratefilingsfromfileandusetopriorapproval,theDepartmentwillhavetimetoreviewthe
filingsandensurethattherateincreasesareneitherexcessivenordiscriminatorybeforethenew
ratesbecomeeffective.Further,byrequiringinsurerstoprovide60daysadvancewrittennotice
ofanyrateincreaseof10%ormore,policyholderswillhavemoretimetoconsideralternative
insuranceoptions.
Sec.3.TheCouncildeterminesthatthecircumstancesenumeratedinsection2constitute
emergencycircumstancesmakingitnecessarythattheMotorVehicleandHomeownerInsurance
PriorApprovalRateFilingAmendmentEmergencyActof2022beadoptedafterasingle
reading.
Sec.4.Thisresolutionshalltakeeffectimmediately.
GOVERNMENT OFTHEDISTRICTOFCOLUMBIA
OfficeoftheAttorneyGeneral
xk
na
Ea
LegalCounsetDivision
ORANDUM
TO: BeverlyL.Perry
SeniorAdvisor
OfficeoftheSeniorAdvisor
FROM:MeganD.Browder
DeputyAttorneyGeneral
LegalCounselDiv
DATE:November8,2022
RE: LegalSufficiencyCertificationofDraftLegislation,the“MotorVehicleand
HomeownerInsurancePriorApprovalFilingAmendmentActof2022,”Emergency
VersionandResolution,andTransmittalLetter
(AE-22-166)
ThisistoCertifythatthisomticenasreviewedtheabove-referenceddraft
legislationandfoundittobelegallysufficient.Ifyouhaveanyquestions,pleasedonothesitateto
callmeat(202)724-5524,
Megoint
MeganD.Browder
GovernmentoftheDistrictofColumbia
OfficeoftheChiefFinancialOfficer
akk
EE
Cae
GlenLee
ChiefFinancialOfficer
MEMORANDUM
TO: TheHonorablePhilMendelson
Chairman,CounciloftheDistrictoro bia
FROM: GlenLee LHMe
ChiefFinancialOffi
DATI
November7,2022
SUBJECT: FiscalImpactStatement-MotorVehicleandHomeownerInsurance
PriorApprovalRateFilingEmergencyAmendmentActof2022
REFERENCE: DraftBillasprovidedtotheOfficeofRevenueAnalysisonOctober27,
2022
Conclusion
Fundsaresufficientinthefiscalyear2023throughfiscalyear2026budgetandfinancialplanto
implementthebill.
Background
TheDepartmentofInsurance,SecuritiesandBanking(DISB)approvesrateadjustmentsfrom
insurerstoensuretheyareadequate,notexcessive,andnotunfairlydiscriminatory.Formotor
vehicleinsurance,DISBallowsaninsurertofiletheirnewratesandthenbeginchargingthoserates
priortoDISBapproval.
‘Thebillchangesthestandardandappliesittohomeownerinsurersaswell.Bothmotorvehicleand
homeownerinsurancecompanieswillneedtofilenewratesandwaitupto60daysforDISBto
approveordenytherates.IfDISBdoesnotdecideontherateswithinthattime,thentheratesare
deemedtobeapproved.AninsurercanappealaDISBdecisionthatratesareexcessiveor
discriminatorywithin60daysofthedecision.
"AnActtoprovideforregulationofcertaininsuranceratesintheDistrictofColumbia,andforother
purposes,approvedMay20,1968(62Stat.242;D.C.OfficialCode§31-2703(f)(2)).
1350PennsylvaniaAvenue,NW,Suite203,Washington,DC20004(202)727-2476
www.cto.degov
‘TheHonorablePhilMendelson
FIS:“MotorVehicleandHomeownerInsurancePriorApprovalRateFilingEmergencyAmendmentActof
2022,”DraftBillasprovidedtotheOfficeofRevenueAnalysisonOctober27,2022
FinancialPlanImpact
Fundsaresufficientinthefiscalyear2023throughfiscalyear2026budgetandfinancialplanto
implementthebill.DISBcurrentlyholdshearingsforadverserulingsandcanabsorbanycosts
associatedwithholdingthesehearingspriortoauthorizinganinsurertoimposenewrates.
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