DC
District Of Columbia Council Bill PR25-0121

District Of Columbia 2023-2024 Regular Session

District Of Columbia Council Bill PR25-0121 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.
33+‘Accordingly,IurgetheCounciltotakepromptandfavorableactionontheenclosedlegislation.
34+Sincerely,
35+far ser
36+Socamridsuaone
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62+ChairmanPhilMendelson
63+attherequestoftheMayor
64+APROPOSEDRESOLUTION
65+INTHECOUNCILOFTHEDISTRICTOFCOLUMBIA.
66+Todeclaretheexistenceofanemergencywithrespecttotheneedtoamend,onanemergency
67+basis,AnActtoprovideforregulationofcertaininsuranceratesintheDistrictof
68+Columbia,andforotherpurposes,tochangethemotorvehicleandhomeownerinsurance
69+ratefilingstandardfromfileandusetopriorapprovalwitha90-daydeemer,torequire
70+noticeandopportunityforahearingbeforearatefilingisdeterminedtobeexcessiveor
71+unfairlydiscriminatory,andtorequireinsurerstoprovidepolicyholders60dayadvance
72+writtennoticeofanyrateincreaseof10%ormore.
373
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6-1
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8-A RESOLUTION
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10-25-83
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12-IN THE COUNCIL OF THE DISTRICT OF COLUMBIA
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14-March 7, 2023
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17-To declare the existence of an emergency with respect to the need to amend An Act to provide
18-for regulation of certain insurance rates in the District of Columbia, and for other
19-purposes, to change the motor vehicle and homeowner insurance rate filing standard from
20-“file-and-use” to require prior approval with a 90- day review period, to require notice and
21-an opportunity for a hearing before a rate filing is determined to be excessive or unfairly
22-discriminatory, and, beginning on September 1, 2023, to require insurers to provide
23-policyholders 60 day advance written notice of any rate increase of 10% or more.
24-
25- RESOLVED, BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this
74+RESOLVED BYTHECOUNCILOFTHEDISTRICTOFCOLUMBIA, Thatthis
2675 resolutionmaybecitedasthe“MotorVehicleandHomeownerInsurancePriorApprovalRate
27-Filing Amendment Emergency Declaration Resolution of 2023” .
28-
76+FilingAmendmentEmergencyDeclarationResolutionof2023”
2977 Sec.2.(a)TheDepartmentofInsurance,Securities,andBanking(“Department”)has
3078 noticedarecenttrendinmotorvehicleandhomeownerinsurancemarketsintheDistrictwhere
3179 insurershavebeenrequestingdouble-digitrateincreases.Insomecases,theincreasesarein
3280 excessof20%.
33-(b) While insurers are entitled to an adequate premium rate in exchange for the insurance
34-coverage they provide, the Commissioner is concerned about the impact of these rate increases
35-on policyholders. Because the rate filings of motor vehicle and hom eowner insurers currently
36-operate under a “file-and-use” standard in the District, which means that the insurers may
37-implement their rate increases immediately upon filing their rates with the Commissioner, the
38-Department is often unable to review the rate filings and consult with the insurers to substantiate
39-the rate increases before the rate increases take effect.
40- (c) In addition, the Commissioner is concerned that the large premium increases could
41-cause policyholders to miss payments due to their inability to afford the increased rates while at
42-the same time lacking sufficient time to shop for more affordable insurance, which could result
43-in policies lapsing due to non- payment and an increase in uninsured motorists and homeowners.
44- (d) By changing the rate filing standard for motor vehicle and homeowner insurer rate
45-filings from “ file-and-use” to require prior approval, the Department will have time to review the ENROLLED ORIGINAL
81+(b)Whileinsurersareentitledtoanadequatepremiumrateinexchangeforthe
82+insurancecoveragetheyprovide,theCommissionerisconcernedabouttheimpactoftheserate
83+increasesonpolicyholders.Inaddition,becausetheratefilingsofmotorvehicleandhomeowner
84+insurerscurrentlyoperateunderafileandusestandardintheDistrict,whichmeansthatthe
85+insurersmayimplementtheirrateincreasesimmediatelyuponfilingtheirrateswiththe
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104+Commissioner,theDepartmentisoftenunabletoreviewtheratefilingsandconsultwiththe
105+insurerstosubstantiatetherateincreasesbeforetherateincreasestakeeffect.
106+(c)Inaddition,theCommissionerisconcernedthatthelargepremiumincreases
107+couldcausepolicyholderstomisspaymentsduetotheirinabilitytoaffordtheincreasedrates,
108+whileatthesametimelackingsufficienttimetoshopformoreaffordableinsurance.Suchan
109+instancecouldresultinpolicieslapsingduetonon-paymentandanincreaseinuninsured
110+motoristsandhomeowners.
111+(d)Bychangingtheratefilingstandardformotorvehicleandhomeownerinsurer
112+ratefilingsfromfileandusetopriorapproval,theDepartmentwillhavetimetoreviewthe
113+filingsandensurethattherateincreasesareneitherexcessivenordiscriminatorybeforethenew
114+ratesbecomeeffective.Further,byrequiringinsurerstoprovide60daysadvancewrittennotice
115+ofanyrateincreaseof10%ormore,policyholderswillhavemoretimetoconsideralternative
116+insuranceoptions.
117+Sec.3.TheCouncildeterminesthatthecircumstancesenumeratedinsection2constitute
118+emergencycircumstancesmakingitnecessarythattheMotorVehicleandHomeownerInsurance
119+PriorApprovalRateFilingAmendmentEmergencyActof2022beadoptedafterasingle
120+reading.
121+Sec.4.Thisresolutionshalltakeeffectimmediately.
122+
123+
124+GOVERNMENT OFTHEDISTRICTOFCOLUMBIA
125+OfficeoftheAttorneyGeneral
126+
127+xk
128+na
129+Ea
130+LegalCounsetDivision
131+ORANDUM
132+TO: BeverlyL.Perry
133+SeniorAdvisor
134+OfficeoftheSeniorAdvisor
135+FROM:MeganD.Browder
136+DeputyAttorneyGeneral
137+LegalCounselDiv
138+DATE:November8,2022
139+RE: LegalSufficiencyCertificationofDraftLegislation,the“MotorVehicleand
140+HomeownerInsurancePriorApprovalFilingAmendmentActof2022,”Emergency
141+VersionandResolution,andTransmittalLetter
142+(AE-22-166)
143+ThisistoCertifythatthisomticenasreviewedtheabove-referenceddraft
144+legislationandfoundittobelegallysufficient.Ifyouhaveanyquestions,pleasedonothesitateto
145+callmeat(202)724-5524,
146+Megoint
147+MeganD.Browder
148+GovernmentoftheDistrictofColumbia
149+OfficeoftheChiefFinancialOfficer
150+akk
151+EE
152+Cae
153+GlenLee
154+ChiefFinancialOfficer
155+MEMORANDUM
156+TO: TheHonorablePhilMendelson
157+Chairman,CounciloftheDistrictoro bia
158+FROM: GlenLee LHMe
159+ChiefFinancialOffi
160+DATI
161+
162+November7,2022
163+SUBJECT: FiscalImpactStatement-MotorVehicleandHomeownerInsurance
164+PriorApprovalRateFilingEmergencyAmendmentActof2022
165+REFERENCE: DraftBillasprovidedtotheOfficeofRevenueAnalysisonOctober27,
166+2022
167+
168+Conclusion
169+Fundsaresufficientinthefiscalyear2023throughfiscalyear2026budgetandfinancialplanto
170+implementthebill.
171+Background
172+TheDepartmentofInsurance,SecuritiesandBanking(DISB)approvesrateadjustmentsfrom
173+insurerstoensuretheyareadequate,notexcessive,andnotunfairlydiscriminatory.Formotor
174+vehicleinsurance,DISBallowsaninsurertofiletheirnewratesandthenbeginchargingthoserates
175+priortoDISBapproval.
176+‘Thebillchangesthestandardandappliesittohomeownerinsurersaswell.Bothmotorvehicleand
177+homeownerinsurancecompanieswillneedtofilenewratesandwaitupto60daysforDISBto
178+approveordenytherates.IfDISBdoesnotdecideontherateswithinthattime,thentheratesare
179+deemedtobeapproved.AninsurercanappealaDISBdecisionthatratesareexcessiveor
180+discriminatorywithin60daysofthedecision.
181+
182+"AnActtoprovideforregulationofcertaininsuranceratesintheDistrictofColumbia,andforother
183+purposes,approvedMay20,1968(62Stat.242;D.C.OfficialCode§31-2703(f)(2)).
184+
185+1350PennsylvaniaAvenue,NW,Suite203,Washington,DC20004(202)727-2476
186+www.cto.degov
46187
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190+‘TheHonorablePhilMendelson
191+FIS:“MotorVehicleandHomeownerInsurancePriorApprovalRateFilingEmergencyAmendmentActof
192+2022,”DraftBillasprovidedtotheOfficeofRevenueAnalysisonOctober27,2022
193+FinancialPlanImpact
194+Fundsaresufficientinthefiscalyear2023throughfiscalyear2026budgetandfinancialplanto
195+implementthebill.DISBcurrentlyholdshearingsforadverserulingsandcanabsorbanycosts
196+associatedwithholdingthesehearingspriortoauthorizinganinsurertoimposenewrates.
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52-filings and ensure that the rate increases are neither excessive nor discriminatory before the new
53-rates become effective.
54- (e) Further, by requiring insurers to provide a 60 -day advance written notice to
55-policyholders of any rate increase of 10% or more, policyholders will have more time to consider
56-alternative insurance options .
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58-Sec. 3. The Council determines that the circumstances enumerated in section 2 constitute
59-emergency circumstances making it necessary that the Motor Vehicle and Homeowner Insurance
60-Prior Approval Rate Filing Emergency Amendment Act of 2023 be adopted after a single
61-reading.
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63-Sec. 4. This resolution shall take effect immediately.
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