DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part of the
legislative instrument. The keyword, one-liner, abstract, and digest do not constitute part of the law
or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
HB 489 Original 2023 Regular Session Huval
Abstract: Provides relative to a ratemaking system utilized by insurers and rate service
organizations.
Present law gives the commissioner of insurance the exclusive authority to accept, review, and
approve any application for insurance rates or rate changes for all lines of property and casualty
insurance. Present law further provides that the commissioner shall exercise his authority in
accordance with present law.
Proposed law repeals present law.
Proposed law provides that every authorized insurer and every rate service organization designated
by an insurer for the filing of rates pursuant to proposed law shall file, with the commissioner, all
rates and any supplementary rate information and all changes and amendments made by it for use
in this state within 30 days after it becomes effective.
Proposed law provides that if a rate service organization files prospective loss costs on behalf of a
member insurer with the commissioner, each member insurer that adopts the rate service
organization's prospective loss costs shall file the loss cost adjustment and loss cost modification
factors applicable to the prospective loss costs filed by the rate service organization. Proposed law
further provides that the aforementioned information shall be prescribed on a form approved by the
commissioner.
Proposed law requires each member insurer, who does not adopt or who delays adoption of the loss
costs filed by the rate service organization, to notify the commissioner of that decision within 30
days.
Proposed law exempts marine, inland marine and transportation risks, which by general custom of
business are not written according to manual rates and rating plans.
Present law provides that, upon written application by an insurer or rate service organization, the
commissioner may authorize a filing he has reviewed to become effective before the expiration of
the waiting period. Present law further provides that a filing shall be deemed to meet the
requirements of present law, unless disapproved in writing by the commissioner within the 45 day
waiting period.
Proposed law repeals present law. Present law provides, unless notified by the commissioner that a filing is incomplete or disapproved,
the insurer or rating organization may commence use of the filed rates upon expiration of 45 days
from the date of receipt from the commissioner.
Proposed law repeals present law.
Proposed law allows the commissioner to require the filing of the following supporting data:
(1)The experience and judgment of the filer.
(2)The experience and judgment of other insurers or rate service organizations.
(3)The filer's interpretation of any statistical data relied upon.
(4)A description of the methods used in making the rates.
(5)A description of the methods used and statistics relied on by the insurer in developing a loss
cost modification factor and providing a loss cost adjustment.
(6)A description of the methods used and statistics relied on by the rate service organization in
developing its prospective loss costs filing.
Proposed law prohibits the commissioner from requiring an insurer to file the insurer's final rate
pages that combine the prospective loss costs separately filed by the rate service organization with
the loss cost modification factor filed by the insurer.
Proposed law allows the commissioner to exempt any insurance rate, rating class, rating rule or
rating program, or type of filing which in his opinion is not desirable or necessary for the protection
of the public.
Present law provides that the commissioner may determine if there is an existing competitive or
noncompetitive market and he may require reasonable notice for a public hearing prior to
determining if a market is noncompetitive. Present law further provides that if, after a public
hearing, the commissioner determines the market to be noncompetitive, all rate filings shall follow
the provisions of present law without regard to the exception specified in present law.
Proposed law repeals present law.
Proposed law provides that if, after a hearing, the commissioner declares a particular market to be
noncompetitive, the commissioner shall order that all rates or rate changes and all supplementary rate
information be filed within 30 days before the effective date. Proposed law further provides that the
order shall remain in effect until the commissioner determines that a competitive market has been
restored.
Proposed law provides that if the commissioner finds that a rate is not in compliance with present law, he shall issue an order specifying how it is not in compliance. Proposed law further provides
that in addition to the order, the commissioner shall issue a statement providing that within 75 days
after issuance that the rate will no longer be effective.
Proposed law allows any insurer, rate service organization, or advisory organization to request a
public hearing and have an order issued in accordance with the provisions of present law.
Present law provides that no provision of present law shall prohibit the commissioner from
conducting market conduct exams to ensure the rates being charged by insurers are not inadequate,
excessive, or unfairly discriminatory.
Proposed law retains present law.
(Amends R.S. 22:1451(B)-(F); Adds R.S. 22:1451(G)-(L))