14 Va. Admin. Code § 5-345-30

Current through Register Vol. 41, No. 2, September 9, 2024

Section 14VAC5-345-30 - General standards

A. An insurer may utilize rate capping to stabilize insurance rates charged to (i) its renewal policies; (ii) policies acquired from another insurer pursuant to a written agreement of acquisition, merger, or sale that transfers all or part of the other insurer's book of business; or (iii) policies acquired by an agent book of transfer.

B. A rate stabilization plan shall be unambiguous and applied uniformly and fairly to all renewal policies affected by such plan.

C. A rate stabilization plan may cap increases in premium only or increases and decreases in premium, but not decreases only. Caps on increases and decreases are not required to be equivalent.

D. A rate stabilization plan is expected to result in individual policy premiums converging with the insurer's uncapped rates. A rate stabilization plan shall achieve this result within five years unless the insurer initially requests a shorter period or justifies a longer period in the rate stabilization plan filing.

E. A rate stabilization rule may be amended within the original rate stabilization plan period.

F. A rate stabilization rule may be filed in conjunction with a routine rate filing or as a separate rule filing.

G. In each rate filing subsequent to the implementation of a rate stabilization plan, the insurer shall demonstrate that the actuarial indication does not redundantly measure rate need by demonstrating that premiums at current rate level underlying the actuarial indication are on an uncapped basis.

H. An insurer may file a rate level change or modify rating factors or other supplementary rate information while a rate stabilization plan is in effect. The insurer shall explain whether:

1. The existing rate stabilization plan will continue to apply for the filed duration; or

2. The rate stabilization plan will be amended.

14 Va. Admin. Code § 5-345-30

Derived From Virginia Register Volume 32, Issue 25, eff. 9/1/2016.

Statutory Authority: §§ 12.1-13 and 38.2-223 of the Code of Virginia.