Administrative Code

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Virginia Administrative Code
Title 14. Insurance
Agency 5. State Corporation Commission, Bureau of Insurance
Chapter 345. Rules Governing Rate Stabilization in Property and Casualty Insurance

14VAC5-345-40. Filing requirements.

A. A rate stabilization rule shall be filed as supplementary rate information in accordance with the provisions of § 38.2-1906 of the Code of Virginia.

B. A rate stabilization rule shall detail the application of the rate stabilization plan. This rule shall be clear and shall specify:

1. The source of the renewals subject to the rate stabilization plan;

2. The process to be used for the rate stabilization, including an example to illustrate the process;

3. The amount of the rate increase or increase and decrease to be limited;

4. Whether the rate stabilization plan is designed to converge with uncapped rates in subsequent rate filings;

5. The effect, if any, of the rate stabilization rule on any midterm changes;

6. Any limitations on tier movement that will be utilized for rate stabilization;

7. The commencement date of the rate stabilization plan;

8. The duration of the rate stabilization plan; and

9. The expiration date of the rate stabilization plan.

C. The filing shall clearly identify that a rate stabilization plan is included.

D. The insurer shall file and certify to the commission using the Rate Stabilization Plan Certification (Form 345-A), the impact of the proposed capped rate changes over future renewal periods until the capping period ends. The filing should include projections of the effects of the caps on premiums, percentage changes, dollar changes, and the number of policies impacted for each future renewal period. In calculating the impact, the insurer may make the assumption that its current book of business is fully retained and renewed into the future until the rate stabilization period ends.

E. If a rate stabilization plan exceeds five years, an explanatory memorandum shall be filed demonstrating the need for such plan. The explanatory memorandum shall contain details to justify the period of time identified in which the uncapped rates for each policyholder will be achieved.

Statutory Authority

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

Historical Notes

Derived from Virginia Register Volume 32, Issue 25, eff. September 1, 2016.

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