The Vermont Statutes Online

Title 8 : Banking and Insurance

Chapter 128 : Property and Casualty Insurance Rate Regulation

Subchapter 001 : Insurance Rates and Statistics

• § 4689. Approval or disapproval of rates

  (a) Timing of approval or disapproval.

  (1) A rate may be disapproved at any time subsequent to the effective date.

  (2) A rate subject to prefiling may also be disapproved before the effective date.

  (3) A rate for a residual market in which insurers are permitted or mandated by law or by order of the Commissioner to participate shall not become effective until approved by the Commissioner, as provided in section 4688 of this title.

  (b) Bases of disapproval.

  (1) The Commissioner shall disapprove a rate for use in a competitive market if the Commissioner finds that the rate is inadequate or unfairly discriminatory.

  (2) The Commissioner shall disapprove a rate for use in a noncompetitive or residual market if the Commissioner finds that the rate is excessive, inadequate, or unfairly discriminatory.

  (c) Disapproval procedure; order; interim rates.

  (1) Disapproval procedure.

  (A) If the Commissioner determines, in accordance with section 4684 of this title, that a reasonable degree of competition does not exist in a market, the Commissioner shall commence a hearing to determine whether or not existing rates are excessive within 30 days of an order finding a market noncompetitive. However, the Commissioner may waive this requirement to hold a hearing if the Commissioner finds such rate filings do not violate the rate standards of this chapter. The Commissioner shall decide whether rates are excessive within 15 days after the conclusion of the hearing. Insurers shall have the burden of proving rates are not excessive in a noncompetitive market.

  (B) If the Commissioner believes that rates in a competitive market violate the inadequacy standard in section 4685 of this title or any other requirement of this chapter, the Commissioner shall require insurers in that market to file additional supporting information for rates. If after reviewing such additional supporting rate information the Commissioner continues to believe that the rates violate these requirements, the Commissioner shall call a hearing before entering any order.

  (C) The Commissioner may disapprove, without a hearing, prefiled rates. However, the insurer or other filer whose rates have been disapproved shall be given a hearing upon written request made within 30 days after the receipt of the disapproval. The Commissioner shall notice in every order of disapproval that a hearing will be granted within 30 days after receipt of a request from an affected insurer.

  (2) Order. If the Commissioner disapproves a rate, the Commissioner shall issue an order specifying in what respect it fails to meet the requirements of this chapter. For rates in effect at the time of disapproval, the Commissioner shall state when the further use of such rate in contracts of insurance made thereafter shall be prohibited.

  (3) Interim rates. In the event existing rates of an insurer are found excessive, the Commissioner shall specify an interim rate at the time he or she issues an order disapproving rates. The interim rate may be modified by the Commissioner upon his or her own motion or upon motion of an insurer. The interim rate or any modification thereof shall take effect prospectively in contracts of insurance written or renewed 15 days after the Commissioner’s decision setting interim rates.

  (4) Distribution of overcharges. When the rates are finally determined, the Commissioner shall order any overcharge in the interim rates to be distributed appropriately, except that refunds to policyholders that are determined to be de minimis by the Commissioner shall be remitted to the State of Vermont General Fund. (Added 1983, No. 238 (Adj. Sess.), § 1; 1987, No. 185 (Adj. Sess.), § 3, eff. May 5, 1988.)