§ 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.)