Date: January 31, 1997
BULLETIN 97 - 3
To: ALL ADMITTED PROPERTY AND CASUALTY INSURERS OFFERING PRIVATE PASSENGER AUTOMOBILE INSURANCE AND OTHER INTERESTED PARTIES
Subject: SUBMISSION OF PRIVATE PASSENGER AUTOMOBILE INSURANCE CLASS PLANS AND EMERGENCY REGULATION ER-33.
On January 17, 1997, the Insurance Commissioner of the State of California issued a Notice of Proposed Adoption of Emergency Regulations and Repeal of Existing Regulations, Department of Insurance File No. ER - 33. The Commissioner has decided that he will not seek the adoption of the emergency regulations and, therefore, will not submit them to the Office of Administrative Law. All insurers offering private passenger automobile insurance in California still must file new rating plans which comply with the requirements of Title 10, Chapter 5, Subchapter 4.7, Sections 2632.1 through 2632.16 by February 18, 1997.
The use of private passenger automobile insurance rating factors which are based on a person's failure to comply with the financial responsibility laws has been challenged in two proceedings, Consumers Union et. al. vs. Quackenbush (Southern California Auto Club), San Francisco Superior Court Case No. 982191, and Proposition 103 Enforcement Project vs. Quackenbush (Safeco), San Francisco Superior court Case No. 982646. On December 23, 1996, San Francisco Superior Court Judge William Cahill issued an oral ruling which did not address the substantive legality of the use of person's "failure to comply with financial responsibility laws" as a rating factor. However, Judge Cahill determined in both cases that if the Commissioner wanted to allow the use of specific rating factors, he is required by Insurance Code Section 1861.02(a)(4) to adopt them by regulation. Judge Cahill has yet to issue his final order in either of those proceedings.
As Judge Cahill's final order in the above-mentioned proceedings may impact rating plans filed on February 18, 1997, further guidance will be forthcoming from the Department of Insurance with respect to any plans that are affected by any final order issued by the Judge. Insurers with plans affected by the final order should expect to submit amendments to their filed plans in order to comply with the requirements of the order. The Commissioner has determined that he will not approve the use of the "failure to comply with the financial responsibility laws" rating factor, or any other factor based thereon, in any rating plan filed pursuant to the Private Passenger Rating Factor Regulations (Title 10, Chapter 5, Subchapter 4.7, Sections 2632.1 through 2632.16).
Questions regarding this bulletin may be addressed to:
Brian G. Soublet
45 Fremont Street, 21st Floor
San Francisco, CA 94105
(415) 538 - 4162.