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INSURERS: NOTICE AUGUST 15, 1997
TO: ALL ADMITTED PROPERTY AND CASUALTY INSURERS OFFERING PRIVATE PASSENGER AUTOMOBILE INSURANCE AND OTHER INTERESTED PARTIES
SUBJECT: OCTOBER 1, 1997 UNIFORM IMPLEMENTATION DATE FOR SUBMISSION OF NEW AUTOMOBILE CLASS PLANS
Title 10, California Code of Regulations, Chapter 5, Sections 2632.1 - 2632.16 provide for the implementation of new automobile class plans pursuant to the provisions of Proposition 103. Section 1632.11 (d) provides that the Commissioner will subsequently give public notice of a date selected for uniform implementation of approved plans. On June 27, 1997, pursuant to Section 1632.11 (d), the Commissioner announced October 1, 1997 as that uniform implementation date. This notice provides further information regarding the uniform implementation date.
- In light of the ongoing class plan hearings involving three large automobile writers, the Department has received inquiries regarding the continued viability of the October 1, 1997 uniform implementation date
The uniform implementation date remains October 1, 1997. All insurers with class plans submitted to the Department pursuant to RH 338 are expected to fully comply with the uniform implementation date. It is impossible to know until the conclusion of the ongoing hearings whether those hearings will raise any issues which will require revisions to any class plans, either by the parties to the hearings or by any other insurers. The Department does expect, however, that if any such revisions are necessary, sufficient time would be allowed for an orderly implementation of those revisions. Since this issue is purely a matter of speculation at this time, the pendency of these hearings is not a justification for failure to comply with the October 1 implementation date.
- Concerns have been expressed by some insurers that, due to delayed class plan deemer dates, time needed to generate renewal notices, and other time-sensitive concerns, implementation of the class plans may, in some cases, extend beyond the uniform implementation date. The Department recognizes and understands that there may be certain realities and practical considerations which make strict adherence to the uniform implementation date difficult; however:
- Implementation must occur on the uniform implementation date or as soon as possible thereafter;
- Based on the Department=s knowledge of the status of the submitted class plans, we expect the majority of companies to implement fully by the uniform implementation date. There appears to be no valid reason why most insurers cannot comply with the deadline which has been fully known and widely publicized since June 27, 1997;
- The Department expects any insurer not fully implementing its class plan on October 1, 1997 to notify the Department of that fact. That notification should state clearly: 1) that the company will not be implementing on time as required; 2) the reasons which, in the insurer=s opinion, justify the failure to comply; and 3) the date upon which full compliance is expected. The notification should be directed to:
Chief, Rate Regulation Division
45 Fremont Street, #2300
San Francisco, CA 94105
- The Commissioner emphasizes that notwithstanding this communication updating the uniform implementation date notice dated June 27, 1997, the Department will not excuse any failure to comply with the class plan regulations, including the uniform implementation date requirement. Extenuating circumstances will be reviewed on a case-by-case basis. Those insurers displaying diligence and good faith notwithstanding an untimely implementation should expect maximum cooperation from the Department during this transition to the new class plans. However, any insurer unable to document sufficient mitigation for noncompliance with the October 1, 1997 uniform implementation date should expect that the entire history and nature of its class plan submission and approval process will be reviewed in detail to determine whether intentional or inexcusable neglect has taken place. In cases where such neglect is found by the Department, any resulting notice of noncompliance may encompass the entire period from February 19, 1997, the date upon which class plan filings were due, to the present.
- The Department reiterates that all diligence and concern should be exercised by each insurer which has submitted class plan filings pursuant to RH 338, to fully adhere to the October 1, 1997 uniform implementation date. It is the Department=s view that such compliance will best serve both consumers and insurers.