On March 24, 2023, the District of Columbia enacted the "Motor Vehicle and Homeowner Insurance Prior Approval Rate Filing Emergency Amendment Act of 2023" (D.C. Act 25-58). The bill amends existing regulations for motor vehicle and homeowner insurance rate filings and will impact property and casualty insurers in the following ways:
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Prior Approval with 90-Day Review Period: Insurers must now obtain prior approval for private passenger motor vehicle and homeowner insurance rate filings. The Commissioner has 90 days to review and approve or disapprove rate filings. If the Commissioner does not make a determination within the 90-day review period, the rate filing will be deemed approved.
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Notice and Opportunity for a Hearing: If the Commissioner determines that a rate filing may be excessive or unfairly discriminatory, the insurer will be provided with notice, reasons for the determination, and an opportunity for a hearing. Insurers have 15 days to request a hearing, which must take place within 60 days of the request. The insurer will bear the cost of the hearing.
- 60-Day Advance Notice of Rate Increases: Beginning September 1, 2023, for policies renewing after October 30, 2023, insurers must provide a policyholder with 60-day advance written notice of any rate increase approved by the Commissioner that will result in a 10% or higher increase in the policyholder's premium. The notice must include the percentage and amount of the increase as it pertains to the individual policyholder.
To ensure compliance with the new regulations, property and casualty insurers should:
- Review and update rate filing procedures to comply with the prior approval and 90-day review period requirements;
- Establish processes to promptly respond to Commissioner determinations and hearing requests; and
- Implement a system for providing 60-day advance written notice of rate increases of 10% or more to affected policyholders.
The Emergency Act took effect following approval by the Mayor on March 24, 2023 and shall remain in effect for no longer than 90 days. The Act expires on June 22, 2023. Of special note, there is an identical bill pending before the DC City Council that would make the provisions of this Emergency Act temporary for a period of 225 days from the date the temporary act is enacted. Therefore, while this Emergency Act technically expires in June, it may be superseded by the temporary act prior to its expiration.
