Bill > S820

This bill aims to reduce racial and socioeconomic inequities in auto insurance premium pricing by modifying how insurance companies can use territorial classifications when setting rates for private passenger motor vehicle insurance. Specifically, the bill requires that insurance rate filings balance territorial loss cost indications, limiting the weight given to individual territorial data to no more than 75%, while mandating at least 25% of the rating be based on statewide average loss costs. Insurance companies (referred to as "filers" in the bill) must actuarially justify their territorial loss cost calculations and provide detailed supporting information when submitting rate filings. The bill defines numerous technical terms related to insurance rating, such as "classification," "rating factor," and "premium," and empowers the Commissioner of Insurance to disapprove rate filings that do not conform to these new requirements. Insurance companies are required to make rate filings compliant with these new provisions within 60 days of the bill's passage, with the overall intent of reducing significant rate disparities between different geographic territories, which can disproportionately impact certain communities. The Commissioner is also granted authority to create additional rules to implement and further the bill's objectives of promoting more equitable insurance pricing.

Business and Industry

https://malegislature.gov/Bills/194/S820