Bill > H1263

This bill aims to reduce racial and socioeconomic inequities in auto insurance pricing by introducing new regulations for 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 individual territorial loss costs with a statewide average, mandating that territorial classifications can only represent up to 75% of the rate calculation, with at least 25% coming from statewide average loss costs. Insurance companies (referred to as "filers") must provide detailed actuarial justification for their territorial loss cost calculations and are prohibited from implementing any changes that would undermine this requirement. The bill defines numerous technical terms related to insurance rating, such as "classification," "rating factor," and "premium," and gives the Commissioner of Insurance authority to disapprove rate filings that do not comply with these new guidelines. All insurers writing private passenger automobile insurance must submit a compliant rate filing within 60 days of the bill's passage. The underlying goal is to reduce significant rate disparities between different geographical territories, which can often disproportionately impact lower-income and minority communities, by creating a more balanced approach to calculating insurance rates.

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https://malegislature.gov/Bills/194/H1263