§ 2350 — Flexible rating for nonbusiness automobile insurance policies

§ 2350. Flexible rating for nonbusiness automobile insurance policies.\n(a) Except as provided in subsection (b) of this section, overall\naverage (for all coverages combined) rate level increases or decreases\nof five percent above or below the insurer's rates in effect may take\neffect without prior approval with respect to rates for policies\ncovering losses or liabilities arising out of the ownership of a motor\nvehicle predominantly used for nonbusiness purposes, including\nclassification plans predominantly consisting of vehicles used for\nnonbusiness purposes, when a natural person is the named insured under a\npolicy of automobile insurance.\n (b) Notwithstanding any other provisions of this article, for any\npolicies governed by this section, filings that produce rate level\nchanges within the limitation specified in subsection (a) of this\nsection shall become effective without prior approval pursuant to\nsubsection (a) of section two thousand three hundred five of this\narticle, provided however (1) that no more than two rate increases the\ntotal of which shall not exceed the limitation specified in subsection\n(a) of this section may be implemented during any twelve month period;\nand (2) no rate increase within the limitation specified in subsection\n(a) of this section may be implemented until the onset of the new policy\nperiod and unless the insurer, at least thirty but not more than sixty\ndays in advance of the end of the policy period, mails or delivers to\nthe named insured, at the address shown in the policy, a written notice\nof its intention to change the rate. The specific reason or reasons for\nthe rate change shall be stated in or shall accompany the notice.\n (c) The superintendent shall promulgate rules and regulations\nimplementing the provisions of this section.\n (d) The superintendent shall monitor the degree and continued\nexistence of competition and the effectiveness of flexible rating in\nthis state on an on-going basis. In doing so, the superintendent shall\nutilize the following standards or factors:\n (1) the standards contained in section two thousand three hundred\neight of this article;\n (2) existing relevant information, analytical systems and other\nsources, or rely on some combination thereof;\n (3) the number of insurers or group of affiliated insurers actively\nengaged in providing coverage, taking into account the specialization\ntraditionally required for insurance in the particular rating territory;\n (4) measures of market concentration and changes of market\nconcentration over time, which may include the use of\nHerfindahl-Hirschman Index (HHI) and the United States Department of\nJustice merge guidelines for an unconcentrated market ease of entry, and\nthe existence of financial or economical barriers that could prevent new\nfirms from entering the market;\n (5) the extent to which any insurer or group of affiliated insurers\ncontrols all or a dominant portion of the market has actively sought to\nprevent competition;\n (6) whether the total number of companies writing the line of\ninsurance in this state is sufficient to provide multiple options;\n (7) the availability of insurance coverage to consumers;\n (8) the opportunities available to consumers in the market to acquire\npricing and other consumer information; and\n (9) any other factions relevant to inquiry.\n Such activities may be conducted internally within the department, in\ncooperation with other state insurance departments, through outside\ncontractors and/or in any other appropriate manner.\n