38.2-1910 - Disapproval of rates.
§ 38.2-1910. Disapproval of rates.
A. If the Commission finds, after providing notice and opportunity to beheard, that a rate is not in compliance with § 38.2-1904, or is in violationof § 38.2-1916, the Commission shall order that use of the rate bediscontinued for any policy issued or renewed after a date specified in theorder. The order may provide for rate modifications. The order may alsoprovide for refund of the excessive portion of premiums collected (i) duringa period not exceeding one year prior to the date of any request or motionfor review made pursuant to § 38.2-1909 and (ii) during all periodssubsequent to any such request or motion until the date of the order. If arefund is ordered, the order may provide for the payment of interest thereonat a rate set by the Commission. Except as provided in subsection B of thissection, the order shall be issued within thirty days after the close of thehearing or within another reasonable time extension fixed by the Commission.
B. Pending a hearing, the Commission may order the suspension prospectivelyof a rate filed by an insurer and reimpose the last previous rate in effectif the Commission has reasonable cause to believe that: (i) a reasonabledegree of competition does not exist in the area with respect to theclassification to which the rate applies, (ii) the filed rate will have theeffect of destroying competition or creating a monopoly, (iii) use of therate will endanger the solvency of the insurer, or (iv) Virginia lossexperience and other factors specifically applicable to the Commonwealth havenot been properly used to determine the rates. If the Commission suspends arate under this provision, it shall hold a hearing within fifteen businessdays after issuing the order suspending the rate unless the right to ahearing is waived by the insurer. In addition, the Commission shall make itsdetermination and issue its order as to whether the rate shall be disapprovedwithin fifteen business days after the close of the hearing.
C. At any hearing held under the provisions of subsection A or B of thissection, the insurer shall have the burden of justifying the rate inquestion. All determinations of the Commission shall be on the basis offindings of fact and conclusions of law. If the Commission disapproves arate, the disapproval shall take effect not less than fifteen days after itsorder and the last previous rate in effect for the insurer shall be reimposedfor a period of one year unless the Commission approves a substitute orinterim rate under the provisions of subsection D or E of this section.
D. For one year after the effective date of a disapproval order, no ratepromulgated to replace a rate disapproved under the order may be used untilit has been filed with the Commission and not disapproved within sixty daysafter filing.
E. Whenever an insurer has no legally effective rates as a result of theCommission's disapproval of rates or other act, the Commission shall, on theinsurer's request, specify interim rates for the insurer that are high enoughto protect the interests of all parties. The Commission may order that aspecified portion of the premiums be placed in an escrow account approved byit. When new rates become legally effective, the Commission shall order theescrowed funds or any overcharge in the interim rates to be distributedappropriately, except that refunds to policyholders that are de minimis shallnot be required.
(1973, c. 504, § 38.1-279.38; 1976, c. 276; 1986, c. 562; 1987, c. 697; 1990,cc. 290, 597.)