{"id":894767,"date":"2018-08-23T15:38:15","date_gmt":"2018-08-23T21:38:15","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=894767"},"modified":"2018-08-23T15:38:15","modified_gmt":"2018-08-23T21:38:15","slug":"california-department-insurance-issues-opinion-underwriting-rules-submitted-carriers-public-information","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/california-department-insurance-issues-opinion-underwriting-rules-submitted-carriers-public-information\/","title":{"rendered":"California Department of Insurance Issues Opinion That Underwriting Rules Submitted By Carriers Are Public Information"},"content":{"rendered":"<p>Lawrence Moon | <a href=\"https:\/\/www.propertyinsurancecoveragelaw.com\/2018\/08\/articles\/insurance\/california-department-of-insurance-issues-opinion-that-underwriting-rules-submitted-by-carriers-are-public-information\/\" target=\"_blank\" rel=\"noopener\">Property Insurance Coverage Law Blog<\/a> | August 19, 2018<\/p>\n<p>Under California Insurance Code section 1861.05(b), most property and casualty insurers seeking a rate change must submit an application that includes various financial information and \u201csuch other information as the commissioner may require,\u201d including what the Department of Insurance describes as \u201cunderwriting rules.\u201d \u201cUnderwriting rules\u201d are \u201cany rule or factor used by an insurer in the process of examining, accepting, or rejecting insurance risks, and classifying those risks selected in order to charge the proper premium for each.\u201d<sup>1<\/sup><\/p>\n<p>Under Insurance Code section 1861.07, all information provided to the Commissioner of Insurance in connection with a rate change is to be available for public inspection. That section, which was added in Proposition 103, also states that section 6254(d) of the Government Code and Section 1857.9 of the Insurance Code \u201cshall not apply\u201d to the materials required to be submitted to the Commissioner in a rate change application. Under the language of those sections, certain information may be kept confidential and not revealed by the Commissioner, including trade secret information eligible for protection from disclosure under section 1060 of California\u2019s Evidence Code.<\/p>\n<p>Relying heavily on the California Supreme Court\u2019s decision in\u00a0<em>State Farm Mut. Auto Ins. Co. v. Garamendi<\/em>, 32 Cal.4th 1029 (2004), the General Counsel of the Department of Insurance issued an opinion earlier this month clarifying the Department\u2019s position regarding the interplay between the transparency sought by Insurance Code section 1861.07, and the evidentiary and statutory disclosure protections in section 1857.9 of the Insurance Code and section 1060 of the Evidence Code.<sup>2<\/sup>\u00a0The opinion concludes that materials submitted to the Department by insurance companies seeking a rate change must be made available to the public, even if the documents have been marked \u201cconfidential,\u201d \u201cproprietary,\u201d or \u201ctrade secret\u201d by the carrier, or otherwise qualify for protection from disclosure under section 1857.9 of the Insurance Code or section 1060 of the Evidence Code.<\/p>\n<p>Specifically, the opinion states:<\/p>\n<blockquote><p>Underwriting rules filed in connection with a rate application pursuant to Insurance Code section 1861.05(b) must be available for public inspection pursuant to Insurance Code section 1861.07 regardless of whether such underwriting rules are marked \u201cconfidential,\u201d \u201cproprietary,\u201d or \u201ctrade secret.\u201d<sup>3<\/sup><\/p><\/blockquote>\n<p>In reaching its conclusion, the Department noted that \u201ca rate application that does not include underwriting rules or denominates such underwriting rules as confidential or not subject to public inspection is incomplete under Insurance Code section 1861.05(b) and insufficient to trigger public notice of the rate application pursuant to Insurance Code section 1861.05(c).\u201d<\/p>\n<p>The Department concluded that,<\/p>\n<blockquote><p>Providing public access to all information submitted to the Commissioner pursuant to Article 10 [of the Insurance Code] is consistent with Proposition 103\u2019s goal of fostering consumer participation in the rate review process. The application of any other statutory exemption from disclosure would also nullify the broad disclosure mandate of Insurance Code section 1861.07. Accordingly, there is no statutory exemption to the disclosure requirements set forth in Insurance Code section 1861.07 applicable to underwriting rules.<\/p><\/blockquote>\n<p>________________________<br \/>\n<sup>1<\/sup>\u00a0California Department of Insurance Opinion, dated August 10, 2018,\u00a0<em>Confidentiality of Underwriting Rules Filed with Rate Applications Pursuant to California Insurance Code section 1861.05(b)<\/em>, page 1.<br \/>\n<sup>2<\/sup>\u00a0In\u00a0<em>Garamendi<\/em>, the California Supreme Court upheld the Commissioner\u2019s authority to make insurers\u2019 \u201cCommunity Service Statements\u201d publicly available. The Court also ruled that, under Insurance Code section 1861.07, trade secret information included in a Community Service Statement is not exempt from disclosure by the Commissioner.<br \/>\n<sup>3<\/sup>\u00a0<em>Citing Garamendi<\/em>, 32 Cal.4th at 1046.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Lawrence Moon | Property Insurance Coverage Law Blog | August 19, 2018 Under California Insurance Code section 1861.05(b), most property and casualty insurers seeking a rate change must submit an application that includes various financial information and \u201csuch other information as the commissioner may require,\u201d including what the Department of Insurance describes as \u201cunderwriting rules.\u201d&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/california-department-insurance-issues-opinion-underwriting-rules-submitted-carriers-public-information\/\">Continue reading <span class=\"screen-reader-text\">California Department of Insurance Issues Opinion That Underwriting Rules Submitted By Carriers Are Public Information<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[3],"tags":[9895,88,10561,10560],"class_list":["post-894767","post","type-post","status-publish","format-standard","hentry","category-insurance-claims","tag-advise-consult","tag-california","tag-california-department-of-insurance","tag-underwriting-rules","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>California Department of Insurance Issues Opinion That Underwriting Rules Submitted By Carriers Are Public Information - Advise &amp; 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