2009 California Insurance Code - Section 1861.01-1861.16 :: Article 10. [reduction And Control Of Insurance Rates]

INSURANCE CODE
SECTION 1861.01-1861.16

1861.01.  Insurance Rate Rollback.  (a) For any coverage for a
policy for automobile and any other form of insurance subject to this
chapter issued or renewed on or after November 8, 1988, every
insurer shall reduce its charges to levels which are at least 20%
less than the charges for the same coverage which were in effect on
November 8, 1987.
   (b) Between November 8, 1988, and November 8, 1989, rates and
premiums reduced pursuant to subdivision (a) may be only increased if
the commissioner finds, after a hearing, that an insurer is
substantially threatened with insolvency.
   (c) Commencing November 8, 1989, insurance rates subject to this
chapter must be approved by the commissioner prior to their use.
   (d) For those who apply for an automobile insurance policy for the
first time on or after November 8, 1988, the rate shall be 20% less
than the rate which was in effect on November 8, 1987, for similarly
situated risks.
   (e) Any separate affiliate of an insurer, established on or after
November 8, 1987, shall be subject to the provisions of this section
and shall reduce its charges to levels which are at least 20% less
than the insurer's charges in effect on that date.

1861.02.  (a) Rates and premiums for an automobile insurance policy,
as described in subdivision (a) of Section 660, shall be determined
by application of the following factors in decreasing order of
importance:
   (1) The insured's driving safety record.
   (2) The number of miles he or she drives annually.
   (3) The number of years of driving experience the insured has had.
   (4) Those other factors that the commissioner may adopt by
regulation and that have a substantial relationship to the risk of
loss. The regulations shall set forth the respective weight to be
given each factor in determining automobile rates and premiums.
Notwithstanding any other provision of law, the use of any criterion
without approval shall constitute unfair discrimination.
   (b) (1) Every person who meets the criteria of Section 1861.025
shall be qualified to purchase a Good Driver Discount policy from the
insurer of his or her choice. An insurer shall not refuse to offer
and sell a Good Driver Discount policy to any person who meets the
standards of this subdivision.
   (2) The rate charged for a Good Driver Discount policy shall
comply with subdivision (a) and shall be at least 20% below the rate
the insured would otherwise have been charged for the same coverage.
Rates for Good Driver Discount policies shall be approved pursuant to
this article.
   (3) (A) This subdivision shall not prevent a reciprocal insurer,
organized prior to November 8, 1988, by a motor club holding a
certificate of authority under Chapter 2 (commencing with Section
12160) of Part 5 of Division 2, and which requires membership in the
motor club as a condition precedent to applying for insurance from
requiring membership in the motor club as a condition precedent to
obtaining insurance described in this subdivision.
   (B) This subdivision shall not prevent an insurer which requires
membership in a specified voluntary, nonprofit organization, which
was in existence prior to November 8, 1988, as a condition precedent
to applying for insurance issued to or through those membership
groups, including franchise groups, from requiring such membership as
a condition to applying for the coverage offered to members of the
group, provided that it or an affiliate also offers and sells
coverage to those who are not members of those membership groups.
   (C) However, all of the following conditions shall be applicable
to the insurance authorized by subparagraphs (A) and (B):
   (i) Membership, if conditioned, is conditioned only on timely
payment of membership dues and other bona fide criteria not based
upon driving record or insurance, provided that membership in a motor
club may not be based on residence in any area within the state.
   (ii) Membership dues are paid solely for and in consideration of
the membership and membership benefits and bear a reasonable
relationship to the benefits provided. The amount of the dues shall
not depend on whether the member purchases insurance offered by the
membership organization. None of those membership dues or any portion
thereof shall be transferred by the membership organization to the
insurer, or any affiliate of the insurer, attorney-in-fact,
subsidiary, or holding company thereof, provided that this provision
shall not prevent any bona fide transaction between the membership
organization and those entities.
   (iii) Membership provides bona fide services or benefits in
addition to the right to apply for insurance. Those services shall be
reasonably available to all members within each class of membership.
   Any insurer that violates clause (i), (ii), or (iii) shall be
subject to the penalties set forth in Section 1861.14.
   (c) The absence of prior automobile insurance coverage, in and of
itself, shall not be a criterion for determining eligibility for a
Good Driver Discount policy, or generally for automobile rates,
premiums, or insurability. However, notwithstanding subdivision (a),
an insurer may use persistency of automobile insurance coverage with
the insurer, an affiliate, or another insurer as an optional rating
factor. The Legislature hereby finds and declares that it furthers
the purpose of Proposition 103 to encourage competition among
carriers so that coverage overall will be priced competitively. The
Legislature further finds and declares that competition is furthered
when insureds are able to claim a discount for regular purchases of
insurance from any carrier offering this discount irrespective of
whether or not the insured has previously purchased from a given
carrier offering the discount. Persistency of coverage may be
demonstrated by coverage under the low-cost automobile insurance
program pursuant to Article 5.5 (commencing with Section 11629.7) and
Article 5.6 (commencing with Section 11629.9) of Chapter 1 of Part 3
of Division 2, or by coverage under the assigned risk plans pursuant
to Article 4 (commencing with Section 11620) of Chapter 1 of Part 3
of Division 2. Persistency shall be deemed to exist even if there is
a lapse of coverage of up to two years due to an insured's absence
from the state while in military service, and up to 90 days in the
last five years for any other reason.
   (d) An insurer may refuse to sell a Good Driver Discount policy
insuring a motorcycle unless all named insureds have been licensed to
drive a motorcycle for the previous three years.
   (e) This section shall become operative on November 8, 1989. The
commissioner shall adopt regulations implementing this section and
insurers may submit applications pursuant to this article which
comply with those regulations prior to that date, provided that no
such application shall be approved prior to that date.

1861.025.  A person is qualified to purchase a Good Driver Discount
policy if he or she meets all of the following criteria:
   (a) He or she has been licensed to drive a motor vehicle for the
previous three years.
   (b) During the previous three years, he or she has not done any of
the following:
   (1) Had more than one violation point count determined as provided
by subdivision (a), (b), (c), (d), (e), (g), or (h) of Section 12810
of the Vehicle Code, but subject to the following modifications:
   (A) For the purposes of this section, the driver of a motor
vehicle involved in an accident for which he or she was principally
at fault that resulted only in damage to property shall receive one
violation point count, in addition to any other violation points that
may be imposed for this accident.
   (B) If, under Section 488 or 488.5, an insurer is prohibited from
increasing the premium on a policy on account of a violation, that
violation shall not be included in determining the point count of the
person.
   (C) If a violation is required to be reported under Section 1816
of the Vehicle Code, or under Section 784 of the Welfare and
Institutions Code, or any other provision requiring the reporting of
a violation by a minor, the violation shall be included for the
purposes of this section in determining the point count in the same
manner as is applicable to adult violations.
   (2) Had more than one dismissal pursuant to Section 1803.5 of the
Vehicle Code that was not made confidential pursuant to Section
1808.7 of the Vehicle Code, in the 36-month period for violations
that would have resulted in the imposition of more than one violation
point count under paragraph (1) if the complaint had not been
dismissed.
   (3) Was the driver of a motor vehicle involved in an accident that
resulted in bodily injury or in the death of any person and was
principally at fault. The commissioner shall adopt regulations
setting guidelines to be used by insurers for the determination of
fault for the purposes of this paragraph and paragraph (1).
   (c) During the period commencing on January 1, 1999, or the date
10 years prior to the date of application for the issuance or renewal
of the Good Driver Discount policy, whichever is later, and ending
on the date of the application for the issuance or renewal of the
Good Driver Discount policy, he or she has not been convicted of a
violation of Section 23140, 23152, or 23153 of the Vehicle Code, a
felony violation of Section 23550 or 23566, or former Section 23175
or, as those sections read on January 1, 1999, of the Vehicle Code,
or a violation of Section 191.5 or subdivision (a) of Section 192.5
of the Penal Code.
   (d) Any person who claims that he or she meets the criteria of
subdivisions (a), (b), and (c) based entirely or partially on a
driver's license and driving experience acquired anywhere other than
in the United States or Canada is rebuttably presumed to be qualified
to purchase a Good Driver Discount policy if he or she has been
licensed to drive in the United States or Canada for at least the
previous 18 months and meets the criteria of subdivisions (a), (b),
and (c) for that period.

1861.03.  (a) The business of insurance shall be subject to the laws
of California applicable to any other business, including, but not
limited to, the Unruh Civil Rights Act (Sections 51 to 53, inclusive,
of the Civil Code), and the antitrust and unfair business practices
laws (Parts 2 (commencing with Section 16600) and 3 (commencing with
Section 17500) of Division 7 of the Business and Professions Code).
   (b) Nothing in this section shall be construed to prohibit (1) any
agreement to collect, compile and disseminate historical data on
paid claims or reserves for reported claims, provided such data is
contemporaneously transmitted to the commissioner, (2) participation
in any joint arrangement established by statute or the commissioner
to assure availability of insurance, (3) any agent or broker,
representing one or more insurers, from obtaining from any insurer it
represents information relative to the premium for any policy or
risk to be underwritten by that insurer, (4) any agent or broker from
disclosing to an insurer it represents any quoted rate or charge
offered by another insurer represented by that agent or broker for
the purpose of negotiating a lower rate, charge, or term from the
insurer to whom the disclosure is made, or (5) any agents, brokers,
or insurers from utilizing or participating with multiple insurers or
reinsurers for underwriting a single risk or group of risks.
   (c) (1) Notwithstanding any other provision of law, a notice of
cancellation or nonrenewal of a policy for automobile insurance shall
be effective only if it is based on one or more of the following
reasons: (A) nonpayment of premium; (B) fraud or material
misrepresentation affecting the policy or insured; (C) a substantial
increase in the hazard insured against.
   (2) This subdivision shall not prevent a reciprocal insurer,
organized prior to November 8, 1988, by a motor club holding a
certificate of authority under Chapter 2 (commencing with Section
12160) of Part 5 of Division 2, and which requires membership in the
motor club as a condition precedent to applying for insurance, from
issuing an effective notice of nonrenewal based solely on the failure
of the insured to maintain membership in the motor club. This
subdivision shall also not prevent an insurer which issues private
passenger automobile coverage to members of groups that were in
existence prior to November 8, 1988, whether membership, franchise,
or otherwise, and to those who are not members of groups from issuing
an effective notice of nonrenewal for coverage provided to the
insured as a member of the group based solely on the failure of the
insured to maintain that membership if (i) the insurer offers to
renew the coverage to the insured on a nongroup basis, or (ii) to
transfer the coverage to an affiliated insurer. The rates charged by
the insurer or affiliated insurer shall have been adopted pursuant to
this article. However, all of the following conditions shall be
applicable to that insurance:
   (A) Membership, if conditioned, is conditioned only on timely
payment of membership dues and other bona fide criteria not based
upon driving record or insurance, provided that membership in a motor
club may not be based on residence in any area within the state.
   (B) Membership dues are paid solely for and in consideration of
the membership and membership benefits and bear a reasonable
relationship to the benefits provided. The amount of the dues shall
not depend on whether the member purchases insurance offered by the
membership organization. None of those membership dues or any portion
thereof shall be transferred by the membership organization to the
insurer, or any affiliate of the insurer, attorney-in-fact,
subsidiary, or holding company thereof, provided that this provision
shall not prevent any bona fide transaction between the membership
organization and those entities.
   (C) Membership provides bona fide services or benefits in addition
to the right to apply for insurance. Those services shall be
reasonably available to all members within each class of membership.
   Any insurer that violates subparagraphs (A), (B), or (C) shall be
subject to the penalties set forth in Section 1861.14.

1861.04.  Full Disclosure of Insurance Information.  (a) Upon
request, and for a reasonable fee to cover costs, the commissioner
shall provide consumers with a comparison of the rate in effect for
each personal line of insurance for every insurer.

1861.05.  Approval of Insurance Rates.  (a) No rate shall be
approved or remain in effect which is excessive, inadequate, unfairly
discriminatory or otherwise in violation of this chapter. In
considering whether a rate is excessive, inadequate or unfairly
discriminatory, no consideration shall be given to the degree of
competition and the commissioner shall consider whether the rate
mathematically reflects the insurance company's investment income.
   (b) Every insurer which desires to change any rate shall file a
complete rate application with the commissioner. A complete rate
application shall include all data referred to in Sections 1857.7,
1857.9, 1857.15, and 1864 and such other information as the
commissioner may require. The applicant shall have the burden of
proving that the requested rate change is justified and meets the
requirements of this article.
   (c) The commissioner shall notify the public of any application by
an insurer for a rate change. The application shall be deemed
approved sixty days after public notice unless (1) a consumer or his
or her representative requests a hearing within forty-five days of
public notice and the commissioner grants the hearing, or determines
not to grant the hearing and issues written findings in support of
that decision, or (2) the commissioner on his or her own motion
determines to hold a hearing, or (3) the proposed rate adjustment
exceeds 7% of the then applicable rate for personal lines or 15% for
commercial lines, in which case the commissioner must hold a hearing
upon a timely request. In any event, a rate change application shall
be deemed approved 180 days after the rate application is received by
the commissioner (A) unless that application has been disapproved by
a final order of the commissioner subsequent to a hearing, or (B)
extraordinary circumstances exist. For purposes of this section,
"received" means the date delivered to the department.
   (d) For purposes of this section, extraordinary circumstances
include the following:
   (1) Rate change application hearings commenced during the 180-day
period provided by subdivision (c). If a hearing is commenced during
the 180-day period, the rate change application shall be deemed
approved upon expiration of the 180-day period or 60 days after the
close of the record of the hearing, whichever is later, unless
disapproved prior to that date.
   (2) Rate change applications that are not approved or disapproved
within the 180-day period provided by subdivision (c) as a result of
a judicial proceeding directly involving the application and
initiated by the applicant or an intervenor. During the pendency of
the judicial proceedings, the 180-day period is tolled, except that
in no event shall the commissioner have less than 30 days after
conclusion of the judicial proceedings to approve or disapprove the
application. Notwithstanding any other provision of law, nothing
shall preclude the commissioner from disapproving an application
without a hearing if a stay is in effect barring the commissioner
from holding a hearing within the 180-day period.
   (3) The hearing has been continued pursuant to Section 11524 of
the Government Code. The 180-day period provided by subdivision (c)
shall be tolled during any period in which a hearing is continued
pursuant to Section 11524 of the Government Code. A continuance
pursuant to Section 11524 of the Government Code shall be decided on
a case by case basis. If the hearing is commenced or continued during
the 180-day period, the rate change application shall be deemed
approved upon the expiration of the 180-day period or 100 days after
the case is submitted, whichever is later, unless disapproved prior
to that date.

1861.055.  (a) The commissioner shall adopt regulations governing
hearings required by subdivision (c) of Section 1861.05 on or before
120 days after the enactment of this section. Those regulations
shall, at the minimum, include timelines for scheduling and
commencing hearings, and procedures to prevent delays in commencing
or continuing hearings without good cause.
   (b) The sole remedy for failure by the commissioner to adopt the
regulations required by subdivision (a) within the prescribed period
or to abide by those regulations once adopted shall be a writ of
mandate by any aggrieved party in a court of competent jurisdiction
to compel the commissioner to adopt those regulations, or commence or
resume hearings.
   (c) Nothing in this section shall preclude the commissioner from
commencing hearings required by subdivision (c) of Section 1861.05
prior to adopting the regulations required by this section.
   (d) The administrative law judge shall render a decision within 30
days of the closing of the record in the proceeding.

1861.06.  Public notice required by this article shall be made
through distribution to the news media and to any member of the
public who requests placement on a mailing list for that purpose.

1861.07.  All information provided to the commissioner pursuant to
this article shall be available for public inspection, and the
provisions of Section 6254(d) of the Government Code and Section
1857.9 of the Insurance Code shall not apply thereto.

1861.08.  Hearings shall be conducted pursuant to Chapter 5
(commencing with Section 11500) of Part 1 of Division 3 of Title 2 of
the Government Code, except that:
   (a) Hearings shall be conducted by administrative law judges for
purposes of Sections 11512 and 11517, chosen under Section 11502 or
appointed by the commissioner.
   (b) Hearings are commenced by a filing of a notice in lieu of
Sections 11503 and 11504.
   (c) The commissioner shall adopt, amend, or reject a decision only
under Section 11518.5 and subdivisions (b), (c), and (e) of Section
11517 and solely on the basis of the record as provided in Section
11425.50 of the Government Code.
   (d) Notwithstanding Section 11501, Section 11430.30 and
subdivision (b) of Section 11430.70 shall not apply in these
hearings.
   (e) Discovery shall be liberally construed and disputes determined
by the administrative law judge as provided in Section 11507.7 of
the Government Code.

1861.09.  Judicial reveiw shall be in accordance with Section
1858.6. For purposes of judicial review, a decision to hold a hearing
is not a final order or decision; however, a decision not to hold a
hearing is final.

1861.10.  Consumer Participation.  (a) Any person may initiate or
intervene in any proceeding permitted or established pursuant to this
chapter, challenge any action of the commissioner under this
article, and enforce any provision of this article.
   (b) The commissioner or a court shall award reasonable advocacy
and witness fees and expenses to any person who demonstrates that (1)
the person represents the interests of consumers, and, (2) that he
or she has made a substantial contribution to the adoption of any
order, regulation or decision by the commissioner or a court. Where
such advocacy occurs in response to a rate application, the award
shall be paid by the applicant.
   (c) (1) The commissioner shall require every insurer to enclose
notices in every policy or renewal premium bill informing
policyholders of the opportunity to join an independant, non-profit
corporation which shall advocate the interests of insurance consumers
in any forum. This organization shall be established by an interim
board of public members designated by the commissioner and operated
by individuals who are democratically elected from its membership.
The corporation shall proportionately reimburse insurers for any
additional costs incurred by insertion of the enclosure, except no
postage shall be charged for any enclosure weighing less than 1/3 of
an ounce. (2) The commissioner shall by regulation determine the
content of the enclosures and other procedures necessary for
implementation of this provision. The legislature shall make no
appropriation for this subdivision.

1861.11.  Emergency Authority.  In the event that the commissioner
finds that (a) insurers have substantially withdrawn from any
insurance market covered by this article, including insurance
described by Section 660, and (b) a market assistance plan would not
be sufficient to make insurance available, the commissioner shall
establish a joint underwriting authority in the manner set forth by
Section 11891, without the prior creation of a market assistance
plan.

1861.12.  Group Insurance Plans.  Any insurer may issue any
insurance coverage on a group plan, without restriction as to the
purpose of the group, occupation or type of group. Group insurance
rates shall not be considered to be unfairly discriminatory, if they
are averaged broadly among persons insured under the group plan.

1861.13.  Application.  This article shall apply to all insurance on
risks or on operations in this state, except those listed in Section
1851.

1861.137.  (a) Notwithstanding Section 1861.13, credit insurance
shall not be subject to Sections 1861.01 and 1861.05. However, any
rate for credit insurance shall be filed with the commissioner before
it may be used in this state, and that rate may be used immediately
upon filing with the commissioner.
   (b) The rates for credit insurance shall not be excessive,
inadequate, unfairly discriminatory, or otherwise in violation of
this chapter, except Sections 1861.01 and 1861.05.

1861.14.  Enforcement & Penalties.  Violations of this article shall
be subject to the penalties set forth in Section 1859.1. In addition
to the other penalties provided in this chapter, the commissioner
may suspend or revoke, in whole or in part, the certificate of
authority of any insurer which fails to comply with the provisions of
this article.

1861.15.  (a) An insurer issuing policies as described in
subdivision (a) of Section 660, shall, as a condition of obtaining
and maintaining a certificate of authority to transact the business
of insurance in this state, offer to persons who qualify for a good
driver discount pursuant to Sections 1861.02 and 1861.025, automobile
liability coverage in the minimum financial responsibility coverage
amounts specified in subdivision (a) of Section 16056 of the Vehicle
Code, and sell that coverage to those who request it.
   (b) In soliciting the issuance or renewal of a policy of
automobile liability insurance, an insurer, broker, agent, or any
other employee of the insurer shall disclose to persons eligible for
a good driver discount the minimum financial responsibility coverage
amounts required pursuant to Section 16056 of the Vehicle Code, and
that the insurer is legally required to furnish coverage in those
minimum amounts, if requested.
   (c) Nothing in this section shall be construed to affect any
obligation imposed on any insurer by law to offer and sell any other
kind or amount of insurance.
   (d) This section does not apply to any insurer that, on November
7, 1988, did not offer to sell a minimum financial responsibility
policy as described in subdivision (a) and that did not write more
than 1 percent of the private passenger automobile liability policies
in effect on November 7, 1988.

1861.16.  (a) An insurer issuing a policy described in subdivision
(a) of Section 660 by or through an insurance agent where a
commission is paid, directly or indirectly, to that agent shall, when
issuing a policy in the minimum financial responsibility coverage
amount as required by Section 1861.15, pay a commission on the same
terms and on the same percentage basis to that agent as for any
higher amount of policy coverage sold by that agent. In no case shall
the percentage amount of commission paid to that agent for a policy
of minimum financial responsibility coverage be less than the
percentage commission paid to that agent on any higher level of
policy coverage issued by that insurer.
   (b) An agent or representative representing one or more insurers
having common ownership or operating in California under common
management or control shall offer, and the insurer shall sell, a good
driver discount policy to a good driver from an insurer within that
common ownership, management, or control group, which offers the
lowest rates for that coverage. This requirement applies
notwithstanding the underwriting guidelines of any of those insurers
or the underwriting guidelines of the common ownership, management,
or control group. Nothing in this subdivision shall require an
insurer to offer and sell a good driver discount policy that the
insurer would otherwise not be required to offer and sell in
accordance with paragraph (3) of subdivision (b) of Section 1861.02.
As used in this subdivision, "representative" means any person who
offers or prepares premium quotations on behalf of either an insurer
or any entity acting directly or indirectly on behalf of an insurer.
This subdivision shall not be construed to either permit a
representative to transact insurance, or to exempt a representative
who does transact insurance from the licensing provisions of this
code.
   (c) (1) Notwithstanding subdivision (b), insurers having common
ownership and operating in California under common control are not
required to sell good driver discount policies issued by other
insurers within the common ownership group if the commissioner
determines that the insurers satisfy each of the following
conditions:
   (A) The business operations of the insurers are independently
managed and directed.
   (B) The insurers do not jointly develop loss or expense statistics
or other data used in ratemaking, or in the preparation of rating
systems or rate filings.
   (C) The insurers do not jointly maintain or share loss or expense
statistics, or other data used in ratemaking or in the preparation of
rating systems or rate filings. This condition shall not apply if
the data is generally available to the industry through a
nonaffiliated third party and is obtained from that third party.
   (D) The insurers do not utilize each others' marketing, sales, or
underwriting data.
   (E) The insurers act independently of each other in determining,
filing, and applying base rates, factors, class plans, and
underwriting rules, and in the making of insurance policy forms.
   (F) The insurers' sales operations are separate.
   (G) The insurers' marketing operations are separate.
   (H) The insurers' policy service operations are separate.
   (2) Notwithstanding Senate Bill 1 of the 2003-04 Regular Session
(Chapter 241 of the Statutes of 2003), the federal Gramm-Leach-Bliley
Act (Public Law 106-102), and the federal Fair Credit Reporting Act
(15 U.S.C. Sec. 1681 and following), the sharing of information
between insurers as described in subparagraphs (A) to (H), inclusive,
of paragraph (1) shall be more restrictive than may otherwise be
permissible pursuant to those acts.
   (d) Except to the extent restricted by subdivision (c) or any
regulation adopted to implement subdivision (c), this section shall
not be interpreted to restrict the right of an insurer or holding
company to use aggregate data of its affiliated insurers having
common ownership or operating in California under common control.
   (e) Nothing in subdivision (c) is intended to amend, alter, or
supersede other sections of this code, or other laws of this state,
regarding any right of an insurer or holding company to use aggregate
data of its affiliated insurers having common ownership or operating
in California under common control.
   (f) The commissioner may adopt regulations to implement this
section.
   (g) An insurer that is required by this section or Section 1861.02
to offer and sell good driver discount policies to good drivers to
whom it did not sell those policies prior to November 8, 1988, due to
driving safety record or vehicle type may file and, upon the
approval of the commissioner, implement an interim rating plan for
those applicants until the rating plan required by subdivision (a) of
Section 1861.02 is adopted, provided that the insurer has timely
filed an automobile insurance rating plan in compliance with
subdivision (a) of Section 1861.02, and that plan has not been
approved. An insurer may file an interim plan prior to the operative
date of subdivision (b).
   The commissioner shall notify the public of any application by an
insurer for an interim rating plan. The public notice shall meet the
requirements of Section 1861.06. The application shall be deemed
approved 60 days after public notice unless (1) a consumer or his or
her representative requests a hearing within 45 days of public notice
and the commissioner grants the hearing, or determines not to grant
the hearing and issues written findings in support of that decision,
or (2) the commissioner on his or her own motion determines to hold a
hearing. If the commissioner grants a request for a hearing or
determines on his or her own motion to hold a hearing on the
application for an interim rating plan, but does not approve or
disapprove the proposed interim rating plan within the later of 30
days from the date the commissioner grants a request or determines to
hold the hearing or January 1, 1991, the interim rating plan may be
used until the time that the commissioner issues a decision.
   If an interim rate or proposed interim rate is greater than the
rate ultimately approved, the insurer shall refund to its applicable
policyholders, in proportion to the amount of premium paid by each,
the difference between the total amount earned and the amount to
which the insurer is entitled under the rate ultimately approved,
together with interest at the rate of 10 percent per year. In lieu of
a refund, the insurer may provide a credit to the policyholder if
the amount due is less than three dollars ($3).
   (h) Nothing contained in subdivision (b) or (c) shall be construed
to expand, limit, or modify the requirements of subdivision (b) of
Section 1861.02.
   (i) A violation of this section by any insurer shall subject it to
the penalties provided by Section 1861.14.

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