What does Prop 103 Mean to you as a consumer?

Well to answer that question, you first must know what Prop 103 is.

Below is the information provided by the Dept of Insurance.

Proposition 103

Prop 103 was passed by California voters on November 8, 1988.
California is one of the fewer than a dozen prior-approval states in the nation.
Prop 103 was implemented by then Commissioner Garamendi.
Prior to Prop 103, California Department of Insurance (CDI) operated under McBride-Grunsky Insurance Regulatory Act. This act did not require insurance companies to file rates for approval except for health and life.
Prop 103 was authorized by the consumer and taxpayers union.
Rate Regulation and Prior Approval of Filings

Beginning November 8, 1989, property and casualty insurance rates had to be approved by the insurance commissioner prior to use.
Rate Filing Bureaus were created in the Rate Regulation Division on December 16, 1988 to implement provisions of Prop 103.
CDI has prior approval authority of insurer rates, not underwriting guidelines; however, CDI does review underwriting for compliance with existing regulations, e.g., for discriminatory or unfair practices.
In 2002, the Rate Regulation Division processed 7,770 filings.
Lines Regulated by Proposition 103

The following lines of insurance are regulated by Prop 103: Personal automobile, dwelling fire, earthquake, homeowners, inland marine, and umbrella, commercial aircraft, boiler and machinery, burglary and theft, business owners, earthquake, farm owners, some fidelity, fire, glass, , medical malpractice, miscellaneous, multi-peril, other liability, professional liability, special multi-peril, and coverage under the United States Longshoremen's & Harbor Workers' Compensation.
Act Rollback Provisions

Prop 103 required every insurer to reduce its rates at least 20% less than those rates that were in effect on November 8, 1987.
Since 1989, the Rate Regulation Division has been responsible for negotiating with insurance companies to meet their rollback obligations.
Public Notice

Prop 103 states that public notice must be given for all rate applications.
Deemer Provision

Prop 103 states that an application is deemed approved 60 days after public notice is given unless:
within 45 days of public notice, a consumer or consumer group requests and is granted a hearing or the commissioner determines not to grant the hearing and issues written support of that decision, or
the commissioner determines to hold a hearing, or
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.
Public Viewing Rooms

Prop 103 states that all rating information provided to the commissioner must be available for public inspection.
Advisory Organizations

Prop 103 eliminated rating organizations.
Advisory organizations which still exist must file loss costs and forms with Rate Regulation Division.
Personal Automobile Rating Factors

Prop 103 requires personal automobile insurance rates be determined using the following primary factors: insured's driving safety record, number of miles driven annually, and number of years of driving experience insured has had, among others.
Good Driver Discount Provision

Prop 103 states that an insurer cannot refuse to write an applicant who qualifies for a good driver discount.
A good driver discount should be at least 20% below the rate the insured would otherwise have charged for the same coverage.
A good driver discount applies if all of the following criteria is met: licensed driver has not had more than one violation point during the past three years, was not the driver of motor vehicle that involved an accident which resulted in death or in total loss of damage exceeding $750, and was not principally at fault.

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Last Revised - June 20, 2008