Public has a right to know how insurers choose who is eligible for coverage

Public has a right to know how insurers choose who is eligible for coverage

(source: State of CA- Dept. of Insurance

Transparency of underwriting rules lets consumers know if they’re being treated fairly by their insurers.

SACRAMENTO, Calif. — Today, the general counsel for the California Department of Insurance issued a legal opinion, that under insurance reform law Proposition 103, insurers’ underwriting rules submitted with a rate application must be made available for public inspection.

Underwriting rules are the criteria insurance companies use to determine whom to insure, what they will insure, and whether to renew an existing policy.

“Consumers and insurers alike benefit from transparency,” said Insurance Commissioner Dave Jones. “Consumers are able to better understand how insurance companies decide who to insure and who to renew.”

Voters passed Proposition 103 in 1988 to lower insurance rates and encourage the public to participate in the rate-setting process. Insurance companies seeking a rate increase or decrease must submit public rate applications to the commissioner including their underwriting rules.

In the past, certain insurers have contended their underwriting rules are confidential or proprietary information and not subject to public disclosure.

In response to a request by a member of the public, the general counsel analyzed the issue and determined Proposition 103 does not allow this practice.

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