Insurance Rates And Regulation.

INSURANCE RATES AND REGULATION. INITIATIVE STATUTE. Regulates manner in which automobile and other property-casualty insurance rates are established. Requires rates be lowered at least 20 percent from November 8, 1987 levels, then frozen until November 8, 1989, unless insurance company is substantially threatened with insolvency. Requires public hearing and approval of Insurance Commissioner for rate changes. Requires automobile premiums be determined primarily by driving record and miles driven; requires discounts for good drivers. Provides for public disclosure of insurance company operations. Repeals certain exemptions of insurance companies from state civil rights and antitrust laws. Makes Insurance Commissioner elected officer. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local governments: Adoption will increase the Department of Insurance\u27s administrative costs by an unknown amount - potentially multimillion dollars - in 1988-89 (partial year) and by about $10 million annually thereafter. This cost will be payable from the Insurance Fund which is supported by annual fees levied on the insurance industry. Although the Board of Equalization is to adjust insurance tax rates for the period of November 1988 to January 1, 1991 to compensate for the loss of state revenues from the gross premiums tax paid by insurers, such adjustment will be based on estimates of what the revenues from gross premiums would have been in the absence of this measure. As there is room for error in such estimates, it is impossible to determine whether there will be any net gain or loss in state revenues during the transition period. The Board of Equalization may incur an unknown, probably minor, administrative cost for adjusting the gross premiums tax rate