Calif. Court Strikes Down Persistency Discount Law

September 30, 2005

  • October 4, 2005 at 7:11 am
    California Insurer says:
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    Interested in a convincing explanation as to how the above ruling is consistent with the following section of the California Insurance Code:

    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.

    In my view, the court has said that it is okay to charge excessive rates to people with a continuous history of being insured who exercise their choice to shop for a new company.

  • November 10, 2005 at 12:02 pm
    CA Insured says:
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    Basically this new ruling states that those drivers who have been abiding by the law and continuously been paying insurance premiums now get penalized so that those who have been uninsured can get a better price.
    If there really are people who can\’t afford insurance, maybe the Low Cost Automobile Insurance Program should be expanded, rather than pass the price increase to responsible drivers.



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