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STATE OF OKLAHOMA
2nd Session of the 60th Legislature (2026)
HOUSE BILL 3646 By: Stinson and Fugate
AS INTRODUCED
An Act relating to insurance; amending 36 O.S. 2021,
Section 982, which relates to definitions used in the
Property and Casualty Competitive Loss Cost Rating
Act; providing definitions; amending 36 O.S. 2021,
Section 986, which relates to rate administration;
changing process for rate making; directing insurers
to file rates, applicable rating manuals,
supplementary rating information and other required
information with the Insurance Commissioner;
permitting use of rate on and after date filed;
directing the Insurance Commissioner to determine
information required for filing; directing the
Insurance Commissioner to develop process for
requesting supplementary rating information and
supporting information; providing exemptions;
directing Insurance Commissioner to consider factors;
directing the Insurance Commissioner to disapprove
rates that do not comply with act; clarifying rates
that have not been disapproved before thirty days are
not disapproved without good-cause extension;
directing the Insurance Commissioner to issue an
order when rates are disapproved; permitting hearings
for insurer that files rate that is disapproved;
directing the Insurance Department to track, compile,
and analyze factors that contribute to disapproval of
rates; authorizing the Insurance Department to
request additional information; clarifying date of
request for additional information; establishing that
the Insurance Commissioner may only disapprove a rate
that is in effect after hearing; permitting insureds
who are aggrieved with respect to any filing in
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effect to apply to the Insurance Commissioner for
hearing; directing the Insurance Commissioner to hold
hearing; authorizing the Insurance Commissioner to
issue order after hearing; authorizing the Insurance
Commissioner to require an insurer to file for
approval of all rates, supplementary rating
information, and any supporting information if
certain determinations are made; prohibiting insurers
from using a rate until it has been filed; permitting
use of certain rates without prior approval;
establishing exceptions to filing requirements;
repealing 36 O.S. 2021, Section 984, which relates to
presumption of competitive market; repealing 36 O.S.
2021, Section 987, which relates to rate filings;
providing for codification; and providing an
effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 36 O.S. 2021, Section 982, is
amended to read as follows:
Section 982. As used in the Property and Casualty Competitive
Loss Cost Rating Act:
1. "Accepted actuarial standards" means the standards adopted
by the Casualty Actuarial Society Statement of Principles regarding
property and casualty ratemaking or the Standards of Practice
adopted by the Actuarial Standards Board;
2. "Advisory organization" means any corporation,
unincorporated association, partnership or person, whether located
inside or outside this state, that is licensed in accordance with
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Section 1140 of this title and which assists insurers in ratemaking-
related activities such as enumerated in Section 1142 of this title;
3. "Classification system" or "classification" means the
process of grouping risks with similar risk characteristics so that
differences in costs may be recognized;
4. "Commercial risk" means any kind of risk that is not a
personal risk;
5. "Commissioner" means the Commissioner of Insurance of this
state;
6. "Competitive market" means a market which has not been found
to be noncompetitive pursuant to Section 984 of this title;
7. "Developed losses" means losses, including loss adjustment
expenses, adjusted using accepted actuarial standards, to eliminate
the effect of differences between current payment or reserve
estimates and those which are anticipated to provide actual ultimate
loss, including loss adjustment expense payments;
8. "Expenses" means that portion of a rate attributable to
acquisition, field supervision, collection expenses, general
expenses, taxes, licenses and fees;
9. "Experience rating" means a rating procedure utilizing past
insurance experience of the individual policyholder to forecast
future losses by measuring the policyholder's loss experience
against the loss experience of policyholders in the same
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classification to produce a prospective premium credit, debit or
unity modification;
10. "Filer" means an insurer that files rates, prospective loss
costs, or supplementary rating information under this act;
11. "Joint underwriting" means a voluntary arrangement
established to provide insurance coverage for a risk pursuant to
which two or more insurers jointly contract with the insured at a
price and under policy terms agreed upon between the insurers;
11. 12. "Loss adjustment expense" means the expenses incurred
by the insurer in the course of settling claims;
12. 13. "Market" means the statewide interaction between buyers
and sellers of identical or readily substitutable products that
provide insurance protection of identifiable perils to buyers;
13. 14. "Mass marketed plan" means a method of selling
property-liability insurance wherein the insurance is offered to
employees of particular employers or to members of particular
associations or organizations or to persons grouped in other ways,
and the employer or association or other organization has agreed to,
or otherwise affiliated itself with, the sale of such insurance to
its employees or members;
14. 15. "Noncompetitive market" means a market for which there
is a ruling in effect pursuant to Section 984 of this title that a
reasonable degree of competition does not exist;
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15. 16. "Personal risk" means homeowners, tenants, private
passenger nonfleet automobiles, manufactured homes and other
property and casualty insurance for personal, family or household
needs, including any property and casualty insurance that is
otherwise intended for noncommercial coverage;
16. 17. "Pool" means a voluntary arrangement, established on an
ongoing basis, pursuant to which two or more insurers participate in
the sharing of risks on a predetermined basis. The pool may operate
through an association, syndicate or other pooling agreement;
17. 18. "Prospective loss costs" means historical aggregate
losses and may include loss adjustment expenses, including all
assessments that are loss based, projected through development to
their ultimate value and through trending to a future point in time;
18. 19. "Pure premium rate" means that portion of the rate
which represents the loss costs per unit of exposure including loss
adjustment expense;
19. 20. "Rate" or "rates" means that cost of insurance per
exposure unit whether expressed as a single number or as a
prospective loss cost with an adjustment to account for the
treatment of expenses, profit, and individual insurer variation in
loss experience, prior to any application of individual risk
variations based on loss or expense considerations, and does not
include minimum premium;
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21. "Rating manual" means a publication or schedule that lists
rules, classifications, territory codes and descriptions, rates,
premiums, and other similar information used by an insurer to
determine the applicable premium charged an insured;
20. 22. "Residual market mechanism" means an arrangement,
either voluntary or mandated by law, involving participation by
insurers in the equitable apportionment among them of insurance
which may be afforded applicants who are unable to obtain insurance
through ordinary methods;
21. 23. "Special assessments" means guaranty fund assessments,
Special Indemnity Fund assessments, Vocational Rehabilitation Fund
assessments, and other similar assessments. Special assessments
shall not be considered as either expenses or losses;
22. 24. "Statistical plan" means the plan, system or
arrangement used in collecting data;
23. 25. "Supplementary rating information" means any manual or
plan of rates, classification, rating schedule, minimum premium,
policy fee rating rule and any other information needed to determine
the applicable premium in effect or to be in effect. This includes,
rating plans, territory codes and descriptions and rules which
include factors or relativities such as increased limits factors,
deductible discounts or relativities, classification relativities or
similar factors used to determine the rate in effect or to be in
effect;
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24. 26. "Supporting information" means the experience and
judgment of the filer and the experience or data of other insurers
or advisory organizations relied upon by the filer, the
interpretation of any other data relied upon by the filer,
descriptions of methods used in making the rates and any other
information required by the Commissioner to be filed; and
25. 27. "Trending" means any procedure for projecting losses to
the average date of loss, or premiums or exposures to the average
date of writing, for the period during which the policies are to be
effective.
SECTION 2. AMENDATORY 36 O.S. 2021, Section 986, is
amended to read as follows:
Section 986. A. In only those markets found to be
noncompetitive pursuant to Section 984 of this title, insurers and
advisory organizations shall file with the Commissioner and the
Commissioner shall review reasonable rules and plans for recording
and reporting their rates, loss and expense experience and other
information determined by the Commissioner to be necessary or
appropriate for the administration of the Property and Casualty
Competitive Loss Cost Rating Act. The Commissioner may designate
one or more advisory organizations or other agencies to assist in
gathering such experience and making compilation thereof.
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B. Reasonable rules and plans may be promulgated by the
Insurance Commissioner for the exchange of data necessary for the
development and application of rating plans.
C. B. In order to further uniform administration of rate
regulatory laws, the Commissioner and every insurer and advisory
organization may exchange information and experience data with
insurance supervisory officials, insurers and advisory organizations
in other states and may consult with them with respect to the
application of rating systems.
D. C. Cooperation among advisory organizations or among
advisory organizations and insurers in ratemaking or in other
matters within the scope of the Property and Casualty Competitive
Loss Cost Rating Act is authorized. The Commissioner may review
such cooperative activities and practices, and if, after a hearing,
any such activity or practice is found to violate the provisions of
the Property and Casualty Competitive Loss Cost Rating Act, a
written order may be issued specifying that such activity or
practice violates the provisions of this act and requiring the
discontinuance of such activity.
SECTION 3. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 987.1 of Title 36, unless there
is created a duplication in numbering, reads as follows:
A. Each insurer shall file with the Insurance Commissioner all
rates, applicable rating manuals, supplementary rating information,
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and additional information as required by the Insurance
Commissioner. An insurer may use a rate filed under this act on and
after the date the rate is filed.
B. The Insurance Commissioner by rule shall:
1. Determine the information required to be included in the
filing, including:
a. categories of supporting information and supplementary
rating information,
b. statistics or other information to support the rates
to be used by the insurer,
c. information necessary to evidence that the computation
of the rate does not include disallowed expenses for
personal lines, and
d. information concerning policy fees, service fees, and
other fees that are charged or collected by the
insurer; and
2. Prescribe the process through which the Insurance Department
requests supplementary rating information and supporting information
under this act, including:
a. the number of times the Department may make a request
for information, and
b. the types of information the Department may request
when reviewing a rate filing.
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C. This section does not apply to rates for use with an insured
that has:
1. Total insured property values of Five Million Dollars
($5,000,000.00) or more;
2. Total annual gross revenues of Ten Million Dollars
($10,000,000.00) or more; or
3. A total premium of Twenty-five Thousand Dollars ($25,000.00)
or more for property insurance, Twenty-five Thousand Dollars
($25,000.00) or more for general liability insurance, or Fifty
Thousand Dollars ($50,000.00) or more for multi-peril insurance.
D. The Insurance Commissioner shall consider the applicable
factors in Section 902.2 of this title when reviewing filings.
SECTION 4. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 987.2 of Title 36, unless there
is created a duplication in numbering, reads as follows:
In determining filing requirements under Section 3 of this act
for an insurer with less than five percent (5%) of the market, the
Insurance Commissioner shall consider insurer and market-specific
attributes, as applicable. The Insurance Commissioner shall
determine filing requirements for those insurers accordingly to
accommodate premium volume and loss experience, targeted markets,
limitations on coverage, and any potential barriers to market entry
or growth.
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SECTION 5. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 987.3 of Title 36, unless there
is created a duplication in numbering, reads as follows:
A. Not later than the earlier of the date the rate takes effect
or thirty (30) days after the date a rate is filed with the
Insurance Department under Section 3 of this act, the Insurance
Commissioner shall disapprove the rate if the Insurance Commissioner
determines that the rate does not comply with the requirements of
this act.
B. Except as provided by subsection C of this section, if a
rate has not been disapproved by the Insurance Commissioner before
the expiration of the thirty-day period described by subsection A of
this section, the rate is not considered disapproved under this
section.
C. For good cause, the Insurance Commissioner may, on the
expiration of the thirty-day period described by subsection A of
this section, extend the period for disapproval of a rate for one
additional thirty-day period. The Insurance Commissioner and the
insurer may not by agreement extend the thirty-day period described
by subsection A of this section or this subsection.
D. If the Insurance Commissioner disapproves a rate under this
section, the Insurance Commissioner shall issue an order specifying
in what respects the rate fails to meet the requirements of this
act.
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E. An insurer that files a rate that is disapproved under this
section is entitled to a hearing upon written request made to the
Insurance Commissioner not later than thirty (30) days after the
date the order disapproving the rate takes effect.
F. The Insurance Department shall track, compile, and routinely
analyze the factors that contribute to the disapproval of rates
under this section.
SECTION 6. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 987.4 of Title 36, unless there
is created a duplication in numbering, reads as follows:
A. If the Insurance Department determines that the information
filed by an insurer under this act is incomplete or otherwise
deficient, the Insurance Department may request additional
information from the insurer.
B. If the Insurance Department requests additional information
from the insurer during the thirty-day period described by
subsection A of Section 5 of this act or under a second thirty-day
period described by subsection C of Section 5 of this act, as
applicable, the time between the date the Insurance Department
submits the request to the insurer and the date the Insurance
Department receives the information requested is not included in the
computation of the first thirty-day period or the second thirty-day
period, as applicable.
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C. For purposes of this section, the date of the Insurance
Department's submission of a request for additional information is
the earlier of:
1. The date of the Insurance Department's electronic mailing or
documented telephone call relating to the request for additional
information; or
2. The postmarked date on the Insurance Department's letter
relating to the request for additional information.
D. The Insurance Department shall track, compile, and routinely
analyze the volume and content of requests for additional
information made under this section to ensure that all requests for
additional information are fair and reasonable.
SECTION 7. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 987.5 of Title 36, unless there
is created a duplication in numbering, reads as follows:
A. The Insurance Commissioner may disapprove a rate that is in
effect only after a hearing. The Insurance Commissioner shall
provide the filer at least twenty (20) days' written notice.
B. The Insurance Commissioner must issue an order disapproving
a rate under subsection A of this section not later than fifteen
(15) days after the close of the hearing. The order must:
1. Specify in what respects the rate fails to meet the
requirements of Title 36 of the Oklahoma Statutes or rules made
pursuant to this act; and
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2. State the date on which further use of the rate is
prohibited, which may not be earlier than forty-five (45) days or
later than one (1) year after the close of the hearing under this
section.
SECTION 8. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 987.6 of Title 36, unless there
is created a duplication in numbering, reads as follows:
A. An insured who is aggrieved with respect to any filing under
this act that is in effect, may apply to the Insurance Commissioner
in writing for a hearing on the filing. The application must
specify the grounds for the applicant's grievance.
B. The Insurance Commissioner shall hold a hearing on an
application filed under subsection A of this section not later than
thirty (30) days after the date the Insurance Commissioner receives
the application if the Insurance Commissioner determines that:
1. The application is made in good faith;
2. The applicant would be aggrieved as alleged if the grounds
specified in the application were established; and
3. The grounds specified in the application otherwise justify
holding the hearing.
C. The Insurance Commissioner shall provide written notice of a
hearing under subsection B of this section to the applicant and each
insurer that made the filing not later than ten (10) days before the
date of the hearing.
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D. If, after the hearing, the Insurance Commissioner determines
that the filing does not meet the requirements of this act or Title
36 of the Oklahoma Statutes or rule made pursuant to this act, the
Insurance Commissioner shall issue an order:
1. Specifying in what respects the filing fails to meet those
requirements; and
2. Stating the date on which the filing is no longer in effect,
which must be within a reasonable period after the order date.
E. The Insurance Commissioner shall send copies of the order
issued under subsection D of this section to the applicant and each
affected insurer.
SECTION 9. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 987.7 of Title 36, unless there
is created a duplication in numbering, reads as follows:
A. The Insurance Commissioner by order may require an insurer
to file with the Insurance Department for the Insurance
Commissioner's approval all rates, supplementary rating information,
and any supporting information in accordance with this act if the
Insurance Commissioner determines that:
1. The insurer's rates require supervision because of the
insurer's financial condition or rating practices; or
2. A statewide insurance emergency exists.
B. If an insurer files a petition for judicial review of an
order disapproving a rate under this act, the insurer must use the
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rates in effect for the insurer at the time the petition is filed
and may not file and use any higher rate for the same line of
insurance subject to this act before the matter subject to judicial
review is finally resolved unless the insurer, in accordance with
this act, files the new rate with the Insurance Department, along
with any applicable supplementary rating information and supporting
information, and obtains the Insurance Commissioner's approval of
the rate.
C. From the date of the filing of the rate with the Insurance
Department to the effective date of the new rate, the insurer's
previously filed rate that is in effect on the date of the filing
remains in effect.
D. The Insurance Commissioner may require an insurer to file
the insurer's rates under this section until the Insurance
Commissioner determines that the conditions described by subsection
A of this section no longer exist.
E. If the Insurance Commissioner requires an insurer to file
the insurer's rates under this section, the Insurance Commissioner
shall periodically assess whether the conditions described by
subsection A of this section continue to exist. If the Insurance
Commissioner determines that the conditions no longer exist, the
Insurance Commissioner shall issue an order excusing the insurer
from filing the insurer's rates under this section.
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F. For purposes of this section, a rate is filed with the
Insurance Department on the date the Department receives the rate
filing.
G. If the Insurance Commissioner requires an insurer to file
the insurer's rates under this section, the Insurance Commissioner
shall issue an order specifying the Insurance Commissioner's reasons
for requiring the rate filing and explaining any steps the insurer
must take and any conditions the insurer must meet in order to be
excused from filing the insurer's rates under this section. An
affected insurer is entitled to a hearing upon written request made
to the Insurance Commissioner not later than thirty (30) days after
the date the order is issued.
H. The Insurance Commissioner by rule shall define:
1. The financial conditions and rating practices that may
subject an insurer to this section under paragraph 1 of subsection A
of this section; and
2. The process by which the Insurance Commissioner determines
that a statewide insurance emergency exists under paragraph 2 of
subsection A of this section.
SECTION 10. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 987.8 of Title 36, unless there
is created a duplication in numbering, reads as follows:
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A. An insurer subject to this act may not use a rate until the
rate has been filed with the Insurance Department and approved by
the Insurance Commissioner in accordance with this act.
B. Notwithstanding subsection A of this section, after a rate
filing is approved under this act, an insurer, without prior
approval of the Insurance Commissioner, may use any rate
subsequently filed by the insurer if the subsequently filed rate
does not exceed the lesser of:
1. One hundred seven and one-half percent (107.5%) of the rate
approved by the Insurance Commissioner; or
2. One hundred ten percent (110%) of any rate used by the
insurer in the previous twelve-month period.
C. Filed rates under subsection B of this section take effect
on the date specified by the insurer.
SECTION 11. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 987.9 of Title 36, unless there
is created a duplication in numbering, reads as follows:
A. Except as provided by subsections B, C, and D of this
section, an insurer is exempt from the rate filing and approval
requirements of this act if the insurer, during the calendar year
preceding the date filing is otherwise required under Title 36 of
the Oklahoma Statutes, issued residential property insurance
policies in this state that accounted for less than two percent (2%)
of the total amount of premiums collected by insurers for
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residential property insurance policies issued in this state, more
than fifty percent (50%) of which cover property valued at less than
One Hundred Thousand Dollars ($100,000.00).
B. If an insurer described by subsection A of this section is a
member of an affiliated insurance group, this section applies to the
insurer only if the total aggregate premium collected by the group
accounts for less than two percent (2%) of the total amount of
premiums collected by insurers for residential property insurance
policies issued in this state.
C. An insurer described by subsection A of this section that
proposes to increase the premium rates charged policyholders for a
residential property insurance product by an amount that is ten
percent (10%) or more over the amount the insurer charged
policyholders for the same or an equivalent residential property
insurance product during the preceding calendar year must file the
insurer's proposed rates in accordance with this act and, if
applicable, obtain approval of the proposed rates.
D. An insurer described by subsection A of this section that
increases the premium rates charged policyholders for a residential
property insurance product by an annual average amount of eight
percent (8%) or greater for three (3) consecutive calendar years
must file the insurer's proposed rates in accordance with this act
in the calendar year following the three (3) consecutive years and,
if applicable, obtain approval of the proposed rates. In
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calculating the three (3) consecutive calendar years' average
premium increases, an insurer is not required to consider a year in
which there is a weather-related catastrophe or other major natural
disaster that requires the Commissioner to extend the claim-handling
deadlines.
SECTION 12. REPEALER 36 O.S. 2021, Section 984, is
hereby repealed.
SECTION 13. REPEALER 36 O.S. 2021, Section 987, is
hereby repealed.
SECTION 14. This act shall become effective November 1, 2026.
60-2-14604 MJ 01/14/26