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An Act
ENROLLED HOUSE
BILL NO. 3781 By: Adams, Gise and Tedford of
the House
and
Reinhardt and Kirt of the
Senate
An Act relating to insurance; amending 36 O.S. 2021,
Sections 985, 987, and 989, which relate to the
Property and Casualty Competitive Loss Cost Rating
Act; removing certain prohibition on determining
certain rates to be competitive; allowing rate to be
determined excessive based on actuarial review;
requiring Insurance Commissioner to send certain
objection to insurer; removing certain filing
requirements; requiring certain insurer to file
certain information within certain time period;
providing certain requirements for certain filings to
become effective; requiring certain insurer to file
certain information if certain filing requires
certain supervision; allowing certain insurer to
request certain hearing; requiring Commissioner to
publish notice of certain rate increase on Insurance
Department website; allowing certain rate to be
determined to be excessive; removing certain
provisions allowing Commissioner to disapprove
certain rate only in certain situations; allowing
Commissioner to disapprove certain rates with certain
notice and opportunity for hearing; allowing
Commissioner to issue certain order after certain
rate goes into effect; removing certain requirements
that certain order not affect certain contract or
policy; removing certain provision allowing
Commissioner to issue certain order in certain
competitive market; updating statutory language;
updating statutory reference; and providing an
effective date.
ENR. H. B. NO. 3781 Page 2
SUBJECT: Insurance
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 36 O.S. 2021, Section 985, is
amended to read as follows:
Section 985. Ratemaking Standards.
A. A rate may not be excessive, inadequate or unfairly
discriminatory.
1. No rate in a competitive market may be determined to be
excessive. A rate in a noncompetitive market may be determined to
be excessive if it, based on actuarial review, the rate is likely to
produce a profit that is unreasonably high for the insurance
provided. The Insurance Commissioner shall send an objection to the
insurer and shall give the insurer the opportunity to respond and
provide additional supporting information prior to making a final
determination that the rate is excessive.
2. A rate may not be determined to be inadequate unless:
a. the rate is clearly insufficient to sustain projected
losses, expenses and special assessments, and
b. the rate is unreasonably low and use of the rate by
the insurer has tended or, if continued, will tend to
create a monopoly in the market.
3. Unfair discrimination may be determined to exist if, after
allowing for practical limitations, price differentials fail to
reflect equitably the differences in expected losses and expenses.
A rate may not be determined to be unfairly discriminatory because
different premiums result for policyholders with like loss exposures
but different expense levels, or like expenses but different loss
exposures, or if it averaged broadly among persons insured within a
group, franchise or blanket policy or a mass-marketed plan. No rate
in a competitive market shall be considered unfairly discriminatory
unless it classifies risk on the basis of race, color, creed, or
national origin, or religion.
ENR. H. B. NO. 3781 Page 3
B. In determining whether rates in a noncompetitive market are
excessive, inadequate, or unfairly discriminatory, due consideration
may be given to:
1. Past and prospective loss experience within and outside this
state, in accordance with accepted actuarial principles;
2. Conflagration and catastrophe hazards;
3. A reasonable margin for underwriting profit and
contingencies;
4. Loadings for leveling premium rates over time for dividends,
savings or unabsorbed premium deposits allowed or returned by
insurers to their policyholders, members or subscribers;
5. Past and prospective expenses both countrywide and those
specially applicable to this state; and
6. Provisions for special assessments; and to all other
relevant factors including judgment within and outside this state.
C. Risks may be grouped by classifications for the
establishment of rates and minimum premiums. Classification rates
may be modified to produce rates for individual risks in accordance
with rating plans which establish standards for measuring variations
in hazards or expense provisions, or both. Such standards may
measure any differences among risks that can be demonstrated to have
a probable effect upon losses or expenses. No risk classification,
however, may be based on race, color, creed, national origin, or the
religion of the insured.
D. The expense provisions included in the rates for use by an
insurer or group of insurers may differ from those of any other
insurer or group of insurers to reflect the requirements of the
operating methods of the insurer or group of insurers.
E. The rates may contain provision for contingencies and an
allowance permitting a reasonable profit. In determining the
reasonableness of the profit, consideration shall be given to the
investment income attributable to the line of insurance.
F. Risks may be classified in any way except that no risk may
be classified on the basis of race, color, creed, or national
origin, or religion of the insured.
ENR. H. B. NO. 3781 Page 4
SECTION 2. AMENDATORY 36 O.S. 2021, Section 987, is
amended to read as follows:
Section 987. Rate Filings.
A. In a competitive market, every insurer shall file with the
Insurance Commissioner all rates and, supplementary rate information
to be used in this state no later than thirty (30) days after the
effective date; provided, that the rates and supplementary rate
information need not be filed for commercial risks, which by general
custom are not written according to manual rules or rating plans.
B. In a noncompetitive market, every insurer shall file with
the Commissioner all rates, supplementary rate information and
supporting information at least thirty (30) days before the proposed
effective date. The Commissioner may give written notice, within
thirty (30) days of receipt of the filing, that the Commissioner
needs additional time, not to exceed thirty (30) days from the date
of the notice to consider the filing. Upon written application of
the insurer, the Commissioner may authorize rates to be effective
before the expiration of the waiting period or an extension thereof.
A filing shall be deemed to meet the requirements of the Property
and Casualty Competitive Loss Cost Rating Act and to become
effective unless disapproved pursuant to this title by the
Commissioner before the expiration of the waiting period or an
extension thereof.
In a noncompetitive market, the filing shall be deemed in
compliance with the filing provision of this section unless the
Commissioner informs the insurer within ten (10) days after receipt
of the filings as to what supplementary rate information or
supporting information is required to complete the filing.
C. Every authorized insurer shall file with the Commissioner,
except as to rates for those lines of insurance exempted from the
provisions of the Property and Casualty Competitive Loss Cost Rating
Act by the Commissioner under subsections E and F of this section
and except for those risks designated as special risks under Section
997 of this title, all rates, supplementary rate information and any
changes and amendments which it proposes to use. An insurer may
file its rates by either filing its final rates or by filing a
multiplier and, if applicable, an expense constant adjustment to be
applied to prospective loss costs that have been filed by an
advisory organization as permitted by this title. Such loss cost
ENR. H. B. NO. 3781 Page 5
multiplier filing and expense constant filings made by insurers
shall remain in effect until amended or withdrawn by the insurer.
Every filing shall state the effective date.
D. Under rules as may be adopted, the Commissioner may, by
written order, suspend or modify the requirement of filing as to any
kind of insurance, subdivision or combination thereof, or as to
classes of risks.
E. Notwithstanding any other provision of the Property and
Casualty Competitive Loss Cost Rating Act, upon the written consent
of the insured in a separate written document, a rate in excess of
that determined in accordance with the other provisions of the
Property and Casualty Competitive Loss Cost Rating Act may be used
on a specific risk.
F. A filing and any supporting information required to be filed
shall be open to public inspection once the filing becomes effective
except information marked confidential, trade secret, or proprietary
by the insurer or filer and except the filings of an advisory
organization which shall be open to public inspection upon the
received date of the rate, loss cost, or manual rule change. The
insurer or filer shall have the burden of asserting to the
Commissioner that a filing and supporting information are
confidential, upon the request of the Commissioner. The
Commissioner may disapprove of the insurer’s request for
confidential filing status, and supporting information for the rates
and for the risks that are to be written in this state, and any
additional information or documentation requested by the
Commissioner specific to this state. All rates, supplementary
information, and supporting information shall be filed thirty (30)
days prior to the effective date of such rates. A filing shall be
deemed to meet the requirements of this act and may become
effective:
1. Upon the expiration of the waiting period unless objected to
or disapproved by the Commissioner; or
2. Prior to expiration of the waiting period, upon application
by the insurer that has been approved by the Commissioner.
B. In a competitive market, if the Commissioner determines,
after a notice or by agreement, that an insurer’s rates require
closer supervision, the insurer shall file with the Commissioner all
rates, supplementary information, and supporting information
ENR. H. B. NO. 3781 Page 6
prescribed by the Commissioner at least sixty (60) days prior to the
effective date of such rates. The insurer may request a hearing
before the Commissioner or an independent hearing examiner to
determine the reasonableness of the Commissioner’s action by written
request upon the Commissioner within thirty (30) days of the notice
of the Commissioner requiring closer supervision of such insurer.
C. In a noncompetitive market, every insurer shall file with
the Commissioner all rates, supplementary information, and
supporting information for the rates and for the risks that are to
be written in this state, and any additional information or
documentation requested by the Commissioner specific to this state
for such market. All rates, supplementary information, and
supporting information shall be filed at least sixty (60) days prior
to the effective date of such rates. A filing shall be deemed to
meet the requirements of this act and may become effective:
1. Upon the expiration of the waiting period unless disapproved
by the Commissioner; or
2. Prior to expiration of the waiting period, upon application
by the insurer that has been approved by the Commissioner.
D. If a private passenger automobile, homeowner’s multi-peril,
or dwelling fire policy’s overall rate is increased pursuant to the
provisions of this section, the Commissioner shall publish notice of
such rate increase and overall percentage of such rate increase on
the Insurance Department’s website.
SECTION 3. AMENDATORY 36 O.S. 2021, Section 989, is
amended to read as follows:
Section 989. Improper Rates; Disapproval; Hearing.
A. Basis for disapproval.
1. The Insurance Commissioner shall disapprove a rate in a
competitive market only if the Commissioner finds, pursuant to
subsection B of this section, that the rate is excessive,
inadequate, or unfairly discriminatory pursuant to Section 985 of
this title.
2. The Commissioner may disapprove a rate for use in a
noncompetitive market only if the Commissioner finds, pursuant to
ENR. H. B. NO. 3781 Page 7
subsection B of this section, that the rate is excessive, inadequate
or unfairly discriminatory under this subsection.
B. Procedures for disapproval.
1. Prior to the expiration of a waiting period or an extension
thereof, made pursuant to subsection B of Section 987 of this title,
the Commissioner may disapprove, by written order, rates filed
pursuant to subsection B of Section 987 of this title with notice
and opportunity for a hearing. The order shall specify in what
respects the filing fails to meet the requirements of this act the
Property and Casualty Competitive Loss Cost Rating Act. Any insurer
whose rates are disapproved pursuant to this section shall be given
a hearing upon written request made within thirty (30) days of
disapproval.
2. If, at any time after the rate goes into effect, the
Commissioner finds that a rate applicable to insurance sold in a
noncompetitive market does not comply with the standards set forth
in Section 985 of this title, the Commissioner may, after a hearing
held upon not less than twenty (20) days’ written notice, issue an
order pursuant to subsection C of this section, disapproving such
rate. The hearing notice shall be sent to every insurer and
advisory organization that adopted the rate and shall specify the
matters to be considered at the hearing. The disapproval order
shall not affect any contract or policy made or issued prior to the
effective date set forth in the order.
3. If, at any time, the Commissioner finds that a rate
applicable to insurance sold in a competitive market is inadequate
or unfairly discriminatory under paragraph 2 or 3 of subsection A of
Section 985 of this title, the Commissioner may issue an order
pursuant to subsection C of this section disapproving the rate. The
order shall not affect any contract or policy made or issued prior
to the effective date set forth in the order.
C. Order of disapproval.
If the Commissioner disapproves a rate pursuant to subsection B
of this section, the Commissioner shall issue an order within thirty
(30) days of the close of the hearing specifying in what respects
the rate fails to meet the requirements of this act the Property and
Casualty Competitive Loss Cost Rating Act. The order shall state an
effective date no sooner than thirty (30) business days after the
date of the order when the use of the rate shall be discontinued.
ENR. H. B. NO. 3781 Page 8
This order shall not affect any policy made before the effective
date of the order.
D. Appeal of orders and establishment of reserves.
If an order of disapproval is appealed pursuant to Section 990
of this title, the insurer may implement the disapproved rate upon
notification to the court, in which case any excess of the
disapproved rate over a rate previously in effect shall be placed in
a reserve established by the insurer. The court shall have control
over the disbursement of funds from such reserve. The funds shall
be distributed as determined by the court in its final order except
that de minimus minimis refunds to policyholders shall not be
required.
E. All determinations made by the Commissioner under this
section shall be on the basis of findings of fact and conclusions of
law.
SECTION 4. This act shall become effective July 1, 2027.
ENR. H. B. NO. 3781 Page 9
Passed the House of Representatives the 6th day of May, 2026.
Presiding Officer of the House
of Representatives
Passed the Senate the 4th day of May, 2026.
Presiding Officer of the Senate
OFFICE OF THE GOVERNOR
Received by the Office of the Governor this ____________________
day of ___________________, 20_______, at _______ o'clock _______ M.
By: _________________________________
Approved by the Governor of the State of Oklahoma this _________
day of ___________________, 20_______, at _______ o'clock _______ M.
_________________________________
Governor of the State of Oklahoma
OFFICE OF THE SECRETARY OF STATE
Received by the Office of the Secretary of State this __________
day of ___________________, 20_______, at _______ o'clock _______ M.
By: _________________________________