Allstate 2022 auto insurance rate filings brings about changes to Georgia law

Auto insurance - Georgia Law changes

The filing rules in the state will be changing under a new law driven forward by the insurer last year.

Georgia Governor Brian Kemp recently signed a bill into law, providing the insurance commissioner in the state with the authority to review all auto insurance rate filings before they can become effective.

The new law will become effective July 1, 2023, and preserves existing authority while making additions.

Georgia House Bill 221 goes into effect July 1, 2023. It will maintain the approval powers the commissioner already held over mandatory minimum auto insurance rate filings in the state. That said, it also provides the commissioner with 60 days from the filing in which to review it and all other filings made by the insurer in question.

Auto insurance - Filing system

The new law was written for the purpose of putting to an end the file-and-use provision in the state. That had previously made it possible for rates to become immediately effective as soon as an insurer filed them.

According to the Georgia Insurance and Safety Fire Commissioner John F. King, the file-and-use provision was a loophole that gave insurers the power to substantially increase rates. This was the case with Allstate, which hiked its rates for drivers by an average of 40 percent in 2022.

The commissioner now has more authority over auto insurance rate filings made in the state.

“Heading into this legislative session, we made it a priority to push for legislation giving our office more authority over car insurance rate filings that impact hardworking Georgia families,” said King in a news release about the new law. “This legislation will allow us to review all filings before they go into effect — while at the same time guaranteeing speed to market, which is critical for the industry.”

The filings Allstate made last year were seen as a notable propellent to move the legislation forward, according to King. In August 2022, he started speaking with legislators in the state about making changes to Georgia laws to provide the insurance department with greater oversight over the auto insurance rate filings.

“I am angry and disappointed that Allstate has chosen to exploit a loophole in state law to implement such a substantial increase in costs on hardworking Georgians when families are already struggling with historic inflation everywhere from the gas pump to the grocery store,” said King.

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