When it comes to auto or homeowners insurance in Oklahoma, the rates insurers use to determine your premiums must be filed with the Oklahoma Insurance Department (OID).

Understanding Rates and Premiums

• Rate: The cost “per unit of exposure.” For personal auto insurance, a unit of exposure is one car insured for one year. For homeowners insurance, it’s one house insured for one year.
• Premium: The total dollar amount you pay for your policy.

Rate Filing Requirements

Insurers must file their rates, rating factors, and other costs with the OID, but they can start using new rates before the filing. The requirement is that all rates and supplementary information must be filed “no later than 30 days after the effective date.” This is known as a Use and File rating law.

Under current laws, established between 2004 and 2007, the OID does not have the authority to disapprove rates or rate changes except in very specific circumstances.

Competitive Market Environment

Oklahoma’s insurance markets for auto and homeowners are considered competitive, with about 100 to 115 insurers operating in each market. This competition means:

• Rates and premiums vary significantly between insurers.
• No small number of insurers dominate market shares.
• The market itself regulates proper rate levels to encourage competition and provide consumer choice.

Rate Approval and Disapproval

In a competitive market, no rate may be deemed excessive. The OID cannot disapprove a rate for being too high. However, the OID can disapprove a rate if it is:

• Unfairly discriminatory: Only if it classifies risks based on race, color, creed, or national origin.
• Inadequate: If the rate is unreasonably low and could create a monopoly.

Supporting Information

While insurers must file their rates and supplementary information with the OID, they are not required to file supporting information or actuarial justifications. Most insurers do provide this information, and the OID reviews it to ensure that the rates align with the actuarial data.