Court OKs Agreement on Car Insurance Rate Freeze

A Sacramento judge has approved an agreement among state Insurance Commissioner Roxani Gillespie, more than 200 insurance companies and leading consumer groups under which the companies accept Gillespie’s freeze on auto insurance rates with Gillespie canceling her order to the companies to stop setting prices based on where its policyholders live.

The agreement, approved by Superior Court Judge Cecily Bond, also commits the companies to supporting a hearing process under which an official interpretation of new Proposition 103 rules for pricing auto insurance, based primarily on a driver’s record, annual miles driven and years of driving experience, will be developed by Nov. 30.

The Insurance Department hearings are scheduled to begin Oct. 30, with both consumer groups and insurers represented. Gillespie has estimated the sessions will take up to a month.

Both Proposition 103 author Harvey Rosenfield and Gillespie hailed the Thursday’s agreement as opening the way to resolving the key issues of implementing Proposition 103. A second round of planned hearings will set policies for implementing some of the rate rollbacks called for by the initiative.