Disapproval of rate, when, how

287.960. Disapproval of rate, when, how — procedures, director's powers — effect. — 1. A rate may be disapproved at any time subsequent to the effective date. A rate subject to prefiling under section 287.947 may also be disapproved before the effective date. A rate for a residual market in which insurers are mandated by law to participate shall not become effective until approved by the director, as provided in section 287.896.

2. The director may disapprove a rate for use in a competitive market if the director finds that the rate is inadequate or unfairly discriminatory under section 287.950. The director shall disapprove a rate for use in a noncompetitive market if he finds that the rate is excessive, inadequate or unfairly discriminatory under section 287.950.

3. If the director finds that a reasonable degree of competition does not exist in a market in accordance with section 287.942, the director may require that the insurers in that market file supporting information in support of existing rates. If the director believes that such rates may violate any of the requirements of sections 287.930 to 287.975, a hearing shall be called prior to any disapproval.

4. If the director believes that rates in a competitive market violate the inadequacy or unfair discrimination standard in section 287.950 or any other applicable requirement of this act*, the director may require that the insurers in that market file supporting information in support of existing rates. If after reviewing the supporting rate information, the director continues to believe that the rates may violate these requirements, a hearing shall be called prior to any disapproval.

5. The director may disapprove, without hearing, rates prefiled pursuant to section 287.947 that have not become effective; however, the insurer whose rates have been disapproved shall be given a hearing upon a written request made within thirty days after the disapproval order.

6. If the director disapproves a rate, the director shall issue an order specifying in what respects it fails to meet the requirements of sections 287.930 to 287.975 and stating when, within a reasonable period thereafter, such rate shall be discontinued for any policy issued or renewed after a date specified in the order. The order shall be issued subject to the requirements of section 287.962. Such order may include a provision for premium adjustment for the period after the effective date of the order for policies in effect on such date.

7. Whenever an insurer has no legally effective rates as a result of the director's disapproval of rates or other act, the director shall on request of the insurer specify interim rates for the insurer that are high enough to protect the interests of all parties and may order that a specified portion of the premiums be placed in an escrow account approved by him. When new rates become legally effective, the director shall order the escrowed funds or any overcharge in the interim rates to be distributed appropriately, except that refunds of less than ten dollars per policyholder shall not be required.