Effective October 1, 2010, the New York Insurance Department (the “Department”) has authority to review health insurance rate requests before they go into effect.   Before this “prior approval” authority went into effect, health insurers could simply increase their rates by filing with the Department and notifying customers of the change under a system known as “file and use.”  Now, insurers must notify their customers that they are asking for a rate increase from the Department.  Consumers then have a chance to send comments to the Department.  In addition, any increase granted has to reflect the recommendation of the Department’s actuaries.

The Department anticipates that the prior approval system will have an impact of a 2-3% reduction in rate increases requested.

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