The New York State Department of Financial Services has proposed requiring insurers to obtain express prior approval before making any upward rate change for private passenger auto insurance. The measure implements Fiscal Year 2027 budget reforms intended to reduce premiums by addressing insurance fraud and litigation costs, while strengthening scrutiny and transparency around rate increases. Under current rules, insurers may implement up to two overall average rate increases without prior approval when their cumulative effect is within 5%. The proposal would remove that allowance and require independent department review of every increase. Insurers would also have to notify policyholders of rate decreases implemented without prior approval as a result of the budget reforms and explain the reasons for those changes, building on earlier guidance requiring expected reform savings to be reflected in pending and future rate filings. The law and regulation will take effect Nov. 27, 2026.
2026-09-09New York State Department of Financial Services
New York State Department of Financial Services proposes prior approval for all private passenger auto rate increases
The New York State Department of Financial Services has proposed requiring prior approval for every private passenger auto insurance rate increase, replacing an allowance for limited increases without review. Insurers would also have to explain qualifying rate decreases tied to Fiscal Year 2027 reforms to policyholders. The law and regulation will take effect Nov. 27, 2026.