The West Virginia Office of the Insurance Commissioner (OIC) has recently released Insurance Bulletin No. 26-03 regarding the use of “price optimization” to rate insurance policies, applicable to all property and casualty insurers issuing personal lines policies. The key highlights are as follows:
- Price optimization refers to the practice of varying rates based on factors other than risk so that the company can charge the highest price that policyholders will tolerate before shopping for a new policy, which may result in two policyholders with the same loss history and risk profile receiving different premium increases.
- The use of price optimization results in rates that are unfairly discriminatory and in violation of West Virginia law.
- Judgmental adjustments to a rate may not be based on non-risk-related policyholder characteristics.
- Insurers must classify risks according to cost-based considerations of insurance losses and expenses, and that they must disclose those considerations fully in their rate filings.
Please note that this bulletin became effective upon issuance on October 9, 2026.
For any questions related to the above referenced bulletin in West Virginia, please contact Westmont Associates!