A California auto insurer files a rate application seeking a 9% increase, attaches a variance request to deviate from the standard generic determination of investment income under 10 CCR § 2644.20, and is met with an intervenor petition. Under Cal. Ins. Code §§ 1861.05 and 1861.10 and CDI rate-application regulations, which is the MOST accurate description of what happens next?

Why this is the answer

California Code of Regulations Title 10 § 2646.4 establishes that auto rate changes of 7% or more (and homeowners changes of 15% or more) trigger a mandatory hearing if a timely consumer petition is filed under § 1861.05. Variance requests are explicitly anticipated by CDI's rate-application regulations (10 CCR §§ 2644.27 and 2645) and are analyzed on the record — they are not prohibited. Any person may petition to participate as an intervenor under § 1861.10 and, if their participation 'substantially contributes' to a Commissioner decision, may recover reasonable fees from the insurer. The 10% threshold in option (a) is wrong, variance prohibition (b) is contrary to the regulations, and (c) ignores the public-participation design of Prop 103.