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PLCaliforniamedium

Under California's Prop 103 prior-approval system, which statement BEST describes the rate-hearing and intervenor process under Cal. Ins. Code §§ 1861.05 and 1861.10?

AThe Commissioner sets all rates unilaterally by administrative fiat; consumers and ratepayers have no formal standing, no petition right, and no ability to participate in any rate proceeding
BInsurers may file and implement rates immediately upon submission under a use-and-file regime, and the Commissioner reviews each filing only after the fact through post-hoc market analysis
COnly the Attorney General, acting on behalf of the People of California, has authority to challenge or object to a proposed rate before it becomes effective
Insurers must get prior approval; the Commissioner may hold a hearing, and a qualified consumer intervenor may participate and be compensated for a substantial contribution

Why this is the answer

Section 1861.05 requires every California property/casualty insurer to obtain prior approval of rate changes from the Commissioner; no rate may take effect that is excessive, inadequate, or unfairly discriminatory. If a hearing is required (automatically for residential property and auto rate changes of 7% or more, or upon timely consumer petition), Section 1861.10 grants standing to any person to initiate or intervene in any proceeding and to recover reasonable advocacy and witness fees from the insurer when the intervenor substantially contributes to a Commissioner decision. Options (a), (b), and (c) describe systems that Prop 103 specifically replaced.

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