What must insurers do if they plan to change premium rates?

Insurers are required to notify policyholders in advance if they plan to change premium rates. This practice is crucial for ensuring transparency and allowing policyholders to understand how their insurance costs may be impacted. By providing advance notification, insurers enable policyholders to evaluate their options, which may include shopping around for better rates or considering different coverage options.

This requirement also helps to maintain trust between the insurer and the insured. Policyholders are entitled to know about changes that could affect their financial commitments and coverage strategies. The advance notice acts as a protective measure for consumers, making sure they have adequate time to respond to rate changes rather than being subjected to immediate increases without warning.

Some other options listed are not typically procedures required for changing premium rates. For example, while legislative approval may be necessary for certain regulatory changes or major company policy adjustments, it is not a universal requirement for changing premium rates across all insurers. Additionally, implementing changes immediately would not allow policyholders the chance to adjust their plans accordingly. Publishing changes in local newspapers may be part of broader communication strategies, but it does not replace the essential requirement of directly notifying affected policyholders ahead of any rate changes.