The New York State Department of Financial Services (DFS) will begin enforcing a regulation on Nov. 27 requiring private passenger auto insurers to obtain explicit prior approval from the state before raising rates. Currently, insurers can raise average rates up to two times without approval as long as the cumulative increase is within 5%. Insurers must also tell policyholders why when they lower rates without approval.
The New York State Department of Financial Services (DFS) announced that it will begin enforcing a new regulation on Nov. 27 requiring insurers that want to raise private passenger auto insurance rates to obtain explicit prior approval from the state. Announced by Gov. Kathy Hochul on Sept. 9, the regulation is a follow-up measure implementing the auto insurance rate reduction reforms included in the state's fiscal year 2027 budget.
Under the current rules, insurers can raise average rates up to two times without prior approval if the cumulative increase is within 5%. The new regulation eliminates this exception, requiring DFS approval for every increase.
There is also a change when rates are lowered. If an insurer reduces rates without prior approval under the budget reforms, it must notify the affected policyholders of the reduction and the reason for it. The reforms are also intended to lower premium burdens by reducing insurance fraud and excessive litigation costs.
DFS will accept comments on the proposed regulation for 60 days from the date it is published in the State Register. The announcement does not give the publication date. Questions about the regulation can be directed to the regulatory activity page on the DFS website (dfs.ny.gov) or to the DFS Press Office (212-709-1691). If you have received a notice of a rate increase, it is a good idea to keep your renewal bill and the insurer's notice.