Policy Issuance 2-99

Subject: Renewals Ineligible for Preferred Risk Policies

Background: The convergence of major program changes to the eligibility requirements for Preferred Risk Policies (PRP) at approximately the same time as the implementation of the new AR zones in California in July 1998 has had a more profound impact on the residents of this area than on others around the country.

Policy Decision: The Mitigation Division has elected to retroactively reinstate the "zone grandfather" for Preferred Risk Policies in these areas on a temporary basis. In order to afford former PRP policyholders with an opportunity to plan for the transition to the standard rated policy, the Mitigation Division is authorizing insurers to endorse or cancel and rewrite the policies already renewed as standard rated policies back to PRPs under the following conditions.

  1. The risk must be located in an AR zone.
  2. The original effective date of the PRP must be prior to July 6, 1998.
  3. The "zone grandfather" will remain in effect for policies renewing through July 5, 2000.

Last Modified: Thursday, 25-May-2006 16:29:26 EDT