New York insurance regulators have proposed requiring insurers to obtain state approval before raising private passenger auto insurance rates.
The Department of Financial Services proposal would implement changes included in the state's fiscal 2027 budget and replace a system that allows some increases without prior approval.
Under current rules, insurers may make no more than two overall average rate increases without advance approval when the cumulative change is within 5%. The proposed regulation would require express approval from the department for every upward rate change.
Insurers would also have to notify policyholders when they reduce rates without prior approval because of the budget reforms and explain the reason for the decrease.
Gov. Kathy Hochul said the change is intended to improve transparency and strengthen consumer protections as the state works to address insurance fraud and litigation costs.
Acting DFS Superintendent Kaitlin Asrow said independent review of every increase would give policyholders more information and accountability.
The broader state effort includes guidance for insurance rate filings, required premium discounts, specialized fraud-prevention training and a public webpage listing insurance discounts and savings opportunities.
State lawmakers described the approval requirement as one part of a broader attempt to slow rising premiums. The budget changes also target fraud and litigation expenses that officials say are reflected in consumer rates.
The proposal does not guarantee that a requested increase will be rejected. It would require the insurer to submit the change for a comprehensive review before charging customers the higher rate.
A 60-day public comment period began with publication of the proposal in the State Register. The underlying law and regulation are scheduled to take effect Nov. 27, 2026.
The proposed text and instructions for submitting comments are available through the Department of Financial Services website.
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