Oregon bill would require insurers to explain premium increases to policyholders

House members held a public hearing on House Bill 2563 on Feb. 11 that would require property and casualty insurers to provide clear, reasonable explanations to policyholders when a renewal premium increases.

The bill, sponsored for the Oregon Division of Financial Regulation (DFR), would require insurers to supply explanations on request for renewals effective Jan. 1, 2026, and to provide automatic notices for renewal increases of 10% or more beginning in 2027. The rules would apply to personal auto and homeowners policies and include a 20-day response deadline for insurers responding to written requests.

DFR Deputy Administrator Alex Chang told the committee the agency sees the measure as a consumer-protection response to frequent complaints. "We are here today to urge your support for House Bill 25 63, which is aimed at addressing one of the more common set of complaints we get at the division. Namely, my homeowners or auto insurance rates are going up. I can't get a straight answer as to why and what can I do about it?" Chang said. He said consumers often receive renewal notices that either omit reasons for a rate increase or list vague factors such as "driving record" or "claims history" without specifying what event triggered the change.

Jesse O'Brien, policy manager at DFR, described the bill's two-phase approach. Phase 1 (renewals on or after Jan. 1, 2026) would require insurers to provide an explanation on written request and to disclose to policyholders, prominently on renewal notices or billing statements, that the explanation may be requested. Insurers would have 20 days to respond after receiving a written request. Phase 2 (beginning in 2027) would require insurers to proactively send an explanation when a renewal premium increases by 10% or more; the bill also specifies the content of explanations and lists possible criteria that may justify a rate increase, such as vehicle specifics, where a vehicle is stored, claims history, credit score and homeownership status. O'Brien said the bill exempts disclosure of trade secrets, proprietary modeling data and usage-based telematics components, and it would not apply to policyholder-initiated changes in coverage.

Industry witnesses said they share the goal of informing consumers but warned of compliance costs and operational burdens. Denny Ritter of the American Property Casualty Insurance Association said APICA represents about 65% of property and casualty insurers nationwide and urged that disclosures be "useful" and not unduly costly. Isis Thornton Saunders of Professional Insurance Agents of Oregon said individualized explanations could impose significant administrative burdens on smaller insurers and agents, potentially raising costs for policyholders. The Northwest Insurance Council—speaking from Washington—said the Washington rule that inspired the Oregon draft produced relatively few consumer requests in phase 1 and that insurers have taken on additional costs to respond to those requests.

Consumer advocates urged stronger, proactive requirements. Michael DeLong of the Consumer Federation of America and Michelle Drews of the Oregon Consumer League supported the bill, with DeLong urging policymakers not to water down the measure and Drews recounting a personal experience of a greater-than-30% renewal increase where the insurer cited only "inflation" after a long hold time. DeLong cited an April–November 2024 consumer price index snapshot for auto insurance that showed sharp year-over-year increases and said consumers need clearer explanations to shop or correct inaccurate information.

Committee members probed implementation details, including whether the requirement could prompt insurers to drop marginal customers rather than comply and whether the state or industry can estimate the cost of compliance. DFR said it is working with industry to reach consensus language and may propose a -1 amendment to limit scope (the original draft would also have applied to commercial auto). DFR staff also pointed to Washington state's phased regulation and the NAIC model being used as references.

The hearing produced no vote; committee members closed the public hearing on HB 2563 and moved to other bills on the agenda.

Ending: Lawmakers, regulators and industry representatives said they expect continued negotiations on amendment language ahead of any committee decision. DFR said it will continue stakeholder talks to refine the bill and to balance consumer utility against insurer compliance costs.