(a) Basis for Disapproval. The commissioner shall disapprove a rate if:

(1) The commissioner finds that the rate is excessive, inadequate or unfairly discriminatory; or

(2) In the case of an advisory prospective loss costs filing, the commissioner finds the filing does not reasonably reflect projected losses, including loss adjustment expenses. For an advisory prospective loss costs filing the commissioner may also modify the filing as permitted by § 50-6-402(b).

(b) Disapproval Procedure.

(1) If the commissioner disapproves or modifies a filing, the commissioner shall issue a written order specifying in what respect that the rate proposed in the filing is excessive, inadequate or unfairly discriminatory or otherwise fails to meet the requirements of this part. The person making the filing shall be given a hearing upon written request made within thirty (30) days after the disapproval or modification order.

(2) If the commissioner disapproves rates already in effect, the commissioner shall issue the order only after a hearing held on not less than twenty (20) days' written notice to the insurer or rate service organization that made the filing. The order shall be issued within fifteen (15) days after the close of the hearing and shall specify in what respects the rates fail to meet the requirements of this part. The order shall also state when, within a reasonable period of time, but not less than forty-five (45) days, the further use of the rate in contracts of insurance made thereafter shall be prohibited. The order may include a provision for premium adjustment for policies issued, renewed or nonrenewed after the effective date of the order. In disputes concerning a multiplier, the insurer shall have the burden of persuasion that the commissioner's disapproval, modification, or failure to approve was inappropriate.

(c) Interim Rates. Whenever an insurer has no legally effective rates as a result of the commissioner's disapproval of rates or other act, the commissioner shall on request of the insurer specify interim rates for the insurer that are high enough to protect the interests of all parties, and may order that a specified portion of the premiums be placed in an escrow account approved by the commissioner. When new rates become legally effective, the commissioner shall order the escrowed funds or any overcharge in the interim rates to be distributed appropriately, except that refunds to policyholders that are de minimis shall not be required.