Auto insurers have begun complying with new rate setting regulations for California drivers, although the industry is continuing to challenge the new rules in court.

Chubb announced yesterday it would file a new rate filing and class plan in compliance with the new regulations–a move that State Farm, California's largest auto insurer, announced last week.

Under the new regulations insurers in rating drivers must give less weight to where they are domiciled.

The new rules took effect last week after courts rejected insurers' request for a stay while the industry sues to overturn the regulations.

Sam Sorich, president of the Association of California Insurance Companies, said the group hasn't decided whether or not to pursue an appeal to obtain a stay, and wondered whether pursuing such an appeal would make sense after the rules have already taken effect.

“Frankly, the horses may already be out of the barn on that one,” he said.

The ACIC is continuing with its overall challenge to the regulations, however.

“We intend to pursue that case and have a judicial ruling on whether or not the regulations comply with the law,” Mr. Sorich said.

The industry challenge has been filed in State Superior Court in Sacramento, Mr. Sorich said, adding, however, that it will likely be “a couple of months” before any further developments in the case occur.

The new rules mandate that when calculating insurance rates companies cannot give the location where a car is garaged more weight than three “primary factors”–the driver's record, years of experience and the number of miles the car is driven.

The location of the car is among 16 “secondary factors” included in the rate setting calculation. Under the prior system, none of the three primary factors could be outweighed by the average weight of the 16 secondary factors, but under the new system no single secondary factor can be considered more than any of the primary factors.

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