Oklahoma’s Insurance Reform: What It Means For Advisors Nationwide

Oklahoma has historically been a "use-and-file" state, in which insurance companies could set rates and then submit supporting information to regulators.

New legislation shifts things toward a more "file first, then use" approach. It requires insurers to file proposed rate changes and supporting information before rates take effect, giving regulators time to review the filings and request additional data if needed.

Under HB 3781, signed by Gov. Kevin Stitt last month, insurance companies in competitive markets must file rate changes at least 30 days in advance, while insurers in noncompetitive markets have 60 days to file before execution.

The new law represents a deeper ongoing dialogue in property and casualty insurance that circles around price transparency.

It gives consumers greater confidence that proposed increases are put under scrutiny before they’re implemented, supporters say. From the insurer's standpoint, additional filing and reporting requirements mean rate hikes will take longer to kick in.

“The law might also open up a different avenue for advisors to educate their clients on the development of insurance rates and what causes changes in those rates,” said Steve H. Craft, Jr., the founder and principal at Lucleon Insurance, an independent insurance agency and premier property insurance broker.

How this legislation may affect other states

Whether other states will follow Oklahoma’s example will likely be determined by local market forces.

“Improved regulatory oversight has the potential to enhance consumer protection, but regulators must also ensure that insurers can adapt to shifting loss trends, inflation pressures, catastrophe exposures and reinsurance costs,” Craft explained.

In regions that experience extreme weather, such as Florida and California, premium increases are usually a direct result of risk and claims history rather than regulatory structure alone.

However, with consumers increasingly concerned about rising premiums, Craft anticipates that more states will consider similar legislation.

The law could serve as a model for states looking for a middle-ground approach, as it promotes increased transparency and accountability without imposing strict rate caps or fundamentally restructuring the insurance market.

Chip Merlin, founder and president at Merlin Law Group, agreed that more states are likely to jump on board as consumers are losing faith in insurance products.

“Rates seem unaffordable while denials, increasing deductibles and insurance coverage gaps have people wondering whether insurance is even worth purchasing in the first place. This new regulation makes premium costs a lot more transparent to the public,” Merlin explained.

A new opportunity to educate clients

Advisors in Oklahoma have acknowledged that their clients are paying some of the highest insurance rates in the country, and they’ve likely heard plenty of frustration about it. Fortunately, this legislation can help reassure clients that additional protections are now in place to scrutinize excessive increases.

At the end of the day, the goal isn’t to prohibit all rate increases, legislation supporters say. As stated, hikes may be necessary to reflect real losses and maintain market stability in states exposed to severe weather and catastrophe risk.

“However, the law does require stronger justification and transparency when insurers seek those increases. If people are going to pay more, they deserve to know why,” said Beth Swanson, insurance analyst at The Zebra, a comparison insurance platform.

Reassurance and education will continue to be important issues for clients to know. Advisor will want to explain what these changes mean, review options carefully at renewal, and guide clients toward coverage choices that fit their individual risks and budgets.

“You want clients to feel guided, not sold,” Swanson explained.

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