§431:14-103 - Making of rates.

§431:14-103 Making of rates. (a) Rates shall be made in accordance with the following provisions:

(1) Rates shall not be excessive, inadequate, orunfairly discriminatory.

(2) Due consideration shall be given to:

(A) Past and prospective loss experiencewithin and outside this State; provided that if the claim does not exceed theselected deductible amount pursuant to section 386-100, and the employerreimburses the insurer for the amount, the claims shall not be calculated inthe employer's experience rating or risk category;

(B) The conflagration and catastrophe hazards,if any;

(D) Dividends, savings, or unabsorbed premiumdeposits allowed or returned by insurers to their policyholders, members, orsubscribers;

(E) Past and prospective expenses bothcountry-wide and those specially applicable to this State;

(F) Investment income from unearned premiumand loss reserve funds; and

(G) All other relevant factors within and outsidethis State.

(3) In the case of fire insurance rates,consideration shall be given to the experience of the fire insurance businessduring a period of not less than the most recent five-year period for whichthat experience is available.

(4) The systems of expense provisions included in therates for use by any insurer or group of insurers may differ from those ofother insurers or groups of insurers to reflect the requirements of theoperating methods of any insurer or group with respect to any class ofinsurance, or with respect to any subdivision or combination thereof for whichsubdivision or combination separate expense provisions are applicable.

(5) Risks may be grouped by classifications for theestablishment of rates and minimum premiums. Classification rates may bemodified to produce rates for individual risks in accordance with rating plansthat establish standards for measuring variations in hazards or expenseprovisions, or both. These standards may measure any differences among risks thatcan be demonstrated to have a probable effect upon losses or expenses. No riskclassification may be based upon race, creed, national origin, or the religionof the insured.

(6) Manual, minimum, class rates, rating schedules,or rating plans shall be made and adopted, except in the case of:

(A) Special rates where manual, minimum, classrates, rating schedules, or rating plans are not applicable; and

(B) Specifically rated inland marine risks.

(7) No insurer authorized to do business in this Stateshall issue any policy that provides or makes available to any risks preferredrates based upon any grouping of persons, firms, or corporations by way ofmembership, license, franchise, contract, agreement, or any other means, otherthan common majority ownership of the risks, or except where:

(A) A common stock ownership in and managementcontrol of the risks are held by the same person, corporation, or firm;

(B) Permitted or authorized by filings inexistence as of January 1, 1988, under the casualty rating law and the firerating law, as these filings may be amended from time to time;

(C) Health care providers, as defined insection 671-1 that could have joined the patients' compensation fund as itexisted in chapter 671, part III, prior to May 31, 1984, joined together withone or more groups of related or unrelated health care providers;

(D) Permitted under article 12; or

(E) Otherwise expressly provided by law.

(b) In cases of workers' compensationinsurance, all rates made in accordance with this section shall be given dueconsideration for good safety records of employers. By premium reductions,dividends, or both, insurance carriers shall recognize good safety performancerecords of employers in this State.

(c) Upon the issuance of a certificate by acertified safety and health professional to an employer that the employer hasan effective safety and health program pursuant to section 396-4.5, the insurershall provide the employer with a workers' compensation insurance premium discountof at least five per cent; provided that the employer shall maintain theeffective safety and health program throughout the policy period. Standardsfor the issuance of certificates shall be included in rules adopted by thedepartment of labor and industrial relations pursuant to chapter 91.

(d) For the purpose of ratemaking, allinsurers shall treat a volunteer firefighter the same as a firefighter employedby a county fire department; provided that the volunteer firefighters areattached to a station where a firefighter or volunteer firefighter who has beentrained and certified to drive a commercial motor vehicle by either the stateor county government, as appropriate, and who maintains a category (3) licenseas defined by section 286-102(b)(3) is on duty at all times or at least fourfirefighters or volunteer firefighters who have been trained and certified todrive a commercial motor vehicle by either the state or county government, asappropriate, and who maintain a category (3) license as defined by section286-102(b)(3) are members of the volunteer unit.

(e) Except to the extent necessary to meet theprovisions of subsection (a)(1), uniformity among insurers in any matterswithin the scope of this section is neither required nor prohibited. [L 1987, c347, pt of §2; am L 1990, c 255, §8; am L 1993, c 269, §2; am L 1995, c 234,§18; am L 1997, c 18, §1 and c 72, §1]

Cross References

Limited liability of volunteer firefighters, see §663-1.55.