Article 9.--GENERAL PROVISIONS RELATING TO FIRE INSURANCE COMPANIES
40-953.Same; excessive, inadequate or unfairly discriminatory rates orrates resulting in destruction of competition, standards.Rates shall not be excessive, inadequate or unfairlydiscriminatory,nor shall an insurer charge any rate which if continued will have or tend tohave the effect of destroying competition or creating a monopoly. Rates arepresumed not to be excessive if a reasonable degree of market competitionexists at the consumer level with respect to the class of business to whichthey apply. Rates in a noncompetitive market are excessive if they areproducing or are likely to produce unreasonably high profits for the insuranceprovided or if expenses are unreasonably high in relation to services rendered.A competitive market in a type of insurance subject to this act is presumed toexist unless the commissioner after notice of hearing determines and ordersthat a reasonable degree of competition does not exist in the market. Suchorder shall expire no later than one year after issuance unless thecommissioner renews the rule after a hearing and a finding of the continuedlackof a reasonable degree of competition. In determining whether a reasonabledegree of market competition exists, the commissioner shall consider allrelevant tests, including: (1) The number, market share, and concentrationof insurers, as measured by the 1992 Horizontal Merger Guidelines published inthe Federal Register September 10, 1992 (57 FR 41552), actively engaged in theclass of business, (2) theexistence of rate differentialsin that class of business, (3) ease of entry into the market, and (4) whetherlong-run profitability for insurersin that class of business is unreasonably high in relation to its riskiness. Ifsuch competition does not exist, rates are excessive if they are likely toproduce a long run profit that is unreasonably high in relation to theriskiness of the class of business, or if expenses are unreasonably high inrelation to the services rendered.
Rates are inadequate if they are clearly insufficient, together with theinvestment income attributable to them, to sustain projected losses andexpenses in the class of business to which they apply.
One rate is unfairly discriminatory in relation to another in the same classif it clearly fails to reflect equitably the differences in expected losses andexpenses. Rates are not unfairly discriminatory because different premiumsresult for policyholders with like loss exposures but different expensefactors or likeexpense factors but different loss exposures, so long as the rates reflect thedifferences with reasonable accuracy. Rates are not unfairly discriminatory ifthey are averaged broadly among persons insured under a group, franchise, massmarketed plan or blanket policy.
Article 9.--GENERAL PROVISIONS RELATING TO FIRE INSURANCE COMPANIES
40-953.Same; excessive, inadequate or unfairly discriminatory rates orrates resulting in destruction of competition, standards.Rates shall not be excessive, inadequate or unfairlydiscriminatory,nor shall an insurer charge any rate which if continued will have or tend tohave the effect of destroying competition or creating a monopoly. Rates arepresumed not to be excessive if a reasonable degree of market competitionexists at the consumer level with respect to the class of business to whichthey apply. Rates in a noncompetitive market are excessive if they areproducing or are likely to produce unreasonably high profits for the insuranceprovided or if expenses are unreasonably high in relation to services rendered.A competitive market in a type of insurance subject to this act is presumed toexist unless the commissioner after notice of hearing determines and ordersthat a reasonable degree of competition does not exist in the market. Suchorder shall expire no later than one year after issuance unless thecommissioner renews the rule after a hearing and a finding of the continuedlackof a reasonable degree of competition. In determining whether a reasonabledegree of market competition exists, the commissioner shall consider allrelevant tests, including: (1) The number, market share, and concentrationof insurers, as measured by the 1992 Horizontal Merger Guidelines published inthe Federal Register September 10, 1992 (57 FR 41552), actively engaged in theclass of business, (2) theexistence of rate differentialsin that class of business, (3) ease of entry into the market, and (4) whetherlong-run profitability for insurersin that class of business is unreasonably high in relation to its riskiness. Ifsuch competition does not exist, rates are excessive if they are likely toproduce a long run profit that is unreasonably high in relation to theriskiness of the class of business, or if expenses are unreasonably high inrelation to the services rendered.
Rates are inadequate if they are clearly insufficient, together with theinvestment income attributable to them, to sustain projected losses andexpenses in the class of business to which they apply.
One rate is unfairly discriminatory in relation to another in the same classif it clearly fails to reflect equitably the differences in expected losses andexpenses. Rates are not unfairly discriminatory because different premiumsresult for policyholders with like loss exposures but different expensefactors or likeexpense factors but different loss exposures, so long as the rates reflect thedifferences with reasonable accuracy. Rates are not unfairly discriminatory ifthey are averaged broadly among persons insured under a group, franchise, massmarketed plan or blanket policy.
Article 9.--GENERAL PROVISIONS RELATING TO FIRE INSURANCE COMPANIES
40-953.Same; excessive, inadequate or unfairly discriminatory rates orrates resulting in destruction of competition, standards.Rates shall not be excessive, inadequate or unfairlydiscriminatory,nor shall an insurer charge any rate which if continued will have or tend tohave the effect of destroying competition or creating a monopoly. Rates arepresumed not to be excessive if a reasonable degree of market competitionexists at the consumer level with respect to the class of business to whichthey apply. Rates in a noncompetitive market are excessive if they areproducing or are likely to produce unreasonably high profits for the insuranceprovided or if expenses are unreasonably high in relation to services rendered.A competitive market in a type of insurance subject to this act is presumed toexist unless the commissioner after notice of hearing determines and ordersthat a reasonable degree of competition does not exist in the market. Suchorder shall expire no later than one year after issuance unless thecommissioner renews the rule after a hearing and a finding of the continuedlackof a reasonable degree of competition. In determining whether a reasonabledegree of market competition exists, the commissioner shall consider allrelevant tests, including: (1) The number, market share, and concentrationof insurers, as measured by the 1992 Horizontal Merger Guidelines published inthe Federal Register September 10, 1992 (57 FR 41552), actively engaged in theclass of business, (2) theexistence of rate differentialsin that class of business, (3) ease of entry into the market, and (4) whetherlong-run profitability for insurersin that class of business is unreasonably high in relation to its riskiness. Ifsuch competition does not exist, rates are excessive if they are likely toproduce a long run profit that is unreasonably high in relation to theriskiness of the class of business, or if expenses are unreasonably high inrelation to the services rendered.
Rates are inadequate if they are clearly insufficient, together with theinvestment income attributable to them, to sustain projected losses andexpenses in the class of business to which they apply.
One rate is unfairly discriminatory in relation to another in the same classif it clearly fails to reflect equitably the differences in expected losses andexpenses. Rates are not unfairly discriminatory because different premiumsresult for policyholders with like loss exposures but different expensefactors or likeexpense factors but different loss exposures, so long as the rates reflect thedifferences with reasonable accuracy. Rates are not unfairly discriminatory ifthey are averaged broadly among persons insured under a group, franchise, massmarketed plan or blanket policy.
