31A-19a-201.   Rate standards.
     (1) Rates may not be excessive, inadequate, or unfairly discriminatory.
     (2) (a) Rates are not excessive if a reasonable degree of price competition exists at the consumer level with respect to the class of business to which they apply. In determining whether a reasonable degree of price competition exists, the commissioner shall consider:
     (i) relevant tests of workable competition pertaining to:
     (A) market structure;
     (B) market performance; and
     (C) market conduct; and
     (ii) the practical opportunities available to consumers in the market to:
     (A) acquire pricing and other consumer information; and
     (B) compare and obtain insurance from competing insurers.
     (b) The tests described in Subsection (2)(a) include:
     (i) the size and number of insurers actively engaged in the market and class of business;
     (ii) the market shares of insurers actively engaged in the market and changes in market shares;
     (iii) the existence of rate differentials in that class of business;
     (iv) ease of entry and latent competition of insurers capable of easy entry;
     (v) availability of consumer information concerning the product and sales outlets or other sales mechanisms; and
     (vi) efforts of insurers to provide consumer information.
     (c) If reasonable price competition does not exist, rates are excessive if:
     (i) rates are likely to produce a long-term profit that is unreasonably high in relation to the riskiness of the class of business; or
     (ii) expenses are unreasonably high in relation to the services rendered.
     (3) Rates are inadequate if:
     (a) they are clearly insufficient, when combined with the investment income attributable to them, to sustain the projected losses and expenses in the class of business to which they apply; and
     (b) the use of such rates has or, if continued, will have:
     (i) the effect of substantially lessening competition; or
     (ii) the tendency to create a monopoly in any market.
     (4) (a) A rate is unfairly discriminatory if price differentials fail to equitably reflect the differences in expected losses and expenses after allowing for practical limitations.
     (b) A rate is not unfairly discriminatory if it is averaged broadly among persons insured under a:
     (i) group, franchise, or blanket policy; or
     (ii) mass marketed plan.

Renumbered and Amended by Chapter 130, 1999 General Session
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Last revised: Thursday, May 28, 2009