379.318. Rates, how made.
Rates, how made.
379.318. Rates shall be made in accordance with theprovisions of this section:
(1) Due consideration shall be given to past and prospectiveloss experience within and outside this state, to conflagrationand catastrophe hazards, if any, to a reasonable margin forunderwriting profit and contingencies, to dividends or savingsallowed or returned by insurers to their policyholders ormembers, to past and prospective expenses both countrywide andthose specially applicable to this state, to all other relevantfactors, including trend factors, within and outside this state,and in the case of fire insurance rates, to the underwritingexperience of the fire insurance business during a period of notless than the most recent five-year period for which suchexperience is available and relevant.
(2) Risks may be grouped by classifications, by ratingschedules or by any other reasonable methods, for theestablishment of rates and minimum premiums. Classificationrates may be modified to produce rates for individual risks inaccordance with rating plans which establish standards formeasuring variations in hazards or expense provisions, or both.Such standards may measure any differences among risks that canbe demonstrated to have a probable effect upon losses orexpenses.
(3) The systems of expense provisions included in the ratesfor use by any insurer or group of insurers may differ from thoseof other insurers or groups of insurers to reflect therequirements of the operating methods of any such insurer orgroup with respect to any kind of insurance, or with respect toany subdivision or combination thereof for which subdivision orcombination separate expense provisions are applicable and shallaccurately reflect the expenses of insurers or groups ofinsurers.
(4) Rates shall not be excessive, inadequate or unfairlydiscriminatory. No rate shall be held to be excessive unlesssuch rate is unreasonably high for the insurance coverageprovided and a reasonable degree of competition does not exist inthe area with respect to the classification to which such rate isapplicable. No rate shall be held to be inadequate unless suchrate is unreasonably low for the insurance coverage provided andis insufficient to sustain projected losses and expenses; orunless such rate is unreasonably low for the insurance coverageprovided and the use of such rate has, or if continued, willhave, the effect of destroying competition or creating amonopoly. Unfair discrimination shall be defined to include, butshall not be limited to, the use of rates which unfairlydiscriminate between risks in the application of like charges orcredits or the use of rates which unfairly discriminate betweenrisks having essentially the same hazard and having substantiallythe same degree of protection against fire and allied lines.
(5) Uniformity among insurers in any matters within thescope of this section is neither required nor prohibited.
(L. 1972 S.B. 547 § 3)