(a)Basis for Disapproval. The commissioner shall disapprove a rate if:
Terms Used In Tennessee Code 56-5-108
Advisory prospective loss costs: means historical aggregate losses and loss adjustment expenses projected through development to their ultimate value and through trending to a future point in time. See Tennessee Code 56-5-102
Escrow: Money given to a third party to be held for payment until certain conditions are met.
Multiplier: means a workers' compensation insurance company's determination of the profits and expenses, other than loss expense and loss adjustment expense, all other applicable rating factors, including, but not limited to, schedule rating, experience rating and small deductible credits, and deviation from advisory prospective loss costs associated with writing workers' compensation insurance, which shall be expressed as a single multiplicative factor to be applied equally and uniformly to the advisory prospective loss costs approved by the commissioner in making rates for all classification of risks utilized by the company. See Tennessee Code 56-5-102
Person: means any association, aggregate of individuals, business, company, corporation, individual, joint-stock company, Lloyds-type organization, organization, partnership, receiver, reciprocal or interinsurance exchange, trustee or society. See Tennessee Code 56-16-102
Rate service organization: means any person or organization that assists insurers in ratemaking or filing as authorized by §. See Tennessee Code 56-5-102
State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
(1) The commissioner finds that the rate is excessive, inadequate or unfairly discriminatory; or(2) In the case of an advisory prospective loss costs filing, the commissioner finds the filing does not reasonably reflect projected losses, including loss adjustment expenses. For an advisory prospective loss costs filing the commissioner may also modify the filing as permitted by § 50-6-402(b).(b)Disapproval Procedure.(1) If the commissioner disapproves or modifies a filing, the commissioner shall issue a written order specifying in what respect that the rate proposed in the filing is excessive, inadequate or unfairly discriminatory or otherwise fails to meet the requirements of this part. The person making the filing shall be given a hearing upon written request made within thirty (30) days after the disapproval or modification order.(2) If the commissioner disapproves rates already in effect, the commissioner shall issue the order only after a hearing held on not less than twenty (20) days’ written notice to the insurer or rate service organization that made the filing. The order shall be issued within fifteen (15) days after the close of the hearing and shall specify in what respects the rates fail to meet the requirements of this part. The order shall also state when, within a reasonable period of time, but not less than forty-five (45) days, the further use of the rate in contracts of insurance made thereafter shall be prohibited. The order may include a provision for premium adjustment for policies issued, renewed or nonrenewed after the effective date of the order. In disputes concerning a multiplier, the insurer shall have the burden of persuasion that the commissioner’s disapproval, modification, or failure to approve was inappropriate.(c)Interim Rates. Whenever an insurer has no legally effective rates as a result of the commissioner’s disapproval of rates or other act, the commissioner shall on request of the insurer specify interim rates for the insurer that are high enough to protect the interests of all parties, and may order that a specified portion of the premiums be placed in an escrow account approved by the commissioner. When new rates become legally effective, the commissioner shall order the escrowed funds or any overcharge in the interim rates to be distributed appropriately, except that refunds to policyholders that are de minimis shall not be required.
