Vermont Statutes Title 8 Sec. 4685
Terms Used In Vermont Statutes Title 8 Sec. 4685
- Competitive market: means a market that has not been found to be noncompetitive pursuant to section 4684 of this title. See
- Expenses: means that portion of any rate attributable to acquisition, field supervision and collection expenses, general expenses, and taxes, licenses, and fees. See
- Market: means the statewide interaction between buyers and sellers of a particular line of insurance or product market component. See
- Noncompetitive market: means a market for which there is a ruling in effect pursuant to section 4684 of this title that a reasonable degree of competition does not exist. See
- Rate: means the cost of insurance per exposure base unit, or cost per unit of insurance, prior to the application of individual risk variations based upon loss or expense considerations, and does not include minimum premiums. See
§ 4685. Rate standards
(a) General. Rates shall not be excessive, inadequate, or unfairly discriminatory.
(b) Excessiveness.
(1) Competitive market. A rate in a competitive market is not excessive.
(2) Noncompetitive market. Rates in a noncompetitive market are excessive if they are producing or are likely to produce unreasonably high profits for the insurance provided or if expenses are unreasonably high in relation to services rendered.
(c) Inadequacy. Rates are not inadequate unless insufficient to sustain projected losses and expenses in the class or classes of business to which they apply or the use of such rates has or, if continued, will have the effect of substantially lessening competition or the tendency to create a monopoly in any market.
(d) Unfair discrimination. Unfair discrimination exists if, after allowing for practical limitations, price differentials fail to reflect equitably the differences in expected losses and expenses. A rate is not unfairly discriminatory because different premiums result for a class of policyholders with like loss exposures but different expenses, or like expenses but different loss exposures, provided that the rate equitably reflects the differences with reasonable accuracy. A rate is not unfairly discriminatory if it is averaged broadly among persons insured under a group, franchise, or blanket policy or a mass marketed plan. (Added 1983, No. 238 (Adj. Sess.), § 1; amended 2017, No. 134 (Adj. Sess.), § 6.)