Virginia Code 38.2-1908: Rate making and delegation of filing obligation
A. An insurer shall establish rates and supplementary rate information for any market segment based on the factors in § 38.2-1904. A rate service organization shall establish prospective loss costs and supplementary rate information for any market segment based on the factors in § 38.2-1904. An insurer may use supplementary rate information prepared by a rate service organization and may use prospective loss costs determined by the rate service organization with modification for its own expense and profit. The insurer may modify the prospective loss costs based on its own loss experience as the credibility of that loss experience allows.
Terms Used In Virginia Code 38.2-1908
- classification: means the plan, system, or arrangement for grouping risks with similar characteristics or a specified class of risk by recognizing differences in exposure to hazards. See Virginia Code 38.2-1901
- Commission: means the State Corporation Commission. See Virginia Code 38.2-100
- Experience rating: means a statistical procedure utilizing past risk experience to produce a prospective premium credit, debit, or unity modification. See Virginia Code 38.2-1901
- Insurer: means an insurance company. See Virginia Code 38.2-100
- Market segment: means any line or class of insurance or, if it is described in general terms, any subdivision of insurance or any class of risks or combination of classes. See Virginia Code 38.2-1901
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- 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 Virginia Code 38.2-1901
- Rate service organization: means any entity, including its affiliates or subsidiaries, which either has two or more member insurers or is controlled either directly or indirectly by two or more insurers, other than a joint underwriting association under § 38. See Virginia Code 38.2-1901
- rates: means any rate of premium, policy fee, membership fee or any other charge made by an insurer for or in connection with a contract or policy of insurance. See Virginia Code 38.2-100
- Statistical plan: means the plan, system, or arrangement used in collecting data for rate making or other purposes. See Virginia Code 38.2-1901
- Subscriber: means a person obligated under a reciprocal insurance agreement. See Virginia Code 38.2-1201
- Supplementary rate information: includes any manual or plan of rates, experience rating plan, statistical plan, classification, rating schedule, minimum premium, or minimum premium rule, policy fee, rating rule, rate-related underwriting rule, and any other information not otherwise inconsistent with the purposes of this chapter required by the Commission. See Virginia Code 38.2-1901
B. An insurer may discharge its obligation to file supplementary rate information under subsection A of § 38.2-1906 by giving notice to the Commission that it uses supplementary rate information prepared and filed with the Commission by a designated rate service organization of which it is a member, subscriber, or service purchaser. The Commission may by order require an insurer to provide information in addition to that filed by the rate service organization. The insurer’s supplementary rate information shall be that filed from time to time by the rate service organization, including any amendments to the supplementary rate information, subject to modifications filed by the insurer.
C. Every insurer shall adhere to the uniform classification system, uniform experience rating plan, and uniform statistical plan approved by the Commission in the provision of insurance defined in § 38.2-119. An insurer may develop subclassifications of the uniform classification system upon which rates for insurance defined in § 38.2-119 may be made; however, such subclassification must first be filed with and approved by the Commission. An insurer filing such subclassifications must certify to the Commission that the data it produces can be reported in a manner consistent with the uniform statistical plan and uniform classification system of its designated rate service organization.
1973, c. 504, § 38.1-279.36; 1976, c. 275; 1982, c. 201; 1986, c. 562; 1987, c. 697; 1990, c. 596; 1993, c. 985.