Vermont Statutes Title 8 Sec. 4686
Terms Used In Vermont Statutes Title 8 Sec. 4686
- classification: means a plan, system, or arrangement for recognizing differences in exposure to hazard among risks. See
- Expenses: means that portion of any rate attributable to acquisition, field supervision and collection expenses, general expenses, and taxes, licenses, and fees. See
- following: when used by way of reference to a section of the law shall mean the next preceding or following section. See
- Market: means the statewide interaction between buyers and sellers of a particular line of insurance or product market component. See
- State: when applied to the different parts of the United States may apply to the District of Columbia and any territory and the Commonwealth of Puerto Rico. See
§ 4686. Rating methods or criteria
In determining whether rates comply with the excessiveness standard in a noncompetitive market under subdivision 4685(b)(2) of this title, the inadequacy standard under subsection 4685(c) of this title and the unfair discrimination standard under subsection 4685(d) of this title, the following criteria shall apply:
(1) Basic factors in rates. Due consideration shall be given to past and prospective loss and expense experience within, and as reasonable and necessary outside this State; to catastrophe hazards; to residual market loss redistributions and other similar obligations, if any; to a reasonable provision for underwriting profit; to contingencies, if any; to trends within and outside this State; to loadings for leveling premium rates over time or for dividends or savings to be allowed or returned by insurers to their policyholders, members, or subscribers; and to all other relevant factors.
(2) Classification. Risks may be classified in any lawful and reasonable way for the collection of statistics and establishment of rates. Rates may be modified for individual risks in accordance with rating plans or schedules which provide for recognition of probable variations in hazards, expenses, or both.
(3) Expenses. The expense provisions included in the rates to be used by an insurer shall reflect the operating methods of the insurer, and, so far as is determinable and reasonable, its own actual and anticipated expense experience for the kind of insurance involved, or any subdivision thereof.
(4) Profits. The rates shall contain an allowance providing for a reasonable profit. In determining the reasonableness of profit, consideration shall be given to all relevant investment income and a provision for contingencies may be included. (Added 1983, No. 238 (Adj. Sess.), § 1; 1987, No. 185 (Adj. Sess.), § 2, eff. May 5, 1988.)