Utah Code 31A-19a-201. Rate standards
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(1) Rates may not be excessive, inadequate, or unfairly discriminatory.
Terms Used In Utah Code 31A-19a-201
- Expenses: means that portion of a rate attributable to:(4)(a) acquisition;(4)(b) field supervision;(4)(c) collection expenses;(4)(d) general expenses;(4)(e) taxes;(4)(f) licenses; and(4)(g) fees. See Utah Code 31A-19a-102
- Insurance: includes :
(96)(b)(i) a risk distributing arrangement providing for compensation or replacement for damages or loss through the provision of a service or a benefit in kind;(96)(b)(ii) a contract of guaranty or suretyship entered into by the guarantor or surety as a business and not as merely incidental to a business transaction; and(96)(b)(iii) a plan in which the risk does not rest upon the person who makes an arrangement, but with a class of persons who have agreed to share the risk. See Utah Code 31A-1-301- Insured: means a person to whom or for whose benefit an insurer makes a promise in an insurance policy and includes:
(103)(a)(i) a policyholder;(103)(a)(ii) a subscriber;(103)(a)(iii) a member; and(103)(a)(iv) a beneficiary. See Utah Code 31A-1-301- Market: means the interaction between buyers and sellers consisting of a:
(8)(a)(i) product component; and(8)(a)(ii) geographic component. See Utah Code 31A-19a-102- Mass marketed plan: means a method of selling insurance when:
(9)(a) the insurance is offered to:(9)(a)(i) employees of a particular employer;(9)(a)(ii) members of a particular association or organization; or(9)(a)(iii) persons grouped in a manner other than described in Subsection (8)(a)(i) or (ii), except groupings formed principally for the purpose of obtaining insurance; and(9)(b) the employer, association, or other organization, if any, has agreed to, or otherwise affiliated itself with, the sale of insurance to its employees or members. See Utah Code 31A-19a-102- Policy: includes a service contract issued by:
(150)(b)(i) a motor club under Chapter 11, Motor Clubs;(150)(b)(ii) a service contract provided under Chapter 6a, Service Contracts; and(150)(b)(iii) a corporation licensed under:(150)(b)(iii)(A) Chapter 7, Nonprofit Health Service Insurance Corporations; or(150)(b)(iii)(B) Chapter 8, Health Maintenance Organizations and Limited Health Plans. See Utah Code 31A-1-301- Rate: means that cost of insurance per exposure unit either expressed as:
(12)(a)(i) a single number; or(12)(a)(ii) as a pure premium rate, adjusted before any application of individual risk variations, based on loss or expense considerations to account for the treatment of:(12)(a)(ii)(A) expenses;(12)(a)(ii)(B) profit; and(12)(a)(ii)(C) individual insurer variation in loss experience. See Utah Code 31A-19a-102- Riskiness: means the variability of results around the average expected result. See Utah Code 31A-19a-102
(2)(2)(a) Rates are not excessive if a reasonable degree of price competition exists at the consumer level with respect to the class of business to which they apply. In determining whether a reasonable degree of price competition exists, the commissioner shall consider:(2)(a)(i) relevant tests of workable competition pertaining to:(2)(a)(i)(A) market structure;(2)(a)(i)(B) market performance; and(2)(a)(i)(C) market conduct; and(2)(a)(ii) the practical opportunities available to consumers in the market to:(2)(a)(ii)(A) acquire pricing and other consumer information; and(2)(a)(ii)(B) compare and obtain insurance from competing insurers.(2)(b) The tests described in Subsection (2)(a) include:(2)(b)(i) the size and number of insurers actively engaged in the market and class of business;(2)(b)(ii) the market shares of insurers actively engaged in the market and changes in market shares;(2)(b)(iii) the existence of rate differentials in that class of business;(2)(b)(iv) ease of entry and latent competition of insurers capable of easy entry;(2)(b)(v) availability of consumer information concerning the product and sales outlets or other sales mechanisms; and(2)(b)(vi) efforts of insurers to provide consumer information.(2)(c) If reasonable price competition does not exist, rates are excessive if:(2)(c)(i) rates are likely to produce a long-term profit that is unreasonably high in relation to the riskiness of the class of business; or(2)(c)(ii) expenses are unreasonably high in relation to the services rendered.(3) Rates are inadequate if:(3)(a) they are clearly insufficient, when combined with the investment income attributable to them, to sustain the projected losses and expenses in the class of business to which they apply; and(3)(b) the use of such rates has or, if continued, will have:(3)(b)(i) the effect of substantially lessening competition; or(3)(b)(ii) the tendency to create a monopoly in any market.(4)(4)(a) A rate is unfairly discriminatory if price differentials fail to equitably reflect the differences in expected losses and expenses after allowing for practical limitations.(4)(b) A rate is not unfairly discriminatory if it is averaged broadly among persons insured under a:(4)(b)(i) group, franchise, or blanket policy; or(4)(b)(ii) mass marketed plan. - Insurance: includes :