§4684. Competitive market

Link to law: http://legislature.vermont.gov/statutes/section/08/128/04684
Published: 2015

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The Vermont Statutes Online



Title

08

:
Banking and Insurance






Chapter

128

:
PROPERTY AND CASUALTY INSURANCE RATE REGULATION






Subchapter

001
:
INSURANCE RATES AND STATISTICS










 

§

4684. Competitive market

(a) A

competitive market in a type of insurance subject to this chapter is presumed

to exist unless:

(1) the

Commissioner, after notice and hearing, determines and orders that a reasonable

degree of competition does not exist in the market;

(2) the average

annual increase in premiums or rates in the market is 25 percent or more as

determined and noticed by the Commissioner; or

(3) an insurer

uses a claims made liability insurance policy form or endorsement.

(b) The

Commissioner shall conduct hearings to determine whether a reasonable degree of

competition exists whenever, in any market over any 12-month period, the

average rates or premiums increase at least 15 percent, but less than 25

percent, over the average rate or premiums for the immediately preceding

12-month period for that market. The Commissioner shall not be obligated to

hold hearings under this subsection if, based on the information available to

him or her under subsection 4688(a) of this title and other sources, the

Commissioner determines that a competitive market continues to exist.

(c) Upon a

determination of an increase in rates or premiums of 25 percent or more under

subdivision (a)(2) of this section, the Commissioner may issue a notice that a

reasonable degree of competition does not exist. Insurers may use their

currently filed rates for only 120 calendar days after such notice, unless the

Commissioner determines that it is in the consumer's best interest to extend

this time period.

(d) A

competitive market does not exist if an insurer uses a claims made liability

insurance policy form or endorsement. Insurers writing insurance on a claims

made basis are subject to the prefiling requirements of subdivision 4688(c)(1)

of this title.

(e) The rates or

premiums in a noncompetitive market shall be subject to the prefiling

requirements set forth in subdivision 4688(c)(1) of this title.

(f) An order or

notice that a noncompetitive market exists under subdivisions (a)(1) and (2) of

this section shall expire no later than two years after the order or notice

issues unless the Commissioner earlier rescinds the order or notice, or

continues the order or notice upon a further determination that a reasonable

degree of competition does not exist. Such further determination shall be

preceded by public notice, but may be made without a hearing unless requested

by an interested party.

(g) In

determining whether a reasonable degree of competition exists under subdivision

(a)(1) of this section, the Commissioner shall consider relevant structural and

functional factors in determining the competitiveness of the market, including:

the number of insurers actively engaged in providing coverage; market shares;

and ease of entry. (Added 1983, No. 238 (Adj. Sess.), § 1; 1985, No. 265 (Adj. Sess.),

§ 1, eff. June 4, 1986; 1987, No. 185 (Adj. Sess.), § 1, eff. May 5, 1988;

1989, No. 128 (Adj. Sess.), § 2.)
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