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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.)