The Vermont Statutes Online
Banking and Insurance
PROPERTY AND CASUALTY INSURANCE RATE REGULATION
INSURANCE RATES AND STATISTICS
4686. Rating methods or criteria
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:
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.
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.
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.)