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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
§
4685. Rate standards
(a) General.
Rates shall not be excessive, inadequate, or unfairly discriminatory.
(b)
Excessiveness.
(1) Competitive
market. A rate in a competitive market is not excessive or unfairly
discriminatory.
(2)
Noncompetitive market. Rates in a noncompetitive market are excessive if they
are producing or are likely to produce unreasonably high profits for the
insurance provided or if expenses are unreasonably high in relation to services
rendered.
(c) Inadequacy.
Rates are not inadequate unless insufficient to sustain projected losses and
expenses in the class or classes of business to which they apply or the use of
such rates has or, if continued, will have the effect of substantially
lessening competition or the tendency to create a monopoly in any market.
(d) Unfair
discrimination. Unfair discrimination exists if, after allowing for practical
limitations, price differentials fail to reflect equitably the differences in
expected losses and expenses. A rate is not unfairly discriminatory because
different premiums result for a class of policyholders with like loss exposures
but different expenses, or like expenses but different loss exposures, so long
as the rate equitably reflects the differences with reasonable accuracy. A rate
is not unfairly discriminatory if it is averaged broadly among persons insured
under a group, franchise, or blanket policy or a mass marketed plan. (Added
1983, No. 238 (Adj. Sess.), § 1.)