287.950. Competitive market, rates not to be excessive, inadequate, unfairly discriminatory. - Missouri Statutes

Competitive market, rates not to be excessive, inadequate, unfairlydiscriminatory.

287.950. 1. Rates in a competitive market shall not beexcessive, inadequate or unfairly discriminatory. Rates areexcessive if it is likely to produce a long-run profit that isunreasonably high for the insurance provided or if expenses areunreasonably high in relation to services rendered. Rates arenot inadequate unless clearly insufficient to sustain projectedlosses and expenses and the use of such rates, if continued, willtend to create a monopoly in the market. A rate is inadequate iffunds equal to the full ultimate cost of anticipated losses andloss adjustment expenses are not produced when the prospectiveloss costs are applied to anticipated payrolls.

2. Unfair discrimination exists if, after allowing forpractical limitations, price differentials fail to reflectequitably the differences in expected losses and expenses. Arate is not unfairly discriminatory because different premiumsresult for policyholders with like loss exposures but differentexpenses, or like expenses but different loss exposures, so longas the rate reflects the differences with reasonable accuracy.

(L. 1993 S.B. 251 § 25)

Effective 1-1-94