379.470. Provisions governing rates. - Missouri Statutes

Provisions governing rates.

379.470. The rates made by each insurer or ratingorganization shall be subject to the following provisions:

(1) Rates shall not be excessive or inadequate, as hereindefined, nor shall they be unfairly discriminatory.

(2) No rate shall be held to be excessive unless such rateis unreasonably high for the insurance provided and a reasonabledegree of competition does not exist in the area with respect tothe classification to which such rate is applicable.

(3) No rate shall be held to be inadequate unless such rateis unreasonably low for the insurance provided and the continueduse of such rate endangers the solvency of the insurer using thesame, or unless such rate is unreasonably low for the insuranceprovided and the use of such rate by the insurer using same has,or if continued will have, the effect of destroying competitionor creating a monopoly.

(4) Due consideration shall be given to past and prospectiveloss experience within this state and consideration may also begiven to past and prospective loss experience outside this stateto the extent appropriate. Each insurer and rating organizationmay also give consideration to physical hazards, to catastrophehazards, if any, to a reasonable margin for underwriting profitand contingencies, to dividends, savings or unabsorbed premiumdeposits allowed or returned by insurers to their policyholders,members or subscribers, to past and prospective expenses bothcountrywide and those especially applicable to this state, and toany other factors within or outside this state which the insureror rating organization deems relevant to the making of rates.

(5) The systems of expense provisions included in the ratesfor use by any insurer or group of insurers may differ from thoseof other insurers or groups of insurers to reflect therequirements of the operating methods of any such insurer orgroup with respect to any kind of insurance, or with respect toany subdivision or combination thereof for which subdivision orcombination separate expense provisions are applicable.

(6) Risks may be grouped by classifications for theestablishment of rates and minimum premiums. Classificationrates may be modified to produce rates for individual risks inaccordance with standards for measuring variations in hazards orexpense provisions, or both. Such standards may measure anydifferences among risks that can be demonstrated to have aprobable effect upon losses or expenses. Classifications ormodifications of classification or any portion or any divisionthereof, of risks may be predicated upon size, expense,management, individual experience, purpose of insurance, locationor dispersion of hazard, or any other reasonable considerations,provided such classifications and modifications shall beapplicable to the fullest practicable extent to all risks underthe same or substantially the same circumstances or conditions.Classification rates may also be modified to produce rates forindividual or special risks which are not susceptible tomeasurement by any established standards.

(7) Except to the extent necessary to meet the provisions ofsubdivision (1) of this section, uniformity among insurers in anymatters within the scope of this section is not required.

(L. 1947 V. II p. 254 § 2)