§ 27-7.1-4.1 - Standards for approval of rates. - Rhode Island Statutes

SECTION 27-7.1-4.1

   § 27-7.1-4.1  Standards for approval ofrates. – The director shall apply the following standards in making rates:

   (1) Rates shall not be excessive, inadequate, or unfairlydiscriminatory.

   (2) Due consideration shall be given to: (i) past andprospective loss experience within and outside the state; (ii) a reasonablemargin for profits and contingencies; (iii) dividends, savings, or unabsorbedpremium deposits allowed or returned by insurers to their policyholders,members, or subscribers; (iv) past and prospective expenses both countrywideand those specifically applicable to this state; (v) provisions for specialassessments; and (vi) all other relevant factors within and outside this state.In determining the reasonableness of the profit, consideration shall be givento investment income.

   (3) Risks may be grouped by classifications for theestablishment of rates and minimum premiums. Classification rates may bemodified to produce rates for individual risks in accordance with rating plansthat establish standards for measuring variations in hazards or expenseprovisions, or both. These standards may measure any differences among risksthat can be demonstrated to have a probable effect upon losses or expenses.