Naic: Model Rating Laws National Association Of Insurance Commissioners
State laws based on a model law of the National Association of Insurance Commissioners (NAIC) that allow insurers to set rates independently; or adopt those rates developed by a rating bureau that must first be approved by the appropriate state regulator. Because state regulators believe that rate wars can be disastrous to the financial health of insurers, insurance companies are allowed to band together to set standard rates through rate making bureaus. Model rating laws also allow independent insurers to set their own rates, but prohibit the return of part of a premium to the insured other than as a dividend. Legislation developed from this model bill is called a prior approval law because the appropriate insurance commissioner must approve the rates involved. Other major types of rating laws are FILE-AND-USE RATING LAWS and OPEN COMPETITION LAWS.
Popular Insurance Terms
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Form of suretyship. For example, fidelity bonds reimburse an employer for financial loss resulting from dishonest acts of employees. ...
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Deductible, applied to every loss, expressed as a percentage of that loss. As the loss increases, the deductible amount increases. ...
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Same as term: statement of opinion : ...
Model state law providing guidelines by regulators for valuation of securities on the books of insurance companies. The act has two sections: one for valuation of fixed rate bonds and debt ...
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