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
Assets from a will transfer into an established life insurance trust. Through this mechanism, assets that have been probated are transferred into a living trust. ...
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Insurance company that is organized under the state laws by which the company is licensed and that is called a domestic insurer. Also, this insurance company may be chartered and licensed ...
Attachment of decreasing term life insurance to an ordinary life policy to provide monthly income to a beneficiary if death occurs during a specified period. If the insured dies after the ...
Investment risk associated with the relationship between the yield (interest, dividends, and capital) of financial instruments and the rate of inflation in the economy. For fixed income ...
Court-appointed or commissioner of insurance-appointed custodian to manage the affairs of an insurance company whose management is deemed unable to manage that company in a proper fashion. ...
Method of establishing rates in which the current year's premium is calculated to reflect the actual current year's loss experience. An initial premium is charged and then adjusted at the ...
Statement showing assets and liabilities of an individual. ...
Law by which many states attempt to regulate insurers who are unlicensed in those states. With a few notable exceptions, such as re insurers, insurance companies must be licensed in the ...
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