Open Competition Law
Form of state rating legislation that allows each property/liability insurer to choose between using rates set by a bureau or its own rates. Individual states regulate insurers and approve their property insurance rates. There are three methods of rate approval in addition to open competition: prior approval rating, modified prior approval rating and file and use. At one time the insurance industry operated like a cartel, with rates set by bureaus and filed with the insurance commissioners of each state. Experts believed that competition would result in either unfairly high rates or unreasonably low rates that would lead to mass insurance company insolvencies. But open competition became widespread after New York State adopted it in 1969.
Popular Insurance Terms
Nominal interest rate minus the rate of inflation. ...
Basic employee benefit under which an employer buys a master policy and issues certificates to employees denoting participation in the plan. Group life is also available through unions and ...
Section of a policy that specifies the dollar amount or percentage of any loss that the insurance does not pay. Most property and medical policies specify that the first portion of any loss ...
Same as term Unallocated Funding Instrument: pension funding agreement under which funds paid into a retirement plan are not currently allocated to purchase retirement benefits. The funds ...
Bonds that are secured by mortgage securities classified as either interest only or principal only strips (separate trading of registered interest and principal of securities). Insurance ...
Trust in which rights to make any changes therein are surrendered permanently by the grantor. The grantor uses this type of trust to transfer assets and any potential depreciation out of ...
Clause added to an insurance policy providing waiver of premium (WP) if the premium payer dies or becomes disabled. For example, this option is available on insurance policies on a child's ...
Same as term Civil damages Awarded: sums payable to the winning plaintiff by the losing defendant in a court of law; can take any or all of these forms: general, punitive, and special. ...
Same as term Bankers Blanket Bond: coverage for a bank in the event of loss due to dishonest acts of its employees or individuals external to the bank. For example, if a teller goes to ...
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