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
Insurance companies that seek an economic advantage, thereby increasing their returns on equity by utilizing their specialized knowledge about a given line of insurance, territory, or risk ...
Bureau insurer that files its statistical and underwriting experience with a rating bureau. ...
pool that contains various reinsurance companies with each sharing reinsurance contracts on a pro rata basis as they are submitted to the pool. market that operates much like the New York ...
Same as term Elimination Period: form of deductible usually found in disability income insurance; for example, no benefits may be payable for a length of time beginning with the first day ...
Assets of an insurer that are due and payable in the current year but have yet to be received by the insurer. ...
Irrevocable trust into which the grantor places assets and receives in turn a fixed amount of income from a fixed annuity (amount of income stipulated at the time the trust is established) ...
Coverage primarily for the liability of an individual or organization that results from negligent acts and omissions, thereby causing bodily injury and/or property damage to a third party. ...
Excess coverage over the first layer of medical insurance to provide for catastrophic medical payments. The first layer may be either group or individual medical insurance, or an individual ...
Inquiry conducted by a committee of the legislature of the State of New York in 1905 that looked at abuses of life insurance companies operating in the state. This study led to stricter ...
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