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
Pension plan funding instrument in which contributions paid by an employer are deposited to accumulate at interest. (These plans are usually noncontributory.) Upon retirement, an immediate ...
Individual who is legally responsible for taking care of another individual (s) who is deemed to be incapable of managing his/her own affairs. For example, children under the age of ...
Coverage on cargo in overseas ships for war-caused liability excluded under standard ocean marine insurance. Not covered is cargo awaiting shipment on a wharf, or on ships after 15 days of ...
Commission that is paid based on how profitable a particular type of business proves to be that is written by an agent. ...
Statement regarding an insured's retention of low-severity risks because they are not catastrophic, and can be absorbed without having a dramatic effect on the financial structure of a ...
Method of determining reimbursement from medical insurance according to diagnosis on a prospective basis. It originated with the medicare program. ...
Commission paid to an agent after the first year commission has been paid to that agent. Renewal commissions generally form a substantial portion of an agent's income after four years in ...
Temporary insurance contract providing coverage until a permanent policy is issued. In property and casualty insurance, some agents have authority to bind the insurance company to cover ...
Theft of another's property by a person entrusted with that property. Coverage can be found under various bonding arrangements. ...
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