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
Trade association whose membership is comprised of section 403(b) plan providers and practitioners. This association has an educational institute that grants the Certified Specialist in ...
Mistake made during the manufacturing process of a product that results in an inherent defect in the product. This mistake is covered under products and completed operations insurance. ...
Model state law of the NAIC that requires that two interest adjusted cost indices must be illustrated within each life insurance policy issued: NET PAYMENTS INDEX; and SURRENDER COST INDEX. ...
Measure of policyholder interest in a variable annuity policy prior to the annuity date. This measure is similar to a unit in a mutual fund. ...
Liability policy that covers all liability exposures for a large group that has something in common. For example, wrap-up insurance can be written for all the various businesses working ...
Value of a share of common stock, derived by dividing the total common stockholders' equity at the end of a period of time by the total number of shares outstanding at the end of the same ...
Figure used in calculating a worker's primary insurance amount (PIA) to determine Social Security benefits in the following manner: calculate the number of years between the worker's ...
Same as term Additional Insured: individual added to a life insurance policy other than the insured named in the policy. For example, an insured father can have a dependent son and daughter ...
Investment risk associated with the possibility that there is a rise in the interest rates after a fixed income security has been purchased resulting in a decline in that security's price. ...
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