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
Excess liability coverage above the limits of a basic business liability insurance policy such as the owners, landlords and tenants liability policy. For example, if a basic policy has a ...
Method of comparing the costs of a set of cash value life insurance policies that takes into account the time value of money. The true costs of alternative cash value policies with the same ...
Automatic reinsuring of individual risks by an insurer with a reinsurer. The insurer must transfer the risks to its reinsurer and its reinsurer must accept this transfer. ...
Same as term General Characteristics: attributes of a particular employee benefit plan. For example, a general characteristic of group life insurance is that the whole group is ...
Payments awarded by a court in a liability suit. Money damages can be broken down into compensatory and punitive. Compensatory damages reimburse a plaintiff for expenses incurred for such ...
Same as term agent of record: individual who has a contractual agreement with a policyowner. The agent of record has a legal right to commissions from the insurance policy. ...
Initial premiums on all insurance policies in force (those policies that have not been cancelled or expired). ...
Health maintenance organization that provides medical services to the HMO members through an exclusive contract with specific physicians and hospitals. These selected physicians and ...
Time frame during which an annuitant makes premium payments to an insurance company. The obligations of the company to the annuitant during this period depend on whether a pure annuity or ...
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