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
Provision in corporate life insurance policies that allows coverage to be transferred to a new individual with proof of insurability, for a premium appropriate to the age of the new ...
One of two bureaus that writes forms and files standard rates for inland marine insurance. The other is the inland marine insurance bureau. ...
Property insurance coverage available to businesses that pays the established market (sales) value of products that are damaged rather than simply their lower (production) cost. This fills ...
Same as term Direct Response Marketing: method of selling insurance directly to insureds through a companies own employees, through the mail, or at airport booths. The company uses this ...
Transfer of highly individualized loss exposures that is not based on the usual pooling principles of insurance such as risk identification and classification selection. Rather than setting ...
Prepaid group health insurance plan that entitles members to services of participating physicians, hospitals, and clinics. Emphasis is on preventive medicine. Members of the HMO pay a flat ...
Defined contribution pension plan in which employer contributions are set under a collective bargaining agreement. It usually covers the employees of a number of firms and is administered ...
Coverage for less than one year in duration. ...
Bodily or emotional injury resulting from physical or mental wound or shock. A traumatic injury is caused by something outside the person's body as opposed to a sickness or a disease. An ...
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