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
Disciplined approach to managing an insurance company's bond portfolio duration. When interest rates rise, the average maturity and duration of the bond portfolio is lengthened, resulting ...
Life insurance and long-term disability income insurance on major employees, with benefits payable to the business. Key person insurance has these advantages: enhances the ability of the ...
Percentage return appropriated by the insurer for an immediate variable annuity when the insurer calculates the initial income payment to the annuitant. If the variable annuity's underlying ...
Investment risk associated with the changes in government policies that may have a dramatic effect on financial instruments. For example, if federal legislation is passed removing the ...
Exceptions to coverage. There is no obligation for an insurance company to pay a claim if: the loss is not covered by a policy, or a particular person is not included in the definition of ...
Coverage for the seller of property on an installment or conditional sales contract if it is damaged or destroyed. For example, a television set is sold on an installment basis but is ...
Act that prohibits employers from discriminating against employees in employee benefit plans, regarding contributions or benefits based on race or gender. ...
Existence of a financial need which permits in-service withdrawals of funds from a section 401 (k) plan or a section 403 (b) plan to pay tuition for post secondary education for a ...
Non qualified deferred compensation plan for highly compensated employees or select group of personnel. The reporting and disclosure requirements of the employee retirement INCOME SECURITY ...
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