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
Fixed or stated amount of interest paid by a security expressed as a percent of the par value of the security. The longer the length of time until maturity, the higher the coupon rate to ...
Device that allows plan participants in employee stock ownership plan (ESOP) trust to reinvest the dividends into their section 401 (k) plan. Under the switchback approach, plan ...
The definition of special acceptance explains how two insurance institutions work together for the benefit of the masses. In order to define what special acceptance means, we must ...
Same as term Compulsory Insurance: coverage required by the laws of a particular state. For example, many states stipulate minimum amounts of automobile liability insurance that must be ...
Amount of the insurance company's liabilities for claims that have not been settled. If this reserve increases significantly in relation to the company's surplus, the risk is greater for ...
Endorsement to many commercial property insurance policies that covers office equipment. Coverage includes all equipment, whether or not owned by an insured, improvements an insured has ...
Picture of future dividends that the insurance company expects to be allocated to a specific block of policies. The accuracy of this picture depends on the actual future mortality, ...
Dividends of a participating life insurance policy deemed by the Internal Revenue Service to be a return of a portion of premiums and thus not subject to taxation. ...
Provision in a life insurance policy that if an insured dies within a given period of time, the beneficiary receives the face value of the policy plus its cash value. ...
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