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
Reinsurance term under which the reinsurer exercises its faculty or prerogative to insure a risk or reject a risk from a ceding company. ...
One of two bureaus that writes forms and files standard rates for inland marine insurance. The other is the inland marine insurance bureau. ...
Costs incurred by an insurance company other than agent commissions and taxes; that is, mainly the administrative expense of running a company. ...
Act first passed by the United States Congress in 1981 and later amended in 1986 that provides for the establishment of risk retention groups whose purpose is to sell product liability ...
Same as term Deductible: amount of loss that insured pays in a claim; includes the following types: Absolute dollar amount. Amount the insured must pay before the company will pay, up to ...
Sum that an insurance company charges a business firm to restore a property or liability insurance policy, or a bond, to its initial face value after the insurance company has paid a claim ...
Insurance company's reinsurance commissions and expense allowances divided by its adjusted surplus account. The smaller this ratio, the more financially sound the insurance company, since ...
Statute in most states under which, if no evidence exists in a common disaster (when an insured and beneficiary die within a short time of each other in an accident for which determination ...
Combination of contributions of many investors whose money is used to buy stocks, bonds, commodities, options, and/or money market funds, or precious metals such as gold, or foreign ...
Have a question or comment?
We're here to help.