Current through Register Vol. 50, No. 9, March 1, 2024
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
304.2-110 provides that the Commissioner of
Insurance may make reasonable administrative regulations necessary for or as an
aid to the effectuation of any provision of the Kentucky Insurance Code. This
administrative regulation prescribes the rate standards which must be met by
property and casualty insurance rate filings subject to the "flex rating"
provisions of
KRS
304.13-051.
Section 1. Property and casualty insurance
rates subject to prior approval by the Commissioner of Insurance under
KRS
304.13-051(5)(b) shall be
made in accordance with the following provisions:
(1) Manual, minimum, class rates, rating
schedules, or rating plans shall be made and adopted, except in the case of
specific inland marine rates on risks specially rated;
(2) Rates shall not be excessive, inadequate,
or unfairly discriminatory; and
(3)
Due consideration shall be given:
(a) To past
and prospective loss experience within and outside this state;
(b) To conflagration and catastrophe
hazards;
(c) To a reasonable margin
for underwriting profit and contingency;
(d) To dividends, savings, or unabsorbed
premium deposits allowed or returned by insurers to their policyholders,
members, or subscribers;
(e) To
past and prospective expenses, both countrywide and those specially applicable
to this state;
(f) To all other
relevant factors within and outside this state; and
(g) In the case of fire insurance rates,
consideration may be given to the experience of the fire insurance business
during a period of not less than the most recent three (3) year period for
which such experience is available;
(4) The systems of expense provisions
included in the rates for use by insurer or group of insurers may differ from
those of other insurers or group of insurers to reflect the requirements of the
operating methods of any such insurer or group with respect to any kind of
insurance or with respect to any subdivision or combination thereof for which
subdivision or combination separate expense provisions are applicable;
and
(5) Risks may be grouped by
classifications for the establishment of rates and minimum premiums.
Classification rates may be modified to produce rates for individual risks in
accordance with rating plans which establish standards for measuring variations
in hazards or expense provisions, or both. Such standards may measure any
differences among risks which may have a probable effect upon losses or
expenses.
Section 2.
This administrative regulation shall become effective upon completion of its
review pursuant to KRS Chapter 13A.
