§ 4683. Definitions
As used in this chapter:
(1) “Advisory or service organization” means any person or organization that assists insurers
as authorized by section 4690 of this title, but such an organization shall not include joint underwriting organizations, actuarial
or legal consultants, a single insurer, any employees of an insurer, or insurers under
common control or management or their employees or managers.
(2) “Classification system” or “classification” means a plan, system, or arrangement for
recognizing differences in exposure to hazard among risks.
(3) “Commercial risk insurance” means insurance within the scope of this chapter that
is not:
(A) personal risk insurance; or
(B) workers’ compensation and employers’ liability insurance.
(4) “Competitive market” means a market that has not been found to be noncompetitive pursuant
to section 4684 of this title.
(5) “Expenses” means that portion of any rate attributable to acquisition, field supervision
and collection expenses, general expenses, and taxes, licenses, and fees.
(6) “Experience rating” means a rating procedure utilizing past insurance experience of
the individual policyholder to forecast future losses by measuring the policyholder’s
loss experience to produce a prospective premium credit, debit, or unity modification.
(7) “Joint underwriting” means a voluntary arrangement established on an ad hoc basis
to provide insurance coverage pursuant to which two or more insurers separately contract
with the insured at a price and under policy terms agreed upon between the insurers.
(8) “Loss cost” means the actuarially developed portion of the rate needed to cover future
losses and claims. The loss cost does not include commission expenses, other acquisition
expenses, general expenses, taxes, profit, and other contingencies.
(9) “Loss trending” means any procedure for projecting developed losses to the average
date of loss for the period during which the policies are to be effective.
(10) “Market” means the statewide interaction between buyers and sellers of a particular
line of insurance or product market component.
(11) “Noncompetitive market” means a market for which there is a ruling in effect pursuant
to section 4684 of this title that a reasonable degree of competition does not exist.
(12) “Personal risk insurance,” other than workers’ compensation and employers’ liability
insurance, means homeowners, tenants, private passenger nonfleet automobile, mobile
home, and other property and casualty insurance primarily for personal, family, or
household needs rather than for business or professional needs.
(13) “Pool” means a voluntary arrangement other than a residual market mechanism, established
on an ongoing basis, pursuant to which two or more insurers participate in the sharing
of risks on a predetermined basis. The pool may operate through an association, syndicate,
or other pooling agreement.
(14) “Pure premium rate” means that portion of the rate that represents the loss cost per
unit of exposure or loss cost per unit of insurance.
(15) “Rate” means the cost of insurance per exposure base unit, or cost per unit of insurance,
prior to the application of individual risk variations based upon loss or expense
considerations, and does not include minimum premiums.
(16) “Residual market mechanism” means an arrangement, either voluntary or mandated by
law or regulation of the Commissioner, involving participation by insurers in the
equitable apportionment among them of insurance that may be afforded applicants who
are unable to obtain insurance through ordinary methods.
(17) “Statistical plan” means a plan, system, or arrangement used in collecting insurance
or related data.
(18) “Supplementary rate information” includes any manual, schedule, or plan of rates,
classification system, rating schedule, minimum premium, policy fee, rating rule,
rating plan, or any other similar information needed or used to determine the applicable
premium in effect or to be in effect for an insured.
(19) “Supporting information” means:
(A) the experience and judgment of the filer and the experience or data of other insurers
or organizations relied upon by the filer;
(B) the interpretation of any statistical data relied upon by the filer;
(C) the description of methods used in making the rates; and
(D) any other similar information relied upon by the filer. (Added 1983, No. 238 (Adj. Sess.), § 1; amended 1989, No. 128 (Adj. Sess.), § 1.)