§ 4684. Competitive market
(a) A competitive market in a type of insurance subject to this chapter is presumed to
exist unless:
(1) the Commissioner, after notice and hearing, determines and orders that a reasonable
degree of competition does not exist in the market;
(2) the average annual increase in premiums or rates in the market is 25 percent or more
as determined and noticed by the Commissioner; or
(3) an insurer uses a claims made liability insurance policy form or endorsement.
(b) The Commissioner shall conduct hearings to determine whether a reasonable degree of
competition exists whenever, in any market over any 12-month period, the average rates
or premiums increase at least 15 percent, but less than 25 percent, over the average
rate or premiums for the immediately preceding 12-month period for that market. The
Commissioner shall not be obligated to hold hearings under this subsection if, based
on the information available to him or her under subsection 4688(a) of this title and other sources, the Commissioner determines that a competitive market continues
to exist.
(c) Upon a determination of an increase in rates or premiums of 25 percent or more under
subdivision (a)(2) of this section, the Commissioner may issue a notice that a reasonable
degree of competition does not exist. Insurers may use their currently filed rates
for only 120 calendar days after such notice, unless the Commissioner determines that
it is in the consumer’s best interests to extend this time period.
(d) A competitive market does not exist if an insurer uses a claims made liability insurance
policy form or endorsement. Insurers writing insurance on a claims made basis are
subject to the prefiling requirements of subdivision 4688(c)(1) of this title.
(e) The rates or premiums in a noncompetitive market shall be subject to the prefiling
requirements set forth in subdivision 4688(c)(1) of this title.
(f) An order or notice that a noncompetitive market exists under subdivisions (a)(1) and
(2) of this section shall expire not later than two years after the order or notice
issues unless the Commissioner earlier rescinds the order or notice, or continues
the order or notice upon a further determination that a reasonable degree of competition
does not exist. Such further determination shall be preceded by public notice, but
may be made without a hearing unless requested by an interested party.
(g) In determining whether a reasonable degree of competition exists under subdivision
(a)(1) of this section, the Commissioner shall consider relevant structural and functional
factors in determining the competitiveness of the market, including: the number of
insurers actively engaged in providing coverage; market shares; and ease of entry. (Added 1983, No. 238 (Adj. Sess.), § 1; 1985, No. 265 (Adj. Sess.), § 1, eff. June 4, 1986; 1987, No. 185 (Adj. Sess.), § 1, eff. May 5, 1988; 1989, No. 128 (Adj. Sess.), § 2; amended 2021, No. 105 (Adj. Sess.), § 219, eff. July 1, 2022.)