The Vermont Statutes Online

Title 8 : Banking and Insurance

Chapter 128 : Property and Casualty Insurance Rate Regulation

Subchapter 001 : INSURANCE RATES AND STATISTICS

• § 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.)