§ 31A-19a-201. Rate standards.

(1) Rates may not be excessive, inadequate, or unfairly discriminatory. (2) (a) Rates are not excessive if a reasonable degree of price competition exists at the consumer level with respect to the class of business to which they apply. In determining whether a reasonable degree of price competition exists, the commissioner shall consider: (i) relevant tests of workable competition pertaining to: (A) market structure; (B) market performance; and (C) market conduct; and (ii) the practical opportunities available to consumers in the market to: (A) acquire pricing and other consumer information; and (B) compare and obtain insurance from competing insurers. (b) The tests described in Subsection (2)(a) include: (i) the size and number of insurers actively engaged in the market and class of business; (ii) the market shares of insurers actively engaged in the market and changes in market shares; (iii) the existence of rate differentials in that class of business; (iv) ease of entry and latent competition of insurers capable of easy entry; (v) availability of consumer information concerning the product and sales outlets or other sales mechanisms; and (vi) efforts of insurers to provide consumer information. (c) If reasonable price competition does not exist, rates are excessive if: (i) rates are likely to produce a long-term profit that is unreasonably high in relation to the riskiness of the class of business; or (ii) expenses are unreasonably high in relation to the services rendered. (3) Rates are inadequate if: (a) they are clearly insufficient, when combined with the investment income attributable to them, to sustain the projected losses and expenses in the class of business to which they apply; and (b) the use of such rates has or, if continued, will have: (i) the effect of substantially lessening competition; or (ii) the tendency to create a monopoly in any market. (4) (a) A rate is unfairly discriminatory if price differentials fail to equitably reflect the differences in expected losses and expenses after allowing for practical limitations. (b) A rate is not unfairly discriminatory if it is averaged broadly among persons insured under a: (i) group, franchise, or blanket policy; or (ii) mass marketed plan.