Match each regulatory scenario with the correct insurance rate or form regulation concept it demonstrates.
- An insurer prices a new coastal homeowners policy at a level where projected premium revenue is insufficient to cover expected losses, threatening company solvency.Inadequate Rate Violation
- An insurer charges completely different life insurance premiums to two applicants who share the exact same age, gender, health status, and occupational risk.Unfair Discrimination Violation
- An insurer files a new commercial property endorsement and begins issuing it to policyholders after the 30-day statutory waiting period expires without regulatory objection.Deemer Provision Operation
- An insurer utilizes statistically validated historical claims data to charge younger, inexperienced drivers higher auto insurance premiums than older drivers.Valid Risk Classification
Answer
The scenarios correctly map to their regulatory concepts based on statutory standards for rates and forms.
Each scenario illustrates a core principle of rate and form regulation. State laws require rates to be adequate (not threatening solvency), not excessive, and not unfairly discriminatory (treating identical risks equally). Furthermore, filing procedures frequently incorporate a deemer provision to prevent regulatory bottlenecks when approving new policy forms.
Step-by-Step Solution
Key Concept
Rates and Forms Statutory Standards