Munich Personal RePEc Archive

Flexible Rate Filing Insurance Rate Regulation as Alternative to Incentive Incompatibility in Prior-Approval

Strauss, Jason (2008): Flexible Rate Filing Insurance Rate Regulation as Alternative to Incentive Incompatibility in Prior-Approval.

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Abstract

Competition can be an effective regulator of rates in property-casualty insurance markets. While many states have moved to file-and-use or use-and-file provisions, some have adopted flexible rate-filing regulations (flex-rating) as a means of combining competitive forces with prior-approval regulation. This short note proposes a change to flex-rating so that it can be used to gradually transition a state from prior-approval to file-and-use or use-and-file.

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