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.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: Insurance, Regulation, Flexible Rate Filing Regulation
• Subjects: L - Industrial Organization > L5 - Regulation and Industrial Policy; G - Financial Economics > G2 - Financial Institutions and Services > G22 - Insurance ; Insurance Companies ; Actuarial Studies; G - Financial Economics > G2 - Financial Institutions and Services > G28 - Government Policy and Regulation

References

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Eley, David, 2000. "Rate and Form Regulation in the Twenty-First Century." Journal of Insurance Regulation 18(3): 277.

Insurance Information Institute, 2008, III-Regulation Modernization. http://www.iii.org/media/hottopics/insurance/ratereg/ (accessed January 24, 2008).

New York Codes, Rules and Regulations (NYCRR), Regulation No. 153 (11 NYCRR 163) Section 163.2(e)

Property Casualty Insurers Association of America, 2007, Rate Regulation Laws for Personal Automobile Insurance. http://www.pciaa.net/sitehome.nsf/lcpublic/26/$file/rate%20regulation%20personal%20auto.pdf (accessed January 26, 2008).