Sec. 3. (a) Rates shall be made in accordance with the following provisions:
(1) Due consideration shall be given to the past and prospective loss experience within and outside this state, to conflagration and catastrophe hazards, if any, to a reasonable margin for underwriting profit and contingencies, to dividends or savings allowed or returned by insurers to their policyholders or members, to past and prospective expenses both countrywide and those specifically applicable to this state, to all other relevant factors, including trend factors, within and outside this state, and in the case of fire insurance rates, to the underwriting experience of the fire insurance business during a period of not less than the most recent five (5) year period for which such experience is available and relevant.
(2) Risks may be grouped by classifications, by rating schedules, or by any other reasonable methods, for the establishment of rates and minimum premiums. Classification rates may be modified to produce rates for individual risks in accordance with rating plans which establish standards for measuring variations in hazards or expense provisions, or both. Such standards may measure any difference among risks that can be demonstrated to have a probable effect upon losses or expenses.
(3) The systems of expense provisions included in the rates for use by any insurer or group of insurers may differ from those of other insurers or groups of insurers to reflect the requirements of the operating methods of any such insurer or group with respect to any kind of insurance, or with respect to any subdivision or combination thereof for which subdivision or combination separate expense provisions are applicable.
(4) Rates shall not be excessive, inadequate, or unfairly discriminatory.
No rate shall be held to be excessive unless such rate is unreasonably high for the insurance coverage provided and a reasonable degree of competition does not exist in the area with respect to the classification to which such rate is applicable. No rate shall be held to be inadequate unless such rate is unreasonably low for the insurance coverage provided and is insufficient to sustain projected losses and expenses, or unless such rate is unreasonably low for the insurance coverage provided and the use of such rate has, or if continued, will have, the effect of destroying competition or creating a monopoly. A rating difference that results from application of a rating plan that is intended to control rate changes applicable to a current policyholder upon renewal of the policy or the transfer of a policy in force among insurers is not unfairly discriminatory, is not an unfair or deceptive act or practice in the business of insurance under IC 27-4-1-4, and is not a violation of IC 27-1-20-30.
(b) Except to the extent necessary to meet the provisions of subsection (a)(4), uniformity among insurers in any matters within the scope of this section is neither required nor prohibited.
(c) For the purpose of making rates upon automobiles and other motor vehicles under the provisions of this chapter, the terms "fleet" or "fleet policy" shall mean an insurance risk of five (5) or more automobiles and other vehicles of any kind, all owned by one (1) insured and all under one (1) direct operating management; provided, that automobiles and other motor vehicles owned by employees may not be included or insured under a fleet policy of an employer under any circumstances.
Formerly: Acts 1967, c.133, s.3. As amended by P.L.252-1985, SEC.106; P.L.55-2011, SEC.1.
Structure Indiana Code
Article 1. Department of Insurance
Chapter 22. Regulation of Insurance Rates
27-1-22-2. Application of Act; Exceptions; "Inland Marine Insurance"
27-1-22-2.5. "Commercial Policyholder" Defined
27-1-22-3. Guidelines for Establishing Rates; Uniformity; Fleet or Fleet Policy
27-1-22-5. Hearing on Question of Compliance With Filing Requirements; Finding and Order
27-1-22-6. Bad Faith Filing; Burden of Proof; Order to Rewrite Policies at Approved Rate
27-1-22-8. Rating Organizations; Definitions; License; Services to Subscribers; Rules; Cooperation
27-1-22-9. Deviation From Rates; Filing; Effective Date; Termination; Public Inspection
27-1-22-10. Insurers Acting in Concert
27-1-22-11. Appeal to Commissioner From Act or Decision of Rating Organization; Decision and Order
27-1-22-12. Procedure on Complaint by Insured
27-1-22-13. Advisory Organization; Filing and Regulation; Orders of Commissioner
27-1-22-16. Approval of Rules and Statistical Plans; Exchange of Information and Experience Data
27-1-22-17. Withholding Information; Giving False or Misleading Information
27-1-22-19. Freedom of Contract With Reference to Commissions
27-1-22-20. High Risk Auto Insurance; Apportionment Agreements; Rate Modifications
27-1-22-23. Exemption of Rates and Classifications From Law Governing Rules and Regulations
27-1-22-24. Suspension or Revocation of Licenses
27-1-22-27. Motor Vehicle Insurance; Rates for Innocent Prior-Uninsured Motorists
27-1-22-28. Title Insurance Filings; Title Insurance Rate Comparison Tool