MISSISSIPPI LEGISLATURE
2006 Regular Session
To: Insurance
By: Representative Baker (74th)
AN ACT TO AMEND SECTION 83-2-3, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT NO INSURER MAY RAISE THE RATES ON AN AUTOMOBILE INSURANCE POLICY SOLELY BECAUSE ITS INSURED IS IN AN AUTOMOBILE ACCIDENT IF THE INSURED IS ADJUDICATED TO BE NOT AT FAULT IN THE ACCIDENT; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 83-2-3, Mississippi Code of 1972, is amended as follows:
83-2-3. (1) Rates shall comply with the following standards:
(a) Rates shall not be excessive, inadequate or unfairly discriminatory.
(b) A rate is excessive if it is likely to produce a profit that is unreasonably high for the insurance provided or if the expense provision included therein is unreasonably high in relation to the services rendered.
(c) A rate is inadequate if it threatens the solvency of the insurance company or tends to create a monopoly.
(d) Unfair discrimination exists if, after allowing for practical limitations, price differentials fail to reflect equitably the differences in expected losses and expenses. A rate is not unfairly discriminatory because different premiums result for policyholders with like loss exposures with different expenses, or like expenses but different loss exposures, so long as the rate reflects the differences with reasonable accuracy.
(2) In determining whether rates comply with the standards set forth in subsection (1), the following criteria shall apply:
(a) Due consideration shall be given to past and prospective loss and expense experience within and outside this state; to catastrophe hazards; to any residual market loss redistributions and other similar obligations; to a reasonable provision for profit and contingencies; to trends within and outside this state; to loadings for leveling premium rates over a reasonable period of time or for dividends or savings to be allowed or returned by insurers to their policyholders, members or subscribers; and to all other relevant factors, including the judgment of the filer.
(b) Risks may be classified in any reasonable way for the establishment of rates except that no risks may be grouped by classifications based in whole or in part on race, color, creed, or national origin of the risk. Rates may be modified for individual risks in accordance with rating plans or schedules which provide for recognition of probable variations in hazards, expenses or both.
(c) The systems of expense provisions included in rates for use by an insurer or group of insurers may differ from those of other insurers or group of insurers to reflect the operating methods of such insurer or group with respect to any kind of insurance, or with respect to any subdivision or combination thereof.
(d) Any homeowners' insurance policy filed with the Commissioner of Insurance that offers a percentage deductible for the peril of windstorm from a named storm shall offer a buy-back provision for that deductible which is actuarially sound; however, the Commissioner of Insurance may grant a waiver from the mandatory buy-back provision in accordance with the following procedure and criteria:
(i) An insurance company shall make a formal filing requesting a waiver from the buy-back provision requirement with the Commissioner of Insurance.
(ii) An insurance company shall submit written proof in its formal filing as to why it is in the best interest of Mississippi policyholders to receive a waiver from the buy-back provision requirement and shall provide any supporting documentation requested by the commissioner deemed appropriate to make his decision.
(iii) All expenses incurred by the Commissioner of Insurance or his designee in determining the validity of the waiver request shall be borne by the petitioning insurer. Such expenses may include, but not be limited to, the cost of reviewing the filing by actuaries, and if the commissioner deems a public hearing appropriate, the cost of a facility, the cost of publicity and the cost of a court reporter for the hearing.
(e) For automobile insurance policies, as defined in Section 83-11-1, no insurer may raise the rates of its insured solely because the insured is in an automobile accident if the insured is adjudicated to be not at fault in the accident.
SECTION 2. This act shall take effect and be in force from and after July 1, 2006.