YOU ASK:
What is the definition of Open Competition States?
WE ANSWER:
Open Competition States are states where insurance companies can freely set new rates and do not need to submit these to any government regulatory board for approval. It is believed that competition will be the tool that will regulate the rates. Insurance companies in competition with one another will set rates that are attractive to prospective customers.
Insurance companies in open competition states use loss experience (based on that specific geographical location) in setting the rates. However, they also have the option to use their own rates.
The only time that the state insurance commissioner can disallow the rates would be if these rates are discriminatory or are unreasonable.
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More insurance terms around open competition states:
- Operating Expenses
- Options
- Ordinance or Law Coverage
- Ordinary Life Insurance
- Original Equipment Manufacturer Parts (OEM)
- Over-The-Counter (OTC)
- Package Policy
- Paid-Up Additional Insurance Option
- Paid-Up Policy
- Partial Disability
- Ocean Marine Insurance
- Occurrence Policy
- Occupation Disease
- Nursing Home Insurance
- Nuclear Insurance
- Notice of Loss
- No-Pay, No Play
- Nonforfeiture Options
- Noncancellable and Guaranteed Renewable Policy
- Non-Admitted Insurer