(a)Rates shall not be excessive, inadequate or unfairly discriminatory.
(1)Rates in a competitive market are not excessive. Rates in a noncompetitive market are excessive if they are likely to produce a long-run profit that is unreasonably high in relation to services rendered.
(2)A rate shall not be deemed inadequate unless:
a. 1. It is clearly insufficient to sustain projected losses and expenses; and
2. The rate is unreasonably low, and the use of the rate by the insurer has had or, if continued, will tend to create a monopoly in the market; or
b. Funds equal to the full, ultimate cost of anticipated losses and loss adjustment expenses are not produced when prospective loss costs are applied to anticipated payrolls.
(3)Unfair discrimination exists if, after allowing for practi
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(a) Rates shall not be excessive, inadequate or unfairly discriminatory.
(1) Rates in a competitive market are not excessive. Rates in a noncompetitive market are excessive if they are likely to produce a long-run profit that is unreasonably high in relation to services rendered.
(2) A rate shall not be deemed inadequate unless:
a. 1. It is clearly insufficient to sustain projected losses and expenses; and
2. The rate is unreasonably low, and the use of the rate by the insurer has had or, if continued, will tend to create a monopoly in the market; or
b. Funds equal to the full, ultimate cost of anticipated losses and loss adjustment expenses are not produced when prospective loss costs are applied to anticipated payrolls.
(3) 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 different loss exposures or expense levels.
(b) In determining whether rates comply with standards under subsection (a) of this section, due consideration shall be given to:
(1) Past and prospective loss experiences within and outside this State, in accordance with accepted actuarial principles;
(2) Catastrophe hazards and contingencies;
(3) Past and prospective expenses, within and outside Delaware;
(4) Loadings for leveling premium rates over time for dividends, savings or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers;
(5) A reasonable margin for underwriting profit; and
(6) All other relevant factors within and outside Delaware.
(c) The systems of expense provisions included in the rates for use by an insurer or group of insurers may differ from those of any other insurers or groups of insurers to reflect the requirements of the operating methods of the insurer or group of insurers.
(d) The rates may contain provisions for contingencies and an allowance permitting a reasonable profit. In determining the reasonableness of a profit, consideration should be given to all investment income attributable to premiums and the reserves associated with those premiums.