§ 27-1-22-3 — Guidelines for establishing rates; uniformity; fleet or fleet policy

(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.