§ 26.1-25-03 — Making of rates

1. Rates must be made in accordance with the following provisions:
a. Due consideration must be given to past and prospective loss experience within
this state and outside this state to the extent that the consideration is given to
areas the commissioner determines are representative of this state, to any
conflagration and catastrophe hazards, to a reasonable margin for profit and
contingencies, to dividends, savings, or unabsorbed premium deposits allowed or
returned by insurers to their policyholders, members, or subscribers, to past and
prospective expenses both countrywide, as determined by the commissioner, and
those specially applicable to this state, and to all other relevant factors within and
outside this state. In the case of fire insurance rates, consideration must be given
to the experience of the fire insurance business during a period of not less than
the most recent five-year period for which the experience is available. In
determining the reasonableness of the profit, consideration may be given to
investment income.
b. 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 group 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.
c. Risks may be grouped by classifications 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. The standards
may measure any differences among risks that can be demonstrated to have a
probable effect upon losses or expense. No risk classification, however, may be
based upon race, creed, national origin, or the religion of the insured.
d. Rates may not be excessive, inadequate, or unfairly discriminatory.
2. Except to the extent necessary to meet subdivision d of subsection 1, uniformity
among insurers in any matters within the scope of this section is neither required nor
prohibited.
3. Rates made in accordance with this section may be used subject to this chapter.