20-1621.05. Reasonableness of benefits in relation to premium charged

A. An insurer's premium rates shall be reasonable in relation to the benefits provided and shall not be excessive, inadequate or unfairly discriminatory.

B. At least once every three years, the director shall establish by order a loss ratio standard. In establishing the loss ratio standard, the director shall consider the standard prescribed in subsection A of this section and the actual and expected loss experience of insurers, including a reasonable catastrophe provision. The director shall also consider other rate components, including reasonable general and administrative expenses, reasonable acquisition expenses, reasonable creditor compensation, investment income, premium taxes, licenses, fees, assessments and reasonable underwriting profit and contingencies.

C. Concurrently with the establishment of a loss ratio standard pursuant to subsection B of this section, the director, by order, shall establish prima facie rates. If an insurer's actual rates do not exceed the prima facie rates, the insurer's rates are presumed not to be excessive and the insurer is not required to file its rates with the director, subject to the following:

1. On or before April 1 of each year, on a form prescribed by the director, the insurer shall certify to the director that the rates currently applied by the insurer do not exceed the prima facie rates and that the rates are not inadequate or unfairly discriminatory. The insurer shall also state the actual rates then in effect. If the insurer changes the rates before the next April 1, the insurer shall file an amended certification with the director.

2. At any time the director may require the insurer to make rate filings according to section 20-1621.04.

D. The reasonable cost of actuarial or other professional services necessary to perform the duties required by this section are chargeable as examination expenses pursuant to section 20-159 and shall be allocated among insurers transacting credit property insurance or credit unemployment insurance in this state in proportion to the relative amounts of combined direct credit property and credit unemployment insurance premiums received in this state for the calendar year immediately before the date of the director's order pursuant to this section.