Insurance, Administration

Rule R590-121

Rate Modification Plan Rule

Five-Year Notice of Review and Statement of Continuation

DAR File No.: 35570
Filed: 12/22/2011 02:59:39 PM

NOTICE OF REVIEW AND STATEMENT OF CONTINUATION

Concise explanation of the particular statutory provisions under which the rule is enacted and how these provisions authorize or require the rule:

Subsections 31A-2-201(3) and (4), General Duties and Powers, give the commissioner authority to write rules to implement the provisions of Title 31A of the Utah Code; Section 31A-2-203, Examinations, authorizes the commissioner to make rules pertaining to the financial condition and market regulation surveillance systems; Section 31A-2-204, Conduct of Examinations, deals with the conduct of an examination of an insurer by the department, what is contained in the order, accessing licensees records, compliance to the examiner's requests, resolving the issue of inadequate records and the preparation and the issuance and distribution of the report; Section 31A-2-205, Examination Expenses, sets standards for setting the cost of the examination of an insurer and how and when it is to be paid; Sections 31A-19a-201, 31A-19a-202, and 31A-19a-203, Rate Standards, require a rule to set procedures for submitting rate filings electronically; and Section 31A-23a-402, Unfair Marketing Practices, allows the commissioner to define by rule insurance practices that are unfair methods of competition or deceptive acts or practices as determined after a finding of fact. The rule establishes criteria for the modification of manual rates through the application of insurer rate modification plans and to the reporting of pertinent information concerning utilization of such plans, in order to determine whether rates developed meet the standards of the rating law.

Summary of written comments received during and since the last five-year review of the rule from interested persons supporting or opposing the rule:

No written comments have been received by the department during the past five years.

Reasoned justification for continuation of the rule, including reasons why the agency disagrees with comments in opposition to the rule, if any:

This rule gives guidance to licensees about how they can develop alternative rating plans. The rule establishes criteria that must be applied to all policies written outside of a standard rating structure. This rule establishes guidelines that reduce the possibility of unfair rating by property and casualty insurance companies and rate service organizations. Therefore, this rule should be continued.

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Direct questions regarding this rule to:

• Jilene Whitby at the above address, by phone at 801-538-3803, by FAX at 801-538-3829, or by Internet E-mail at jwhitby@utah.gov

Authorized by:

Jilene Whitby, Information Specialist

Effective:

12/22/2011