General Insurance PrinciplesPregunta 196 de 474
A filed rate must be adequate, not excessive and not unfairly discriminatory. The rate itself is built from the expected loss cost plus:
a.reinsurance premiums returned to policyholders as dividends
b.the policy limit multiplied by the coinsurance percentage
c.expenses of doing business and an allowance for profit
d.the insured's deductible and the agent's fiduciary funds
Explicación
A rate is the price of one unit of exposure: expected losses, plus a loading for expenses such as commissions, taxes and overhead, plus profit and contingencies. Premium is then the rate times the number of exposure units. Adequacy guards solvency, the excessive test guards buyers, and unfair discrimination means charging different prices to insureds with the same expected loss. Deductibles and limits shape one policy, not the rate structure.
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