Oklahoma § 36-902 - Excessive, inadequate or unfairly discriminatory rates

§ 36-902. Excessive, inadequate or unfairly discriminatory rates

A. The Insurance Commissioner shall not approve rates for

insurance which are excessive, inadequate, or unfairly

discriminatory.

1. An excessive rate is one which:

a.

is unreasonably high for the insurance provided, or

b.

is unreasonable because (1) a reasonable degree of

competition does not exist in the area with respect to

the classification to which such rate is applicable

and (2) the rate is unreasonably high for the

insurance provided.

2. An inadequate rate is one which:

a.

is (1) unreasonably low for the insurance provided and

(2) the continued use of such rate endangers, or if

continued would endanger, the solvency of the insurer,

or

b.

is (1) unreasonably low for the insurance provided and

(2) the continued use of such rate by the insurer has,

or if continued would have, the effect of destroying

competition or creating a monopoly, or

c.

is insufficient to cover projected losses, expenses

and a reasonable margin for profit for the line of

insurance coverage to be offered in this state by the

filer.

3. A rate shall not be unfairly discriminatory.

a.

A rate is not unfairly discriminatory because it is

based in part upon the establishment or modification

of classifications of risks based upon:

(1) the size of the risk,

(2) the expense or difficulty in management of the

risk,

(3) the individual experience of the risk,

(4) the location or dispersion of the risk, or

(5) any other reasonable consideration attributable

to the risk.

b.

A rate is not unfairly discriminatory in relation to

another in the same class of business if it reflects

equitably the differences in expected losses and

expenses. Rates are not unfairly discriminatory

because different premiums result for policyholders

with like loss exposures but different expense

factors, or with like expense factors but different

Oklahoma Statutes - Title 36. Insurance

loss exposures, if the rates reflect the differences

with reasonable accuracy.

c.

A rate shall be deemed unfairly discriminatory as to a

risk or group of risks if the application of premium

discounts, credits, or surcharges among such risks

does not bear a reasonable relationship to the

expected loss and expense experience among the various

risks.

d.

A rate shall never be based upon race, color, creed or

national origin.

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 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 subdivision or combination thereof for

which subdivision or combination separate expense provisions are

applicable.

C. Nothing in this act shall be construed to require uniformity

in insurance rates, classifications, rating plans, or practices.

D. Nothing in this act shall abridge or restrict the freedom of

contract of insurers, agents, brokers or employees with reference to

the commissions, compensation, or salaries to be paid to such

agents, brokers, or employees by insurers.

Added by Laws 1957, p. 243, § 902, operative July 1, 1957. Amended

by Laws 1980, c. 322, § 33, eff. Jan. 1, 1981; Laws 1986, c. 251, §

9, eff. Nov. 1, 1986; Laws 1987, c. 210, § 17, eff. July 1, 1987;

Laws 1988, c. 291, § 2, eff. Nov. 1, 1988; Laws 2006, c. 264, § 14,

eff. July 1, 2006; Laws 2024, c. 195, § 1, eff. Nov. 1, 2024.