Rhode Island § 27-44-4 - Casualty, Liability and Fire and Marine Insurance Rating

§ 27-44-4. Competitive market.

(a) A competitive market is presumed to exist unless the director, after a hearing, determines that a reasonable degree of competition does not exist in the market and issues a ruling to that effect. The ruling shall remain in effect until the time the director deems that a competitive market exists, and issues a ruling to that effect. The director may, without a hearing, make a ruling that a competitive market exists based upon a departmental analysis of the market. Notwithstanding the foregoing, any insurer may request a hearing before the director to present evidence that competition exists in the affected market after a ruling of noncompetition has been in effect for at least one year.

(b) In determining whether a reasonable degree of competition exists, the director shall consider relevant tests of workable competition pertaining to market structure, market performance, and market conduct, and the practical opportunities available to consumers in the market to acquire pricing and other consumer information and to compare and obtain insurance from competing insurers. The tests may include, but are not limited to, the following: size and number of firms actively engaged in the market; market shares and changes in the market shares of firms; ease of entry and latent competition of insurers capable of easy entry and exit from a given market; underwriting restrictions; whether profitability for companies generally in the market is unreasonably high; availability of consumer information concerning the product and sales outlets or other sales mechanisms; existence of a degree of rate differential within a class of business; and efforts of insurers to provide consumer information. The determination of competition involves the interaction of the various tests, and the weight given to specific tests depends upon the particular situation and pattern of tests results.