2005 West Virginia Code - §23-2C-18. — Ratemaking; Insurance Commissioner.

§23-2C-18. Ratemaking; Insurance Commissioner.
(a) For the fiscal year beginning the first day of July, two thousand six, the company shall charge the actuarially determined base rates for the fiscal year. The base rates shall be calculated by the company and submitted for approval by the Insurance Commissioner.
(b) For the fiscal year beginning the first day of July, two thousand seven, the company shall charge the actuarially determined base rates for said fiscal year. The base rates shall be calculated by the company and submitted for approval by the Insurance Commissioner.
(c) Effective for the fiscal year beginning the first day of July, two thousand eight, all private carriers' rates shall be governed by the following:
(1) For the period beginning on first day of July, two thousand eight, and ending on the thirtieth day of June, two thousand nine, no more than five percent variance from the base rates established by the Insurance Commissioner.
(2) For the period beginning on the first day of July, two thousand nine, and ending on the thirtieth day of June, two thousand ten, no more than ten percent variance from the base rates established by the Insurance Commissioner.
(d) For the period beginning on the first day of July, two thousand six through the thirtieth day of June, two thousand ten, the company and, when applicable, a private carrier, may continue to calculate experience modification factors and other related rating modification methodologies to adequately insure individual employer risks.
(e) The variances provided in this section are only applicable to base rates and shall be exclusive of experience modification and other related adjustments, including surcharges imposed by this chapter.
(f) For the period beginning the first day of July, two thousand ten, and thereafter, the Insurance Commissioner shall set base rates for approved classifications and thereafter in accordance with rules established in accordance with subsection nine of this section. Said rates shall be released to the public at least ninety days prior to the first day of July each year. Within thirty days from this release date, private carriers shall submit to the Insurance Commissioner their proposed rates, which may be higher than the base rates established by the Insurance Commissioner. The Insurance Commissioner retains authority to disapprove rates in effect if it is determined that the rates are not in compliance with the following:
(1) Rates must not be excessive, inadequate or unfairly discriminatory, nor may an insurer charge any rate which if continued will have or tend to have the effect of destroying competition or creating a monopoly.
(2) The Insurance Commissioner may disapprove rates if there is not a reasonable degree of price competition at the consumer level with respect to the class of business to which they apply. In determining whether a reasonable degree of price competition exists, the Insurance Commissioner shall consider all relevant tests, including:
(A) The number of insurers actively engaged in the class of business and their shares of the market;
(B) The existence of differentials in rates in that class of business;
(C) Whether long-run profitability for private carriers generally of the class of business is unreasonably high in relation to its risk;
(D) Consumers' knowledge in regard to the market in question; and
(E) Whether price competition is a result of the market or is artificial. If competition does not exist, rates are excessive if they are likely to produce a long-run profit that is unreasonably high in relation to the risk of the class of business, or if expenses are unreasonably high in relation to the services rendered.
(3) Rates are inadequate if they are clearly insufficient, together with the income from investments attributable to them, to sustain projected losses and expenses in the class of business to which they apply.
(4) One rate is unfairly discriminatory in relation to another in the same class if it clearly fails to reflect equitably the differences in expected losses and expenses. Rates are not unfairly discriminatory because different premiums result for policyholders with similar exposure to loss but different expense factors, or similar expense factors but different exposure to loss, so long as the rates reflect the differences with reasonable accuracy. Rates are not unfairly discriminatory if they are averaged broadly among persons insured under a group, franchise or blanket policy.
(g) The rate-making provisions and premium provisions contained in article two of this chapter shall not be applicable to the company or other private carriers. The Workers' Compensation Board of Managers, in consultation with the Insurance Commissioner, shall issue an exempt legislative rule to govern ratemaking and premium collection by the company and other private carriers.