(A) The rates, rating plans, and rating rules applicable to the insurance written by the association are those approved for use of the association by the director or his designee. Surcharges may be used as approved by the director or his designee. Rates may include rules for classification of risks insured under the provisions of this article and rate modifications of it.
(B) As a residual market mechanism, the association is not intended to offer rates competitive with the admitted market. Rates for policies issued by the association must be adequate and established at a level that permits the association to operate as a self-sustaining mechanism. The association shall maintain the necessary rate-making data in order to permit the actuarial determination of rates and rating plans appropriate for the business insured by the association. The association shall monitor rate adequacy and shall notify the director semi-annually to enable the director to take corrective action by an order. Rates adjusted by a corrective action order are exempt from the twelve-month limitation requirement of Section 38-73-920. The corrective action order is subject to judicial review by the Administrative Law Court.
HISTORY: Former 1976 Code Section 38-39-100 [1962 Code Section 37-779; 1971 (57) 744] recodified as Section 38-75-400 by 1987 Act No. 155, Section 1; 1993 Act No. 181, Section 793; 2007 Act No. 78, Section 10, eff June 11, 2007, applicable to taxable years beginning after December 31, 2006.