§ 58-40-25. Rating methods.
§ 58‑40‑25. Rating methods.
In determining whether ratescomply with the standards under G.S. 58‑40‑20, the followingcriteria shall be applied:
(1) Due considerationshall be given to past and prospective loss and expense experience within thisState, to catastrophe hazards, to a reasonable margin for underwriting profitand contingencies, to trends within this State, to dividends or savings to beallowed or returned by insurers to their policyholders, members, orsubscribers, and to all other relevant factors, including judgment factors;however, regional or countrywide expense or loss experience and other regionalor countrywide data may be considered only when credible North Carolina expenseor loss experience or other data is not available.
(2) Risks may be groupedby classifications for the establishment of rates and minimum premiums.Classification rates may be modified to produce rates for individual risks inaccordance with rating plans which establish standards for measuring variationsin hazards or expense provisions, or both. Those standards may measure anydifferences among risks that have probable effect upon losses or expenses.Classifications or modifications of classifications of risks may be establishedbased upon size, expense, management, individual experience, location ordispersion of hazard, or any other reasonable considerations. Thoseclassifications and modifications shall apply to all risks under the same orsubstantially the same circumstances or conditions.
(3) The expense provisionsincluded in the rates to be used by an insurer may reflect the operatingmethods of the insurer and, as far as it is credible, its own expenseexperience.
(4) In the case ofproperty insurance rates under this Article, consideration shall be given to theinsurance public protection classifications of fire districts established bythe Commissioner. The Commissioner shall establish and modify from time to timeinsurance public protection districts for all rural areas of the State and forcities with populations of 100,000 or fewer, according to the most recentannual population estimates certified by the State Budget Officer. Inestablishing and modifying these districts, the Commissioner shall usestandards at least equivalent to those used by the Insurance Services Office,Inc., or any successor organization. The standards developed by theCommissioner are subject to Article 2A of Chapter 150B of the General Statutes.The insurance public protection classifications established by the Commissionerissued pursuant to the provisions of this Article shall be subject to appeal asprovided in G.S. 58‑2‑75, et seq. The exceptions stated in G.S. 58‑2‑75(a)do not apply. (1977,c. 828, s. 2; 1985 (Reg. Sess., 1986), c. 1027, s. 16; 1991, c. 644, s. 40;2000‑176, s. 2; 2004‑203, s. 5(b).)