§ 27-44-4 - Competitive market.
SECTION 27-44-4
§ 27-44-4 Competitive market. – (a) A competitive market is presumed to exist unless the director, after ahearing, determines that a reasonable degree of competition does not exist inthe market and issues a ruling to that effect. The ruling shall remain ineffect until the time the director deems that a competitive market exists, andissues a ruling to that effect. The director may, without a hearing, make aruling that a competitive market exists based upon a departmental analysis ofthe market. Notwithstanding the foregoing, any insurer may request a hearingbefore the director to present evidence that competition exists in the affectedmarket after a ruling of noncompetition has been in effect for at least oneyear.
(b) In determining whether a reasonable degree of competitionexists, the director shall consider relevant tests of workable competitionpertaining to market structure, market performance, and market conduct, and thepractical opportunities available to consumers in the market to acquire pricingand other consumer information and to compare and obtain insurance fromcompeting insurers. The tests may include, but are not limited to, thefollowing: size and number of firms actively engaged in the market; marketshares and changes in the market shares of firms; ease of entry and latentcompetition of insurers capable of easy entry and exit from a given market;underwriting restrictions; whether profitability for companies generally in themarket is unreasonably high; availability of consumer information concerningthe product and sales outlets or other sales mechanisms; existence of a degreeof rate differential within a class of business; and efforts of insurers toprovide consumer information. The determination of competition involves theinteraction of the various tests, and the weight given to specific testsdepends upon the particular situation and pattern of tests results.