15) What different types of control exist on automobile rates?
a) Prior Approval – companies file their proposed rates and must wait for approval before using them
b) File and use – companies file proposed rates and use them as proposed, but may face enquires by the board( used in British Columbia)
c) File and use following a “deemer”period – companies file their proposed rates and the law allows a period of time, such as 30 or 60 days, during which the board can challenge them. Following this period, the company can use the unchallenged rates as they are then deemed to be approved.
d) Prior setting of rates by the board with variations from “benchmark” – the board sets the rates and these are known as the benchmark. Insurers can use the benchmark rates or vary them, based on a board-approved percentage. If an insurer wishes to deviate up or down from the benchmark, or vary the classes or other rating factors, a board hearing is usually required – this may take the form of a public hearing. The board then allows, disallows, or varies the application.