The C Insurance Company has another idea. It has information that shows that people who protest…
The C Insurance Company has another idea. It has information that shows that people who protest against vaccines and masks, and especially people who go to city hall meetings and school board hearings and yell and threaten, have more liability claims than other people. (Claims against the homeowner’s insurance for liability, and claims against the auto insurance for bad and aggressive driving that causes an accident.) C proposes to charge these people more.
a.What must C show to get this rate increase approved?
b.What concerns might the insurance regulator have about this proposal?
c.Evaluate whether this proposed rate would meet the criteria for insurance rates.
The state department of insurance decides it wants to examine A Insurance Company’s underwriting files. The insurance regulator has the feeling that A Company does some unconventional pricing. Explain what this examination will likely involve.