                                 CODE OF VIRGINIA

USE OF RATES (§ 38.2-3728)

A. Use of prima facie rates. An insurer that files rates or has rates on file
that are not in excess of the prima facie rates set forth in &#xA7; 38.2-3726 or
published as set forth in &#xA7; 38.2-3727, to the extent adjusted pursuant to
&#xA7; 38.2-3730, may use those rates without further proof of their
reasonableness.

B. Use of rates higher than prima facie rates. An insurer may file for approval
of and use rates that are higher than the prima facie rates set forth in &#xA7;
38.2-3726 or published as set forth in &#xA7; 38.2-3727, to the extent adjusted
by &#xA7; 38.2-3730. In order to use these higher rates, it shall be
demonstrated to the satisfaction of the Commission that the use of such higher
rates will result in a ratio of claims incurred to premiums earned (assuming the
use of such higher rates) that is not less than the loss ratios as required by
&#xA7; 38.2-3725 D and E for those accounts to which such higher rates apply and
that such upward deviations will not result on a statewide basis for that
insurer of a ratio of claims incurred to premiums earned of less than the
expected loss ratio underlying the current prima facie rate developed or
adjusted pursuant to &#xA7; 38.2-3730. Deviations effective for 1993 and 1994
for credit life insurance shall be derived based upon a fifty percent loss
ratio.
			If rates higher than the prima facie rates provided for in &#xA7;&#xA7;
38.2-3726 and 38.2-3727, to the extent adjusted pursuant to &#xA7; 38.2-3730,
are filed for approval, the filing shall specify the account or accounts to
which such rates apply. Such rates may be applied on an equitable basis approved
by the Commission to only one or more accounts specified by the insurer for
which the experience has been less favorable than expected.

C. Approval period of deviated rates.

   1. A deviated rate will be in effect for a period of time not longer than the
   experience period used to establish such rate. In no event will deviated rates
   remain in effect after the effective date that new prima facie rates are
   effective as set forth in &#xA7; 38.2-3730.

   2. Notwithstanding subsection A of this section, the prima facie rates shall
   be employed in the event that the account becomes insured by another insurer.

D. As used in this section:

   1. &#8220;Experience&#8221; means &#8220;earned premiums&#8221; and
   &#8220;incurred claims&#8221; during the experience period.

   2. &#8220;Experience period&#8221; means the most recent period of time for
   which experience is reported, but not for a period longer than three full
   years.

   3. &#8220;Incurred claims&#8221; means total claims paid during the experience
   period, adjusted for the change in claim reserve.

HISTORY: 1992, c. 586.