KRS 304.13-031: Rate standards in noncompetitive market.

(1) In a noncompetitive market, rates shall be made in accordance with the following

provisions:

(a) Manual, minimum, class rates, rating schedules or rating plans, shall be made

and adopted, except in the case of specific inland marine rates on risks

specially rated;

(b) Rates shall not be excessive, inadequate or unfairly discriminatory;

(c) Due consideration shall be given:

1. To past and prospective loss experience within and outside this state;

2. To the conflagration and catastrophe hazards;

3. To a reasonable margin for underwriting profit and contingencies;

4. To dividends, savings or unabsorbed premium deposits allowed or

returned by insurers to their policyholders, members or subscribers;

5. To past and prospective expenses both countrywide and those s pecially

applicable to this state;

6. To all other relevant factors within and outside this state; and

7. In the case of fire insurance rates, consideration may be given to the

experience of the fire insurance business during a period of not less than

the most recent three (3) year period for which such experience is

available;

(d) The expense provisions included in the rates for use by any insurer or group of

insurers shall reflect the requirements of the operating methods of any such

insurer or group and its anticipated expenses, with respect to any kind of

insurance or with respect to any subdivision or combination thereof for which

subdivision or combination separate expense provisions are applicable;

(e) Risks may be grouped by classifications for the establishment of rates and

minimum premiums. Classification rates may be modified to produce rates for

individual risks in accordance with rating plans which establish standards for

measuring variations in ha zards or expense provisions, or both. Such

standards may measure any differences among risks which can be

demonstrated to have a probable effect upon losses or expenses. Rates made

in accordance with this section may be used subject to this subtitle.