{"data":{"id":"us-ky/krs-304.13-011","jurisdiction":"us-ky","citation":"KRS 304.13-011","heading":"Definitions for subtitle.","body":"As used in this subtitle, unless the context requires otherwise:\n(1) A \"market\" is the interaction between buyers and sellers consisting of a product\nmarket component and a geographic market component. A product market\ncomponent consists of identical or re adily substitutable products including but not\nlimited to consideration of coverage, policy terms, rate classifications, and\nunderwriting. A geographic market component is a geographical area in which\nbuyers have a reasonable degree of access to insurance sales outlets. Determination\nof a geographic market component shall consider existing market patterns;\n(2) \"Supplementary rating information\" includes any manual or plan of rates,\nclassification, rating schedule, minimum premium, policy fees, rating rules,  or any\nother similar information needed to determine the applicable rate or premium. This\nshall include underwriting rules, but only to the extent necessary to determine the\nrate or premium that will be applicable to a risk should the insurer decide to provide\ncoverage. This does not include guidelines that relate to the selection of those risks\nthat are acceptable to an insurer;\n(3) \"Supporting information\" is the experience and judgment of the filer and the\nexperience or data of other insurers or organiz ations relied on by the filer, the\ninterpretation of any other data relied on by the filer, descriptions of methods used\nin making the rates, and any other information required to be filed by the\ncommissioner;\n(4) \"Personal risks\" means homeowners, tenants , private passenger nonfleet\nautomobiles, mobile homes, and other property and casualty insurance for personal,\nfamily, or household needs;\n(5) \"Commercial risks\" are any kinds of risks that are not personal risks;\n(6) \"Joint underwriting\" is a voluntary a rrangement established to provide insurance\ncoverage for a risk pursuant to which two (2) or more insurers jointly contract with\nthe insured at a price and under policy terms agreed on between the insurers;\n(7) A \"pool\" is a voluntary arrangement, other th an by a contract of reinsurance,\nestablished on a general and continuing basis pursuant to which two (2) or more\ninsurers participate in the sharing of risks on a predetermined basis. A pool may\noperate through an association, syndicate or other pooling agreement;\n(8) A \"residual market mechanism\" is an agreement, either voluntary or mandated by\nlaw, involving participation by insurers in the equitable apportionment among them\nof insurance that may be afforded applicants who are unable to obtain insurance\nthrough ordinary methods;\n(9) An \"advisory organization\" is any entity, including its affiliates or subsidiaries,\nwhich either has two (2) or more member insurers or is controlled either directly or\nindirectly by two (2) or more insurers and which assists i nsurers in ratemaking\nrelated activities. Two (2) or more insurers having a common ownership or\noperating in this state under common management or control constitute a single\ninsurer for purposes of this definition;\n(10) A \"competitive market\" is a market that has not been found to be noncompetitive\npursuant to KRS 304.13-041 and for which no such order is in effect;\n(11) A \"noncompetitive market\" is a market for which there is an order in effect pursuant\nto KRS 304.13-041 that a reasonable degree of competition does not exist;\n(12) \"Trending\" is any procedure for projecting developed losses to the average date of\nloss, or premiums or exposures to the average date of writing, for the period during\nwhich the policies are to be effective;\n(13) \"Expenses\" are t hose portions of any rate attributable to acquisition, field\nsupervision, and collection expenses, general expenses, and premium taxes,\nlicenses, and fees;\n(14) \"Profit\" is the portion of any rate attributable to funds needed for growth,\ncontingencies, and return to stockholders;\n(15) \"Pure premium\" means the loss cost per unit of exposure excluding all loss\nadjustment expenses;\n(16) \"Classification system\" or \"classification\" means the process of grouping risks with\nsimilar risk characteristics so that differences in cost may be recognized;\n(17) \"Developed losses\" means losses (including loss adjustment expenses) adjusted,\nusing standard actuarial techniques, to their ultimate anticipated value;\n(18) \"Experience rating\" means a rating procedure utilizing past insurance experience of\nthe individual policyholder to forecast future losses by measuring the policyholder's\nloss experience against the loss experience of p olicyholders in the same\nclassification to produce a prospective premium credit, debit, or unity modification;\n(19) \"Form provider\" means a person who prepares, files, and distributes policy contract\nforms and endorsements and consults with members, subscr ibers, customers, or\nothers relative to their use and application, but is not an advisory organization as\ndefined in this subtitle;\n(20) \"Loss adjustment expenses\" means the expenses incurred by the insurer in the\ncourse of settling claims;\n(21) \"Prospective loss costs\" means that portion of a rate that does not include provisions\nfor expenses (other than loss adjustment expenses) or profit, and are based on\nhistorical aggregate losses or output from simulation models and loss adjustment\nexpenses adjusted t hrough development to their ultimate value and projected\nthrough trending to a future point in time. Loss costs, derived in part or entirely\nupon output form simulation models, must be approved by the commissioner before\nthey become effective;\n(22) \"Rate\" means the expected value of the future cost of insurance per exposure unit\nwhich accounts for the treatment of losses, expenses, and profit prior to any\napplication of individual risk variations based on loss or expense considerations, but\ndoes not include minimum premium;\n(23) \"Special assessments\" means guaranty fund assessments, residual market\nmechanism assessments, and other similar assessments which are included in\nratemaking. Special assessments shall not be considered as either expenses or\nlosses. Additional charges collected by the insurer and returned to a governmental\nagency on behalf of an insured are not special assessments. Examples of these\nadditional charges include, but are not limited to, the special fund charge for\nworkers' compensation im posed by KRS Chapter 342, local government premium\ntax imposed by KRS 91A.080, and the Department of Revenue surcharge imposed\nby KRS Chapter 136; and\n(24) \"Statistical agent\" means an entity that has been licensed by the commissioner to\ncollect statistics from insurers and provide reports developed from these statistics to\nthe commissioner for the purpose of fulfilling the statistical reporting obligations of\nthose insurers under this chapter.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=17046","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:57:42Z","sha256":"116b73c9191f1aef6b84b703a88abc279ee09fc1e1c8c4910b9522e78f64fc4e","source_id":"us-ky","stale":false,"prev":"us-ky/krs-304.13-010","next":"us-ky/krs-304.13-020"},"notice":"GroundRules: Original legal text. Not legal advice."}