P&CNJmedium
Under NJ rate regulation, a P&C rate is considered 'inadequate' when which of the following is most accurate?
AAny policyholder requests a lower premium, regardless of actuarial soundness or competitive impact on the NJ insurance marketplace
The rate is insufficient to sustain projected losses and expenses or would tend to substantially lessen competition
CThe rate is identical to another insurer's filed rate
DThe rate is lower than the prior year's filed rate
Why this is the answer
N.J.S.A. 17:29A-4 prohibits not only unreasonably high rates but also rates inadequate for the safety and soundness of the insurer. DOBI applies this prong to prevent destructive underpricing that could destabilize the NJ market, regardless of whether individual consumers would prefer the lower premium.
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