MCA Chapter 2

in effect

Miss. Code Ann. § 83-2-1 Applicability of chapter and types of insurance excepted; definitions.

This chapter applies to all forms of property and casualty insurance on risks or operations in this state by any insurer authorized to do business in this state, except: Accident and health; Ocean marine insurance; Reinsurance; Aircraft liability and aircraft hull insurance; Title insurance; Credit accident and health insurance. As used in this chapter: “Advisory organization” means any person or organization, other than a rate service organization, which assists insurers as authorized by § 83-2-9(3). “Joint underwriting” means a voluntary arrangement established on an ad hoc basis to provide insurance coverage for a risk pursuant to which two (2) or more insurers separately contract with the insured at a price and under policy terms agreed upon between the insurers. “Pool” means a voluntary arrangement other than a residual market mechanism, established on an ongoing basis, pursuant to which two (2) or more insurers participate in the sharing of risks on a predetermined basis. The pool may operate through an association, syndicate or other pooling agreement. “Rate service organization” means any person or organization which assists insurers in ratemaking or filing as authorized by § 83-2-9. The terms “rate service organization” and “advisory organization” do not include joint underwriting organizations, actuarial, legal or other consultants, a single insurer, any employees of an insurer, or insurers under common control or management or their employees or managers. “Residual market mechanism” means an arrangement, either voluntary or mandated by law, involving participation by insurers in the equitable apportionment among them of insurance which may be afforded applicants who are unable to obtain insurance through ordinary methods. “Supplementary rate information” includes any manual or plan of rates, classification, rating schedule, minimum premium, policy fee, rating rule, and any other similar information needed to determine the applicable rate in effect or to be in effect. “Supporting information” means (i) the experience and judgment of the filer and the experience or data of other insurers or organizations relied upon by the filer, (ii) the interpretation of any statistical data relied upon by the filer, (iii) a description of methods used in making the rates, and (iv) other similar information relied upon by the filer.

Miss. Code Ann. § 83-2-3 Standards applicable to rates; criteria for determining compliance; commissioner to establish uniform policy language regarding applicability of hurricane deductibles and form of notice under certain homeowner’s insurance policies.

Rates shall comply with the following standards: Rates shall not be excessive, inadequate or unfairly discriminatory. A rate is excessive if it is likely to produce a profit that is unreasonably high for the insurance provided or if the expense provision included therein is unreasonably high in relation to the services rendered. A rate is inadequate if it threatens the solvency of the insurance company or tends to create a monopoly. Unfair discrimination exists if, after allowing for practical limitations, price differentials fail to reflect equitably the differences in expected losses and expenses. A rate is not unfairly discriminatory because different premiums result for policyholders with like loss exposures with different expenses, or like expenses but different loss exposures, so long as the rate reflects the differences with reasonable accuracy. In determining whether rates comply with the standards set forth in subsection (1), the following criteria shall apply: Due consideration shall be given to past and prospective loss and expense experience within and outside this state; to catastrophe hazards; to any residual market loss redistributions and other similar obligations; to a reasonable provision for profit and contingencies; to trends within and outside this state; to loadings for leveling premium rates over a reasonable period of time or for dividends or savings to be allowed or returned by insurers to their policyholders, members or subscribers; and to all other relevant factors, including the judgment of the filer. Risks may be classified in any reasonable way for the establishment of rates except that no risks may be grouped by classifications based, in whole or in part, on race, color, creed, or national origin of the risk. Rates may be modified for individual risks in accordance with rating plans or schedules which provide for recognition of probable variations in hazards, expenses or both. The systems of expense provisions included in rates for use by an insurer or group of insurers may differ from those of other insurers or group of insurers to reflect the operating methods of such insurer or group with respect to any kind of insurance, or with respect to any subdivision or combination thereof. Any homeowners’ insurance policy filed with the Commissioner of Insurance that offers a percentage deductible for the peril of windstorm from a named storm shall offer a buy-back provision for that deductible which is actuarially sound; however, the Commissioner of Insurance may grant a waiver from the mandatory buy-back provision in accordance with the following procedure and criteria: An insurance company shall make a formal filing requesting a waiver from the buy-back provision requirement with the Commissioner of Insurance. An insurance company shall submit written proof in its formal filing as to why it is in the best interest of Mississippi policyholders to receive a waiver from the buy-back provision requirement and shall provide any supporting documentation requested by the commissioner deemed appropriate to make his decision. All expenses incurred by the Commissioner of Insurance or his designee in determining the validity of the waiver request shall be borne by the petitioning insurer. Such expenses may include, but not be limited to, the cost of reviewing the filing by actuaries, and if the commissioner deems a public hearing appropriate, the cost of a facility, the cost of publicity and the cost of a court reporter for the hearing. The commissioner shall establish by regulation uniform policy language regarding the applicability of hurricane deductibles and the form of notice to be provided to an insured under a homeowner’s insurance policy by an insurer utilizing a hurricane deductible program or programs. The term “hurricane,” for the purpose of a hurricane deductible program, means a storm system that has been declared to be a hurricane by the National Hurricane Center of the National Weather Service. The duration of the hurricane includes the time period, in Mississippi: Beginning at the time a hurricane watch or hurricane warning is issued for any part of Mississippi by the National Hurricane Center of the National Weather Service; Continuing for the time period during which the hurricane conditions exist anywhere in Mississippi; and Ending twenty-four (24) hours following the termination of the last hurricane watch or hurricane warning issued for any part of Mississippi by the National Hurricane Center of the National Weather Service.

Miss. Code Ann. § 83-2-5 Filing of rates and related information by residual market mechanisms.

Residual market mechanisms shall file with the commissioner all rates, supplementary rate information, supporting information, policy forms, and endorsements at least thirty (30) days before the proposed effective date. The commissioner may give written notice within thirty (30) days of the receipt of the filing that additional time, not to exceed thirty (30) days from the date of such notice, is necessary to consider the filing. Upon written application by the residual market mechanism, the commissioner may authorize rates to be effective before the expiration of the waiting period or an extension thereof. A filing is deemed to meet the requirements of this chapter and becomes effective unless disapproved by the commissioner before the expiration of the waiting period or an extension thereof. Whenever a filing made under this section is not accompanied by sufficient supporting information, the commissioner shall inform the filing entity as to what information is required to complete the filing. The filing shall not be deemed to be made until such information is furnished.

Miss. Code Ann. § 83-2-7 Filing of rates and related information by insurers; exceptions; effective date of rate adjustment filing.

Except as provided in Section 83-2-9 and subsections (2) and (3) of this section, every insurer shall file with the commissioner all rates, supplementary rate information, policy forms and endorsements at least thirty (30) days prior to the proposed effective date which shall be stated in the filing. Rates, supplementary rate information, policy forms and endorsements need not be filed for inland marine risks which by general custom of the business are not written according to manual rules or rating plans. Upon the request of the commissioner, supporting information shall also be filed. Any filing made under this section is deemed to be approved unless disapproved by the Commissioner of Insurance within thirty (30) days after the date of filing. A filing of adjustments of rates for existing rating systems made under this section which does not involve a change in the relationship between such rates and the expense portion thereof or does not involve a change of the element of expenses which are paid as a percentage of premiums and does not involve a change in rate relativities among such classifications on any basis other than loss experience is effective on the date specified in the filing which shall not be less than thirty (30) days after the filing is made and shall be deemed to meet the requirements of this chapter. The commissioner may give written notice within thirty (30) days of the receipt of the filing that additional time, not to exceed sixty (60) days from the date of such notice, is necessary to consider the filing. A filing is deemed to meet the requirements of this chapter and becomes effective unless disapproved by the commissioner before the expiration of the waiting period or an extension thereof. Whenever a filing made under this section is not accompanied by sufficient supporting information, the commissioner shall inform the filing entity as to what information is required to complete the filing. The filing shall not be deemed to be completed until such information is furnished. No insurance company shall make or issue a contract or policy except in accordance with filings made with the commissioner, if such filings are required.

Miss. Code Ann. § 83-2-9 Public inspection of filed rates and related information; rates exceeding those filed; filing by rate service organization; filing by reference.

All rates, supplementary rate information, policy forms, endorsements and any supporting information filed under this chapter shall be open to public inspection at any reasonable time as soon as filed. Copies may be obtained by any person on request and upon payment of a reasonable charge. A rate in excess of that provided by a filing otherwise applicable may be used on a specific risk upon written application of an insured, stating specific reasons why a risk requires higher than standard rates on file by an insurer notwithstanding any other provisions of this chapter. An endorsement shall be attached to the policy giving such reasons and the percentage of surcharge. A copy of the endorsement shall be kept by the insurer and its agent. Copies of such endorsements shall be furnished to the commissioner upon request for his review to determine that the rates are not excessive, inadequate or unfairly discriminatory. Rate service organization filings: The filings required by Section 83-2-5 and Section 83-2-7 may be made by a rate service organization designated by an insurer or residual market mechanism. An insurer may make a filing in compliance with Section 83-2-7 by giving written notice to the commissioner that the insurer is following rates filed by a rate service organization in any particular line with any exceptions clearly set forth as necessary to fully inform the commissioner. An insurer may file by reference to rates, supplementary rate information, supporting information, policy forms and endorsements filed by and effective for another insurer or a rate service organization.

Miss. Code Ann. § 83-2-11 Disapproval of rates by commissioner and related procedure; interim rates in absence of legally effective rates.

The commissioner shall disapprove a rate or policy form or endorsement if the commissioner finds that the rate is unjustified, or the policy form or endorsement: Is in any respect in violation of or does not comply with this code; or Contains or incorporates by reference any inconsistent, ambiguous or misleading clauses or exceptions and conditions which unreasonably or deceptively affect the risk purported to be assumed in the general coverage of the contract. Disapproval procedure: Upon disapproval of a filing, the commissioner shall issue an order specifying the manner in which the filing fails to meet the requirements of this chapter. The filer shall be given a hearing upon written request made within thirty (30) days after the disapproval order. If the commissioner disapproves a rate, policy form or endorsement currently in effect, the commissioner shall issue such an order only after a hearing held on not less than twenty (20) days written notice to the filing insurer or rating organization. The insurer or rating organization may waive the hearing. An order shall be issued within fifteen (15) days after the close of the hearing or within thirty (30) days after the filing of a waiver of hearing and shall specify in what respects the rates policy form or endorsement fail to meet the requirements of this chapter. The order shall also state when the further use of such policy form or endorsement or rate in contracts of insurance made thereafter shall be prohibited which shall be within a reasonable period of time, but not less than forty-five (45) days. The order may include a provision for premium adjustment for policies issued, renewed or nonrenewed after the effective date of such order. Whenever an insurer has no legally effective rates as a result of the commissioner’s disapproval of rates or other act, the commissioner on request of the insurer shall specify interim rates for the insurer that are sufficient to protect the interests of all parties and the commissioner may order that a specified portion of the premiums be placed in an escrow account approved by the commissioner. When new rates become legally effective, the commissioner shall order the escrowed funds or any overcharge in the interim rates to be distributed appropriately, except that refunds to policyholders that are de minimis shall not be required.

Miss. Code Ann. § 83-2-13 Furnishing rate information to insureds; hearing of complaints as to application of rating system; appeals.

Every insurer or rate service organization shall furnish to any insured affected by a rate published by it all pertinent information as to such rate within a reasonable time after receipt of a written request and upon payment of a reasonable charge. Every insurer and rate service organization shall provide reasonable means whereby any person aggrieved by the application of its rating system may be heard within this state on written request to review the manner in which such rating system is applied in relation to the insurance afforded. If the insurer fails to grant or reject such request within thirty (30) days, the applicant may proceed in the same manner as if the application has been rejected. A party affected by the action of an insurer with respect to a request under this subsection may appeal to the commissioner within thirty (30) days after receipt of notice of such action. The commissioner, after a hearing held upon not less than ten (10) days written notice to the appellant and insurer, may affirm, modify or reverse such action.

Miss. Code Ann. § 83-2-15 Rating bureau as exclusive provider of services relating to rates; licensing of and services provided by rate service organization.

No rate service organization other than the Rating Bureau established pursuant to Section 83-3-5 shall provide any service relating to the rates of any insurance subject to this chapter, and no insurer shall utilize the services of such organization for such purposes unless the organization has obtained a license. A rate service organization may perform the following services upon request of the Commissioner of Insurance: Collect, compile and furnish loss or expense statistics; Recommend rates or supplementary rate information; Advise about rate questions and provide supporting information for rates; Make inspections, surveys and audits; Conduct research and on-site inspections in order to prepare classifications of public fire defenses; Prepare and file policy forms and endorsements and consult with members, subscribers and others relating to their use; Provide actuarial, statistical and administrative services to insurers and insurer-supported organizations; Conduct and report on the content of research projects; and Furnish any other services related to those enumerated in this subsection. A rate service organization or an advisory organization shall not refuse to supply any services for which it is licensed in this state to any insurer authorized to do business in this state and offering to pay the fair and usual compensation for the services. A rate service organization shall not require the purchase of any specific services as a condition to obtaining the services sought, provided the furnishing of the requested services does not place an unreasonable burden on the rate service organization. A rate service organization applying for a license shall include with its application: A copy of its constitution, articles of association or incorporation, bylaws and any other rules or regulations governing the conduct of its business; A list of its members and subscribers; A service and acknowledgement of service of process as provided for insurance companies under Section 83-21-39; and A statement showing its technical qualifications. Upon a finding by the commissioner that the applicant is qualified, the commissioner shall issue a license specifying the kinds of insurance or subdivisions thereof for which the applicant is authorized to act as a rate service organization. Each application under this subsection shall be granted or denied in whole or in part by the commissioner within sixty (60) days after the date of its filing. Licenses issued pursuant to this section shall remain in effect until suspended or revoked by the commissioner. The fee for said license shall be Twenty-five Dollars ($25.00).

Miss. Code Ann. § 83-2-17 Advisory organizations; registration; unfair practices.

An advisory organization shall not provide any service relating to the rates of any insurer subject to this chapter, and an insurer shall not utilize the services of an advisory organization for such purposes, unless the advisory organization has registered under subsection (3). A registered advisory organization may perform one or more of the authorized activities enumerated in Section 83-2-15 but such advisory organization shall not make any filings on behalf of insurers. An advisory organization shall submit at the time of registration: A copy of its constitution, articles of association or incorporation, bylaws and any other rules or regulations governing the conduct of its business; A list of its members and subscribers; A service and acknowledgement of service of process as provided for insurance companies under Section 83-21-39; and An agreement that the commissioner may examine each advisory organization in accordance with the provisions of Section 83-2-25. If after a hearing the commissioner finds that any activity or practice of any advisory organization is unfair, unreasonable or otherwise inconsistent with the provisions of this chapter, the commissioner shall specify the finding in an order requiring the discontinuance of such activity or practice.

Miss. Code Ann. § 83-2-19 Repealed.

Repealed by Laws, 2000, ch. 314, § 1, eff from and after passage (approved April 3, 2000). [Laws, 1987, ch. 422, § 11, eff from and after January 1, 1988]

Miss. Code Ann. § 83-2-21 Prohibition of insurer agreements as to adherence to or use of rates and related information; exception for insurers under common ownership or management.

An insurer may not agree with any other insurer to adhere to or use any rate or supplementary rate information. The fact that an insurer adheres to or uses such material is not sufficient in itself to support a finding that an agreement to adhere or use exists, but such fact may supplement other evidence of such agreement. Two (2) or more insurers having common ownership or operating in this state under common management or control may act in concert between or among themselves in the same manner as if they constitute a single insurer.

Miss. Code Ann. § 83-2-23 Cooperation among insurers participating in joint underwriting, pools, residual market mechanisms; registration with and review by commissioner; unfair practices.

Notwithstanding Section 83-2-21, insurers participating in joint underwriting, pools or residual market mechanisms may act in cooperation with each other in the making of rates, supplementary rate information, policy forms, underwriting rules, surveys, inspections and investigations, the furnishing of loss or expense statistics or other such information and in the conduct of research in connection with such activity. Except to the extent modified by this section, insurers participating in joint underwriting, pool or residual market mechanisms are subject to the other provisions of this chapter. Every pool shall file with the commissioner a copy of its constitution, articles of association or incorporation, bylaws and any other rules or regulations governing its activities, a list of its members, the name and address of a resident of this state upon whom notices or orders of the commissioner or process may be served, and any changes in the foregoing. Any residual market mechanism, plan or agreement to implement such a mechanism, and any amendments thereto, shall be submitted in writing to the commissioner for approval, together with such information as the commissioner may reasonably require. If, after a hearing, the commissioner finds that any activity or practice of insurers participating in joint underwriting, pool or residual market mechanisms is unfair, unreasonable or otherwise inconsistent with the provisions of this chapter, the commissioner shall issue a written order specifying in what respects such activity or practice is unfair, unreasonable or otherwise inconsistent with the provisions of this chapter and require the discontinuance of such activity or practice.

Miss. Code Ann. § 83-2-25 Compliance review; related reports and records.

The commissioner may examine any insurer, advisory organization, rate service organization, pool or residual market mechanism to ascertain compliance with this chapter. Every insurer, advisory organization, rate service organization, pool and residual market mechanism shall maintain records of the type and kind reasonably adapted to its method of operation. Such records shall contain the experience, data, statistics and other information collected or used by it in its activities. These records shall be available for examination or inspection by the commissioner at any time upon reasonable notice. The cost of an examination made pursuant to this section shall be paid by the examined party in the same manner as provided by Section 83-1-27. The commissioner may accept the report of an examination made by the insurance supervisory official of another state in lieu of an examination under this section.

Miss. Code Ann. § 83-2-27 Payment of dividends, savings or unabsorbed premium deposits to insureds.

Nothing in this chapter shall be construed to prohibit or regulate the payment of dividends, savings or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers. A plan for the payment of dividends, savings or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers shall not be deemed a rating plan.

Miss. Code Ann. § 83-2-29 Penalties; procedures for license suspension.

If the commissioner finds that any person or organization has violated any provision of this chapter, the commissioner may impose a penalty in accordance with Section 83-5-85. Technical violations arising from systems or computer errors of the same type shall be treated as a single violation. In the event of an overcharge, if the insurer makes restitution, including payment of interest, no penalty shall be imposed. The commissioner, within his discretion, is authorized to abate such part of the foregoing penalty as the facts of the particular case warrant and to bring suit for such lesser amount as may be determined, or to accept such lesser amount in settlement of the state’s claim for penalties. The commissioner may suspend the license of any rate service organization or insurer for failure to comply with an order of the commissioner within the time limit set forth in the order, or any extension thereof which the commissioner may grant. The commissioner may determine when a suspension of license shall become effective and it shall remain in effect for the stated period unless modified or rescinded by the commissioner until the order upon which the suspension is based is modified, rescinded or reversed. A license shall not be suspended except upon a written order of the commissioner stating his findings, made after a hearing held upon not less than ten (10) days written notice to such person or organization, specifying the alleged violation.

Miss. Code Ann. § 83-2-31 Appeals; rates charged pending disposition of appeal.

Any order issued by the commissioner under this chapter may be appealed to the Chancery Court of the First Judicial District of Hinds County in the manner provided by law. Where the order of the commissioner results in an increase or decrease in rates, any insurer affected thereby with leave of court, pending final disposition of the proceedings in the court, may continue to charge rates which were obtained prior to such order of decrease, or may charge rates resulting from such order of increase on condition that the difference in the premiums be deposited in a special account by the insurer or paid to the holders of policies issued after the order of the commissioner, as the court may determine.

Miss. Code Ann. § 83-2-33 Property and casualty insurance companies to contribute to Insurance Department Fund; funding of agency expenses; deposit of monies into State General Fund.

All property and casualty insurance companies doing business in this state shall contribute annually, at such times as the Insurance Commissioner shall determine, in proportion to their gross premiums collected within the State of Mississippi during the preceding year, to a special fund in the State Treasury to be known as the “Insurance Department Fund” to be expended by the Insurance Commissioner in the payment of the expenses of the Department of Insurance as the commissioner may deem necessary.The commissioner is hereby authorized to employ such actuarial and other assistance as shall be necessary to carry out the duties of the department; and such employees shall be under the authority and direction of the Insurance Commissioner.The amount to be contributed annually to the fund shall be fixed each year by the Insurance Commissioner at a percentage of the gross premiums so collected during the preceding year.However, a minimum assessment of One Hundred Dollars ($100.00) shall be charged to each licensed property and casualty insurance company regardless of the gross premium amount collected during the preceding year. The total contributions collected for the Insurance Department Fund shall not exceed the sum of Seven Hundred Fifty Thousand Dollars ($750,000.00) in each fiscal year. From and after July 1, 2016, the expenses of this agency shall be defrayed by appropriation from the State General Fund and all user charges and fees authorized under this section shall be deposited into the State General Fund as authorized by law. From and after July 1, 2016, no state agency shall charge another state agency a fee, assessment, rent or other charge for services or resources received by authority of this section.

Miss. Code Ann. § 83-2-35 Payment of fee by property and casualty insurers; deposit of fee into Insurance Department Fund; funding of agency expenses; deposit of monies into State General Fund.

This section applies to all forms of property and casualty insurance on risks or operations in this state by any insurer authorized to do business in this state, except: Accident and health; Ocean marine insurance; Reinsurance; Aircraft liability and aircraft hull insurance; Title insurance; Credit accident and health insurance. All such insurers shall pay to the Commissioner of Insurance a fee of Fifteen Dollars ($15.00) for each form or rate filing filed with the commissioner. The commissioner shall pay such fees into the special fund in the State Treasury designated as the “Insurance Department Fund.” From and after July 1, 2016, the expenses of this agency shall be defrayed by appropriation from the State General Fund and all user charges and fees authorized under this section shall be deposited into the State General Fund as authorized by law. From and after July 1, 2016, no state agency shall charge another state agency a fee, assessment, rent or other charge for services or resources received by authority of this section.