Rule 20:06:06:01 Premium rates -- Fifty percent loss ratio benchmark.
20:06:06:01. Premium rates -- Fifty percent loss ratio
benchmark. A basic test of the reasonableness of the relation of benefits
to the premium charged shall be the development of an anticipated loss ratio of
claims incurred to premiums earned of at least 50 percent. If the total current
expected expenses, including acquisition expenses, exceed 50 percent of the
premium dollar, this shall be considered prima facie evidence that a company
intends to write credit business at a loss ratio not in compliance with this
rule. Commissions, including retrospective premium refunds, bonuses, or
acquisition expenses, shall not exceed 40 percent. If a company is not in
compliance with this rule, it shall be required to show just cause why the
premium rates as filed should not be disapproved.
4 SDR 6, effective August 9, 1977; 5 SDR 91, effective April 25, 1979; 12 SDR
151, 12 SDR 155, effective July 1, 1986.
Authority: SDCL 58-19-34.
Implemented: SDCL 58-19-26.
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