In this paper, the authors discuss Consent to Rate (CTR) laws. These laws, found in many states, allow insurers in a given marketplace to charge a rate that differs from the approved rate if the insured completes the appropriate documentation consenting to the rate change. As such, CTR laws effectively allow for the circumvention of strict rate regulation laws by providing a way for insurers in highly regulated marketplaces (e.g., homeowners or automobile) to charge higher rates than those promulgated or approved by state insurance regulators. The paper proceeds as follows. First, an overview of CTR laws and the impact on consumers. Next, a case study approach is used, using three neighboring states to provide detailed information on their rate regulation model and the extent of use of CTR law. Based on the experience of the three states, the authors find evidence that insurers leverage CTR laws to obtain rate increases when rates are suppressed by the rate approval process.

Many companies in recent years are seeking new ways to manage their debt liabilities. Companies with outstanding debt securities can engage in a variety of transactions with bond holders. Choices will depend to some extent on whether or not the company has access to cash and is able to purchase in the open market or through cash tender offer, or if without cash, by making an exchange offer of new securities for existing securities. Often in either case, there is a bond indenture consent solicitation needed to waive or amend existing bond terms, the announcement of which signals management's intent to the market. Given the increasing prevalence of this practice as a debt management tool, this study seeks to determine whether it is truly perceived to be value enhancing by stockholders. Using an event study of 50 companies announcing bond indenture consent solicitations, we find that shareholders do benefit, and companies appear well served by this practice.

There are three goals of insurance rate regulation. Rates must be: 1) adequate; 2) not excessive; and 3) not unfairly discriminatory. Rates that are adequate yet not excessive are overall high enough to pay claims and expenses, yet not so high overall that they result in unreasonable profiteering by insurers. The third regulatory goal—that rates are not unfairly discriminatory—is the topic of interest in our research. The concept of unfair discrimination in an insurance context—determining what constitutes fairness in pricing—can differ substantially from the thinking on fairness in a societal context. As a result, the term “discrimination” may be used quite differently in these two contexts. Discrimination, with negative societal connotations, is endemic in our world broadly and largely unjustifiable, yet in the narrower world of insurance, it is the basis for the entire industry’s viability and sustainability. In the insurance context, we can receive the term “discrimination” in a neutral manner, simply taking it to mean different treatment for different groups having different characteristics, without it necessarily connoting any negative intent or outcome. Indeed, the purpose in insurance for engaging in “fair discrimination” —that is, discrimination that price differentiates between discernibly different levels of risk—is itself rooted in economic fairness. An insurance carrier charges differential prices for its products based on differentials in risk. Nevertheless, when risk transfer to an insurer is priced based on uncontrollable and/or immutable classifications such as race and gender, there can be profoundly different views of what constitutes fairness. In many areas of U.S. law, discrimination on either the basis of gender or sexual identity is prohibited in a number of jurisdictions for a number of consumer situations. Yet the broad concept of societal fairness and the much narrower concept of actuarial fairness differ, and so within insurance markets, U.S. law has historically set insurance apart from other products in speaking to issues of fairness and discrimination (West, 2013). Within the last year, several states have enhanced their recognition of nonbinary or genderqueer identities by implementing a Gender X option on driver’s licenses. Insurance carriers are left with minimal direction on how to appropriately price this emerging class within the three goals of rate regulation. Additionally, as diversity and inclusion continue to be a strategic initiative within the insurance market, the insurance industry and its regulatory environment have to navigate carefully between the business imperatives for adequate pricing and inclusion efforts. This paper addresses the potential for unfair discrimination in some lines of business—with special focus on auto insurance—should gender-based rating be continued into the future. It also explores an immediate opportunity to enhance the insurance industry’s social compact with its insureds via recognition of the Gender X identity. Part I gives a primer on nonbinary and trans-identity followed by a brief history of the role of gender in insurance pricing, Part II discusses nonbinary, transgender, and the introduction of Gender X as an additional categorical level of the gender identify rating factor as used in insurance pricing. Part III and Part IV dive into the economic and social implications of movement in U.S. law toward more gender inclusivity.

The Assignment of Benefits (AOB) clause under an insurance contract has been recognized for quite some time and until recently has been of little consequence to homeowner's insurance. Over the past decade, however, the clause in homeowner's coverage is coming under fire. Attorneys and water remediation contractors are using Florida's attorney fee-shifting statute in conjunction with an AOB under the Insurance Services Office (ISO) (1999) Homeowners 3 (HO3) -- Special Form policy in filing claims for reimbursement of services rendered subsequent to the insured's executed AOB. As a result, insurer claims costs in Florida are escalating to a crisis point. This paper discusses the challenges within the homeowner's assignment of benefits clause as applied to water mitigation claims in the state of Florida since 2005. We analyze legal and regulatory arguments used to curtail rising litigation in this area. We draw specific attention to Florida's Homestead Exemption as an insurer defense to deflect mounting litigation efforts to pay these increasingly significant claim costs.

As the COVID-19 virus outbreak rapidly spread across the nation, state and local governments responded with mitigation efforts designed to slow the spread. This article focuses on four main areas and describes the impact on insurance agents. The first area is the designation of “essential employees.” This was the most immediate issue and required determination of who should stay home and who should continue to work because their job was essential. Second, we focus on agency operations and customer support issues. Next, we cover the challenges agents face complying with licensing and continuing education (CE) requirements. Lastly, we look at the surprisingly complicated factors surrounding premium adjustment and possible conflict with rebate laws and regulations. We interview a range of agents and leadership at insurance trade associations to obtain firsthand experience regarding these issues, and we provide recommendations based on lessons learned that can be applied in future disasters.