Use of rates

1. Use of prima facie rates. An insurer that files rates or has rates on file that are equivalent to the prima facie rates shown in sections 45-07-01.1-04 and 45-07-01.1-05, to the extent adjusted pursuant to section 45-07-01.1-09, may use those rates without further proof of their reasonableness. 2. Use of rates higher than prima facie rates. An insurer may file for approval of and use rates that are higher than the prima facie rates shown in sections 45-07-01.1-04 and 45-07-01.1-05, to the extent adjusted pursuant to section 45-07-01.1-09, as long as the filed rates are consistent with the provisions of section 45-07-01.1-03. If rates higher than the prima facie rates shown in sections 45-07-01.1-04 and 45-07-01.1-05, to the extent adjusted pursuant to section 45-07-01.1-09, are filed for approval, the filing shall specify the account or accounts to which the rates apply. The rates may be: a. Applied uniformly to all accounts of the insurer; b. Applied on an equitable basis approved by the commissioner to only one or more accounts of the insurer for which the experience has been less favorable than expected; or c. Applied according to a case-rating procedure on file with the commissioner. 3. Approval period of deviated rates. a. A rate that deviates from a prima facie rate will be in effect for a period of time not longer than the experience period used to establish the rate, i.e., one year, two years, or three years. An insurer may file for a new rate before the end of a rate period but not more often than once during any twelve-month period. b. Notwithstanding the provision of subsection 1, if an account changes insurers, the rate approved to be used for the account by the prior insurer is the maximum rate that may be used by the succeeding insurer for the remainder of the rate approval period approved for the prior insurer or until a new rate is approved for use on the account, if sooner. 4. Use of rates lower than filed rates. An insurer may at any time use a rate for an account that is lower than its filed rate without notice to the commissioner. 5. Glossary of terms and definitions. a. "Experience" means "earned premiums" and "incurred losses" during the experience period. b. "Experience period" means the most recent period of time for which earned premiums and incurred losses are reported but not for a period longer than three full years. c. "Incurred losses" means total claims paid during the experience period, adjusted for the change in claim reserve.