| For
each type of policy, insurance companies have a range of premium
levels that may be charged based on various factors that are considered at the
time an application is submitted. For example, the premium for an auto insurance
policy will vary depending on the applicant's driving habits, such
as number of miles driven and whether the auto is used for business, the
age and model of the vehicle, and whether the applicant has recently been convicted
of a traffic violation. The premium for a life insurance policy will vary
depending on the applicant's age and health condition. Rating factors must be
reasonably related to the risk being insured, and state law often
limits the specific rating factors that may be considered for certain types of
insurance. The
rates and rating factors for most types of insurance must be filed with
the insurance regulatory agency for each state where the insurance
is to be sold. In some states and for some types of insurance,
the rates must get regulatory approval before they can be used. |
