What is one of the primary goals of rate regulation?

One of the primary goals of rate regulation is to ensure fairness in rates. This is important because it protects consumers from unjust pricing practices and ensures that insurance rates are adequate, not discriminatory, and fairly reflect the risk they are insuring. Rate regulation typically involves oversight by a government body that assesses whether the rates charged by insurers are reasonable and justifiable based on various factors, including the loss experience, expenses, and investment income of the insurance companies.

By ensuring fairness, regulatory measures help maintain public confidence in the insurance market, as consumers can trust that they are being charged appropriate rates relative to the coverage they receive, regardless of their individual circumstances. This regulation helps prevent practices that could lead to unreasonable charges or unfair discrimination among policyholders, contributing to a more stable and ethical insurance environment.