287.942. Competitive market presumed to exist, when — reasonable degree of competition, factors.

225 words·~1 min read·/mo/chapter-287/287-942

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287.942. Competitive market presumed to exist, when — reasonable degree of competition, factors. — 1. A competitive market is presumed to exist unless the director, after hearing, determines that a reasonable degree of competition does not exist in the market and the director issues an order to that effect. Such an order shall expire no later than one year after issue. In determining whether a reasonable degree of competition exists, the director may consider relevant tests of workable competition pertaining to market structure, market performance and market conduct.

For the purposes of this section, "market" shall mean the statewide workers' compensation and employers' liability lines of business.

2. In determining whether a reasonable degree of competition exists, the following factors shall be considered:

(1)Generally accepted and relevant tests of competition pertaining to market structure, market performance and market conduct;

(2)Market concentration as measured by the Herfindahl-Herschman Index;

(3)The number of insurers transacting workers' compensation insurance in the market;

(4)Insurer market shares and changes in market shares;

(5)Ease of entry into the market;

(6)Whether long-term profitability for insurers in the market is unreasonably high in relation to the risks being insured; and

(7)Whether long-term profitability for insurers in the market is reasonable in relation to industries of comparable business risk.

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(L. 1993 S.B. 251 § 22)

Effective 1-01-94