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Business, 27.02.2020 03:32 markaylarowland8

Although domiciled in Nebraska, Auto Insurance is licensed to sell auto insurance in 10 states. A differ- ent set of rates applies in each state. In five states, prior approval of rates is required. Two states have a file-and-use law, and the remaining three states have a flex-rating law. Auto Insurance has experi- enced poor underwriting results and needs to increase its rates. a. Explain how each of the above rating laws would apply to Auto Insurance. b. Describe some possible problems that Auto Insur- ance may experience in trying to get its rates increased in a prior-approval state.

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