Rating Organization

WHAT IS A RATING ORGANIZATION?

A rating organization receives and analyzes and interprets data (statistical data, past and present loss experience, catastrophe hazards, insurer expenses and other outlays) and determines a rating system (manual of risk classifications, rules and rates, and rating plan) applicable to a type of insurance.  Insurers that are members of a rating organization must use the rating organization's rating system as their own except that an insurer may file a "deviation," which is either a uniform percentage increase or decrease to the rating system, or changes from the rate rule established for a classification of risk to reflect the risk profile for a more specific subcategory of risk.

WHO MUST BE LICENSED?

A corporation, an unincorporated association, a partnership or an individual, whether located within or outside this state, that intends to act as a rating organization must be licensed.  ARS § 20-361.

ARS § 41-1030(G) requires most Arizona government agencies to prominently print the provisions of ARS § 41-1030(B), (D), (E) and (F) on all license applications.  The following is the language in ARS § 41-1030(B), (D), (E) and (F):

B.        An agency shall not base a licensing decision in whole or in part on a licensing requirement or condition that is not specifically authorized by statute, rule or state tribal gaming compact. A general grant of authority in statute does not constitute a basis for imposing a licensing requirement or condition unless a rule is made pursuant to that general grant of authority that specifically authorizes the requirement or condition.

D.        This section may be enforced in a private civil action and relief may be awarded against the state.  The court may award reasonable attorney fees, damages and all fees associated with the license application to a party that prevails in an action against the state for a violation of this section.

E.        A state employee may not intentionally or knowingly violate this section.  A violation of this section is cause for disciplinary action or dismissal pursuant to the agency’s adopted personnel policy.

F.         This section does not abrogate the immunity provided by section 12-820.01 or 12-820.02.