Georgia Adjuster Practice Test

Which method must insurers in Georgia utilize regarding rate credits?

1. Offer random discounts to clients

2. Use filed rate credits or supporting methodology

3. Implement variable pricing strategies

4. Provide no credits to policyholders

The correct answer is: Use filed rate credits or supporting methodology

In Georgia, insurers must adhere to regulatory procedures when it comes to rate credits. The requirement to use filed rate credits or established methodologies ensures that any discounts offered to policyholders are based on a transparent and supported framework. This means that insurers are not free to offer arbitrary discounts or credits; instead, they must file their rate structures with the state and provide justification for any credits they intend to apply. This protects consumers by ensuring that all discounts are applied fairly and in accordance with decided regulatory standards. Other options, such as offering random discounts or implementing variable pricing strategies without a foundation, could lead to potential inequities in how rates are applied among different policyholders. Providing no credits at all would not satisfy the regulatory expectation that companies act competitively while remaining compliant with the law. Thus, the requirement for filed rate credits or a supportive methodology is fundamental to maintaining a fair and equitable insurance market.