625.11 Rate standards.

(1) General. Rates shall not be excessive, inadequate or unfairly discriminatory, nor shall an insurer charge any rate which if continued will have or tend to have the effect of destroying competition or creating a monopoly.

(2) Excessiveness.

(a) Competitive market. Rates are presumed not to be excessive if a reasonable degree of price competition exists at the consumer level with respect to the class of business to which they apply. In determining whether a reasonable degree of price competition exists, the commissioner shall consider all relevant tests including:

1. The number of insurers actively engaged in the class of business;

2. The existence of rate differentials in that class of business;

3. Whether long-run profitability for insurers generally of the class of business is unreasonably high in relation to its riskiness.

(b) Noncompetitive market. If such competition does not exist, rates are excessive if they are likely to produce a long run profit that is unreasonably high in relation to the riskiness of the class of business, or if expenses are unreasonably high in relation to the services rendered.

(3) Inadequacy. Rates are inadequate if they are clearly insufficient, together with the investment income attributable to them, to sustain projected losses and expenses in the class of business to which they apply.

(4) Unfair discrimination. One rate is unfairly discriminatory in relation to another in the same class if it clearly fails to reflect equitably the differences in expected losses and expenses. Rates are not unfairly discriminatory because different premiums result for policyholders with like loss exposures but different expense factors, or like expense factors but different loss exposures, so long as the rates reflect the differences with reasonable accuracy. Rates are not unfairly discriminatory if they are averaged broadly among persons insured under a group, franchise or blanket policy.

Read together, ss. 625.11 and 625.22 provide that the insurance commissioner shall disapprove any rate that destroys competition, thus providing a regulatory remedy for rates that constitute restraints of trade and barring private rate-related suits for damages. Prentice v. Minnesota Title Ins. Co. 176 Wis. 2d 714, 500 N.W.2d 658 (1993).

There is no active state supervision of the organization established by title insurance companies to set uniform rates for its members and thus no “state-action immunity" for otherwise prohibited price-fixing engaged in by the member title insurers. FTC v. Ticor Title Insurance Co. 504 U.S. 621, 119 L. Ed. 2d 410 (1992).

There is no private right of action to enforce sub. (1). NAACP v. American Family Mutual Insurance Co. 978 F.2d 287 (1992).