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limitations on accuracy are the competitiveness of
the insurance industry and credibility of the cost
information.

D. Legal Criteria -This involves the legal context of risk
classifications. The circumstances of each particular
case, e.g, rating variable, line of insurance, state statutes,
and constitutions, will determine its outcome.

Risk classification may be affected by constitutions,
statutes, and regulations. Generally, constitutions govern
statues and statutes govern regulations. Constitutions
are usually very general, statutes are more specific, and
regulations most specific. Both federal and state
constitutions apply to a risk classification situation.

There must however be a common specific clause or
section. Federal constitution is quite broad and vague.
The 'equal protection clause' (EPC) might also be
applicable, other clauses might not be. State constitutions
are often more specific. Gender discrimination, for
example, is specifically mentioned in many state

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