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would be constitutional. Regulations issued by state
insurance departments may affect classifications. Under
a constitutional theory, only the legislature may
promulgate substantive law, the executive branch merely
carries out the will of the legislature.

Although states vary considerably, broad discretionary
grants of power to executive agencies may be found
unconstitutional. This insurance commissioners may only
be able to act within the guidelines provided by
legislatures.

Q4. Write short notes on -

a) Actuarial Criteria - Actuarial criteria may also be called
statistical criteria. They include accuracy, homogeneity,
credibility, and reliability. The rating variables are related
to costs.

If costs do not differ for different values of a rating
variable, the usual methods for estimating rate relatives
will produce the same relativity. The use of a variable
adds to administrative expense, and consumer confusion,

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