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Foundations of Casualty Actuarial Science

Except for affordability issue, these social issues
are based on accuracy arguments. The basic
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

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