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abolition of rating variables can reduce accident
prevention incentives. That is, to the extent accurate
pricing promotes accident prevention, less accurate
pricing reduces it.

So abolition of rating variables also reduce the accuracy
of the rating system, which either creates subsidies or
else produce availability problems. In either case,
accident prevention incentives are reduced.

f) Forces affecting classification system - Classification
system varies over time. Automobile liability originally
had only one classification. By World War II, three
classifications were developed. This was further divided
into nine classes. In 1965, National Bureau of Casualty
Underwriters introduced a plan having 260
classifications. In 1970, they were reduced to 217.

Many forces, primarily the ones related to competition,
influence classification plans. Generally competitiveness
is directly proportional to classifications. To the extent
the insurers can identify cost differences, they tend to

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