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State insurance regulators and legislators are increasingly scrutinizing “price optimization,” a practice that some insurers are reportedly using as part of the ratemaking process. There is, however, considerable disagreement as to what price optimization is, how it might operate in the context of insurance, and what, if anything, regulators should do about it. Earlier this year, the National Association of Insurance Commissioners (NAIC) instructed its Casualty Actuarial and Statistical Task Force to draft a white paper on price optimization, focusing on the areas of controversy. 

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