What best describes the regulatory objectives of insurance rates?

The statement that rates must be adequate, not excessive, and not unfairly discriminatory captures the essential regulatory objectives governing insurance rates. This principle ensures that insurance rates are set in a manner that provides sufficient funds for the insurer to pay claims while also ensuring that the costs are fair and reasonable compared to the risks being covered.

When rates are deemed adequate, they provide the necessary financial resources for insurers to meet their obligations to policyholders. This means that insurers are able to cover claims and have a sustainable business model. If rates are excessive, not only could this lead to consumer dissatisfaction, but it could also result in regulatory scrutiny and potential legal issues.

Furthermore, ensuring that rates are not unfairly discriminatory is crucial for the protection of consumers. This means that similar risks should be evaluated in a similar manner, and insurers should avoid imposing higher rates on individuals based on arbitrary characteristics or irrelevant factors.

While the other options touch on various aspects of insurance regulation, they do not encompass the comprehensive nature of regulatory objectives as effectively as the chosen statement. For instance, simply stating that rates must not be discriminatory lacks the emphasis on adequacy and the need to avoid excessive pricing. Cooperation in rate-making can be part of the industry practice, but this does not speak directly to regulatory