State Regulation of Insurance Rates

The stretching out of the long arm of the state to regulate and control the prices to be charged for insurance is a single incident in a legislative program very widespread in its scope. Legislative policies as to prices, generally, during the early part of the century, were founded upon the theory that the law of supply and demand, and the competitive principle were a sufficient control, and that all the legislature had to do was to keep its hands off and the matter would presently regulate itself. This policy was based on two assumptions, first, that competition would always be present; second, that a demand would always create a commensurate supply.