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Rate regulation is something that is done by the government in which the government itself or representatives of will regulate the rates that are charged to consumers.

The reason for this practice is so that consumers are protected from either excess or unreasonable rates charged by companies. Additionally, it works to ensure that the basic rates are stay at a fixed low cost which will make them accessible for low income persons and their families. Without rate regulation there is no prevention of companies engaging in the action of collusion or price fixing for which rates to charge for their provided services.

The rate regulation can be accomplished from the local, to state and up to the federal agencies in an assortment of different ways.

Examples

Some of the industries that are potentially subject to rate regulation include, but are not limited to, the following:

• Insurance companies
• Electric utility companies
• Cable companies

Within these industries there are schedules of rates which are subject to review at any one time by a government representative. The government representative can make the determination on whether or not the rates are fair or if they meet the standard that was set by the government.

Any company that violates the rate regulations or standards faces a possible fine.

Regulation of Services

In addition to the base price establishment the rate regulation will also include the regulation of services. An example, regulations can determine what they consider to be the “basic coverage” for consumers to be paying the minimum rate for an insurance policy than those who buy basic insurance and have an assured amount of coverage.

Competition

In no way is the act of regulation meant to discourage competition between companies or even tell the companies how much they should be charging for their services.

Within the framework of rate regulation there is a lot of flexibility when it comes to allowing companies to make their own decisions for the types of services they want to offer, how the services offered should be tiered as well as the base amount to be charged for each tier of coverage or service.

When it comes to rate regulation its main focus is on that of the basic service. This means when it comes to the higher level services/plans offered you’re on your own since these aren’t subject to regulation.

Customer Options

Should a consumer feel that their interaction within a company; such as, an insurance company, that is subject to the rate regulation is in violation of government standards then the consumer can report the company and request that an investigation be done.

The process is going to vary and the best way to go about it is to contact an elected official at your local level. This is always going to be your best starting point as the official is going to be able to help you with a referral to the proper government office to continue your complaint. It’s a lot easier to navigate then just being on your own.

To find a local official you can check your phone book that will most usually always contain a listing or go through your City Hall or a similar agency in your local government.