We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.
Economy

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

What is Rate Regulation?

Mary McMahon
By
Updated: May 16, 2024
Views: 11,838
Share

Rate regulation is a government activity in which the government or representatives of the government regulate rates charged to consumers. This practice is designed to protect consumers from excessive or unreasonable rates, to ensure that basic rates are fixed at low costs to make them accessible for people of low income, and to prevent collusion or price fixing among companies which charge rates for their services. Rate regulation may be accomplished by local, state, or federal agencies, in a variety of ways.

Some examples of industries which may be subject to rate regulation include: insurance, electric utilities, and cable companies. In these industries, schedules of rates are subject to review by government representatives who can determine whether or not the rates are fair, or if the rates meet the standards set by the government. Companies which violate rate regulation standards may be fined.

In addition to establishing base prices, rate regulation also includes regulation of services. For example, in rate regulation of the cable industry, the government may determine that people who are charged the base rate need to have access to at least two local cable stations, so that cable subscribers have access to emergency information and coverage of local events which may be important to know about. Likewise, regulators may determine what should be considered “basic coverage” for consumers paying the minimum rate for insurance so that people who buy basic insurance have an assured level of coverage.

This practice is not supposed to discourage competition, or to tell companies how much they can charge for their services. Within the rate regulation framework, there is a great deal of flexibility which allows companies to make decisions about the kinds of services they want to offer, how their services should be tiered, and how many their customers should be charged for their services. Rate regulation also tends to focus on basic service, which means that higher levels of service are not subject to regulation, and consumers are on their own.

If a consumer feels that an interaction with an industry which is subject to rate regulation may be violating government standards, he or she can report the company and request an investigation. The process for doing this varies from nation to nation; contacting a local elected official is often the best way to start, as the official can provide help and a referral to the proper government office. People can find out who their local elected officials are by checking the phone book, which often has a complete listing, or by contacting City Hall or a similar government agency.

Share
SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Mary McMahon
By Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a SmartCapitalMind researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.

Discussion Comments
Mary McMahon
Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a...

Learn more
Share
https://www.smartcapitalmind.com/what-is-rate-regulation.htm
Copy this link
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.