Casualty Actuarial Society Seminar on Ratemaking March 7 - 9, 2007 REG-1: “Regulatory Roundtable...
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Transcript of Casualty Actuarial Society Seminar on Ratemaking March 7 - 9, 2007 REG-1: “Regulatory Roundtable...
Casualty Actuarial SocietySeminar on Ratemaking
March 7 - 9, 2007REG-1: “Regulatory Roundtable Discussion”
Chuck Romberger, ACAS, CPCU, ARM
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Pennsylvania
Statutory Rate Filing Requirements Climate, Process, “Hot” Issues Potential Legislation
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Statutory Rate Filing Requirements
Personal Auto Homeowners Workers Compensation Medical Malpractice & Other Commercial
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Statutory Rate Filing Requirements
Personal Auto– Prior Approval– Review period: 60 days + 30 by extension– Exception: T.31 Ch. 130 (Pers. Auto & HO)
Promotes competition Permits certain decreases in currently approved rates Decreases up to 10% either by coverage or line of ins. “File-and-Use” treatment
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Statutory Rate Filing Requirements
Homeowners– Prior Approval– Review period: 30 days + 30 by extension– Exception: T.31 Ch. 130 (Pers. Auto & HO)
(details not repeated – see Personal Auto slide)
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Statutory Rate Filing Requirements
Workers Compensation– Insurer filings
LCMs: file-and-use (30-day waiting period) Others: prior approval (30 days + 150 days by ext.)
– Exs. large deductible, sub-classifications,…
– Rating organization filings Prior approval (30 days + 150 days by extension) Must annually file loss cost revisions & insurers must
adopt on the date approved (usually April 1st)
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Statutory Rate Filing Requirements
Medical Malpractice & Other Com’l (1 of 2)– Large Commercial Risks
No filing requirement!
– JUA & Assigned Risks Prior approval
– Review period: 45 days + 45 days by extension
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Statutory Rate Filing Requirements
Medical Malpractice & Other Com’l (2 of 2)– Small commercial risks
Prior approval: initial rates & changes >10% in agg.– Review period: 45 days + 45 days by extension
File-and-Use: changes 10% or less in agg.– Waiting period: 45 days
Use-and-File: rates for individual insureds (25%)– File within 30 days of effective date
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Statutory Rate Filing Requirements
For additional information on Pennsylvania’s filing requirements, please see our website at: http://www.ins.state.pa.us/ins/cwp/view.asp?a=1280&Q=545457
Or e-mail me:
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Climate, Process, “Hot” Issues
Personal Auto– Top 20 writers are requested to provide extensive
data for Department analysis– Department considers rate indications at a level
between statewide & company rating territories for all companies
– We frequently see Phila. indications below R.O.S., consistent w/ ISO & PCI Stat Data
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Climate, Process, “Hot” Issues
Homeowners– Top 20 writers are requested to provide additional
data for Department analysis– Department closely monitors any potential
reductions in coverage or limits
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Climate, Process, “Hot” Issues
Personal Auto & Homeowners– Non-Traditional Rating Approaches (1 of 2)
More tiers & rating territories Rating territories varying by coverage Complex rating variables & algorithms New & unusual characteristics being considered
– Ex. number of flower shops per area or home improvement stores sales per area…
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Climate, Process, “Hot” Issues
Personal Auto & Homeowners– Non-Traditional Rating Approaches (2 of 2)
Main concerns – Renewal impacts (conflicts with our laws & regulations)– Fairness, accuracy and potential disparate impacts
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Climate, Process, “Hot” Issues
Workers Compensation– Companies are required to adopt bureau loss
costs on the date approved by the Department– Companies can modify LCMs at any time
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Climate, Process, “Hot” Issues
Medical Malpractice & Other Com’l– 2007 Med Mal Capacity Study is underway
Limits are currently $500,000/$1,500,000 Comm. didn’t find sufficient capacity in 2005
– Physician & Surgeon rates have not changed much since 2005
– Many new writers in the market in the last 5 years 7 domestics, 6 foreign, 2 surplus lines, & 38 RRGs
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Potential Legislation
Personal Auto – HB 34 (2007)– (A change to “plain language”?)– Amend “tort” to “right to sue”– Increase the minimum limits under the MVFRL
From 15/30/5/5 to 25/50/10/10
– Require stacked UM/UIM @ BI limits– Require an extensive “menu” of coverage options– Possibly require Comp & Coll
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Potential Legislation
Credit / Insurance Scoring – HB 94 (2007)– Legislative proposals are submitted on this topic
almost annually in Pennsylvania. – Scoring is not directly addressed in our law…
currently.– Underwriting guidelines/practices do not required
our prior review and/or approval.– We have not approved a personal lines rate/rule
filing that contains credit scoring.
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Questions???