Agent Reunderwriting Guidelines Reference...

Agent Reunderwriting Guidelines Reference Manual

DSD393

12/26/2018

Revised

© 2002 Erie Indemnity Company. All rights reserved.

The information in this publication is a trade secret and/or confidential and proprietary to members of Erie Insurance Group. Use of this information is restricted to individuals performing Erie Insurance Group business. It may not be disclosed to any third party without the express permission of Erie Insurance Group. Any other use of this confidential and proprietary information is prohibited. Reproduction in whole or in part is prohibited without express written permission of Erie Insurance Group.

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Preface This manual contains information on reunderwriting personal auto policies, homeowners policies, and commercial lines policies. The audiences for this manual are Agents and underwriters.

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iv Agent Reunderwriting Guidelines Reference Manual 12/26/2018

Contents Preface ...................................................................................................................................................... iii 1. Introduction .......................................................................................................................................... 1

What is reunderwriting? ..................................................................................................................... 1 Reunderwriting overview ................................................................................................................... 2 The basics of reunderwriting ............................................................................................................. 3 Annual review ................................................................................................................................... 5 Reunderwriting: A continuous review process ................................................................................... 6 Address claims one by one as they happen ....................................................................................... 7 Beyond rehabilitation ......................................................................................................................... 7 Reunderwriting methods and tools ..................................................................................................... 8 Database searches ........................................................................................................................... 8 Reunderwriting checklists ................................................................................................................ 10

2. Reunderwriting Personal Auto Policies ............................................................................................... 12 What do I need to get started? ........................................................................................................ 12 What should I expect as I begin the process? ................................................................................. 12 Problem accounts ........................................................................................................................... 12 How do I get started? ...................................................................................................................... 12 When the policy is being endorsed or serviced ................................................................................ 13 When a claim has been submitted .................................................................................................. 16 When the policy is going to renew ................................................................................................... 17 Other questions to ask when reunderwriting .................................................................................... 19

3. Reunderwriting Homeowners Policies ................................................................................................. 21 Opportunities to reunderwrite .......................................................................................................... 21 Other questions to ask when reunderwriting .................................................................................... 22 Unknown exposures ........................................................................................................................ 23

4. Reunderwriting Commercial Lines Policies ......................................................................................... 24 Reunderwriting your commercial book of business ........................................................................... 24 Reunderwriting for garage/auto ....................................................................................................... 25 Reunderwriting for Commercial Auto ............................................................................................... 26 Reunderwriting for package policies including Ultraflex, Ultrapack Plus, and Fivestar ...................... 27 Reunderwriting for workers' compensation ...................................................................................... 29 Risk control resources ........................................................................................................................ 30 Value Added Services ..................................................................................................................... 30

5. Reunderwriting Tips ........................................................................................................................... 32 When is the best time to reunderwrite? ........................................................................................... 32 What is reunderwriting’s best tool?.................................................................................................. 32 Annual review checklists ................................................................................................................. 32

A. Appendix ............................................................................................................................................ 34 State cancellation laws for Personal Auto ........................................................................................ 34 State cancellation laws for homeowners .......................................................................................... 51 State cancellation laws for commercial lines of business ................................................................ 60

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1. Introduction Reunderwriting is an important part of your business. This chapter discusses the importance of reunderwriting and contains information that is relevant to all lines of business.

What is reunderwriting? Definition Reunderwriting is the annual systematic review of all your accounts and the implementation of any changes necessary to make your book of business profitable.

Goals Reunderwriting is a systematic process of reviewing accounts to ensure that the premium to exposure equation is in balance. Reunderwriting offers the opportunity to proactively identify accounts that are problematic, or potentially problematic, and effectively deal with the underlying issues. The goals of reunderwriting are to ensure that profitable accounts remain that way and deteriorating accounts are returned to profitability whenever possible.

Underwriting again Reunderwriting is, by its terms, “underwriting again”, and as such, the same three options available when the account was originally underwritten are present in the reunderwriting process. The account:

● Can be reaccepted as currently structured. ● Can be reaccepted with appropriate modifications. ● Must be placed elsewhere.

Conducted at agency level Just as underwriting is primarily conducted at the agency level, so is reunderwriting. The ERIE will, of course, assist an agency whenever appropriate.

Ongoing process Reunderwriting is an ongoing process that should be understood and practiced by everyone in the agency. As noted, the objective is to maintain an account's good standing or return it to good standing and not to simply part company with business. While this option is appropriate in a small percentage of cases, it is a last resort that should be used only when all other options have been exhausted.

Effective vs. ineffective reunderwriting Perhaps as important as understanding what constitutes effective reunderwriting is understanding what does not qualify as effective reunderwriting. Simply raising coverage limits, increasing deductibles, or reviewing claims after they have occurred are activities frequently referred to as constituting reunderwriting programs. While these activities often form a part of an effective reunderwriting program, taken alone they do little to identify problems and address them before an account deteriorates to a point at which it is unsalvageable.

Effective reunderwriting is the logical complement to effective underwriting, and while there are no guarantees, this combination has proven to be a common thread among ERIE's consistently profitable agencies.

2 Agent Reunderwriting Guidelines Reference Manual 12/26/2018

Reunderwriting overview Why reunderwrite? Reunderwriting does the following:

● Gives you an opportunity to identify problem accounts. ● Reveals the existence of additional exposures (increases in hazard). ● Allows you to identify trends that can lead to problems. ● Leads to increased customer contact. ● Provides you with the perfect opportunity to conduct an account review. ● Can lead to increased sales through cross sales to your existing Policyholders. ● Leads to increased referrals through increased contact with your current customers. ● Helps to improve overall agency retention. ● Helps protect competitiveness in your marketing territory. ● Helps minimize E&O exposures. ● Helps maximize agency revenue (Founders' Award).

The future of your business The future of your business is at stake. Each one of you has invested your talents into your agency, and for many of you, your agency is a major part of your retirement plan. Reunderwriting gives you the opportunity to maximize the value of your agency. Better loss ratios mean higher market value for your agency at the time of sale. Better loss ratios also mean more bargaining power during the sales negotiation. Effective and continuous underwriting and reunderwriting can increase earnings during the life of your agency and at the time of an agency sale.

Things to consider Consider the following when reunderwriting:

● Principal Agents must remain involved in the process and not simply delegate reunderwriting to employees with no authority, responsibility, or training.

● Be proactive, not reactive: • Review the newspaper for DUIs, arrests, bankruptcies, divorces, etc. • Consider investing time and money into ERIE’s reunderwriting programs such as Inspect &

Protect and Get Fit. ● Conduct database searches using InquERIE to assist in identifying problem accounts. ● Frequency usually leads to severity. ● Generally, a distinctive minority of your book of business will cause the majority of the problems. ● Once problem accounts have been identified, be proactive and take appropriate action ASAP.

Based on the severity of the situation, appropriate action may range from a simple letter or phone call to a meeting with the client. Selling the client on finding coverage elsewhere can also be an option.

● Charging the appropriate rate for the exposure is fair to everyone involved. ● Be familiar with the cancellation and nonrenewal laws of each state in which you are licensed.

(They are included in this manual.) ● Reunderwriting deals with a client's behavior, experience, and attitude. Do not allow it to become

personal. ● Always conduct yourself and your business ethically.

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The basics of reunderwriting Analyze your policyholders’ needs The reunderwriting process gives you the opportunity to thoroughly and professionally analyze your Policyholders' needs and provide them with additional protection. When should accounts be reviewed? Review each account approximately 120 days prior to renewal. Reviewing at such an early date allows you to make any necessary changes to the policy before a renewal policy is issued. This alleviates the extra work required if your agency would have to amend both a current policy and a renewal policy that has already been issued. On commercial accounts, an annual review is important from both a risk management and a reunderwriting standpoint.

The logical starting point Review the claims history Once you have selected an account for review, the logical starting point is to review the claims history of the account. Your initial questions are simple: Are the claims history and the exposures of this account acceptable?

Would you insure this individual or business today as new business based on the record they have generated with your agency or the current exposure presented to your agency?

● If both answers are Yes, then continue with reunderwriting the account. ● If one or both answers is No, then determine if the account can be salvaged.

Review the rating factors This is where your questioning techniques come into play. Contact your Policyholder and question the factors that affect the rating of the policy. Probe for additional information and make sure that the information you have is correct and complete. Make any necessary changes to ensure that your agency and The ERIE are receiving the proper premium for the exposure being insured. It is important to question each driver individually to discuss their driving record and vehicle coverage. Review the coverages After the rating factors have been verified or corrected, it is time to review the coverages on the policy. This may involve an in-depth discussion with the Policyholder about changes to exposures or new exposures. If the coverages are not appropriate for the Policyholder, suggest changes. If the Policyholder declines to make changes that you feel would be beneficial, document your offer to the Policyholder in writing. This will not only reinforce the importance of your recommendations to the Policyholder, but also provide you with valuable errors and omissions protection in the future. Look for cross-selling opportunities Finally, after you have reviewed the claims history, rating factors, and coverages, and are comfortable with the account, look for cross-selling opportunities. Educate the Policyholder on the many benefits of having all insurance policies with the Erie Insurance Group, and emphasize the valuable service provided by both ERIE and your agency.

If the account can be salvaged If the account can be salvaged, you have the following options:

● You can renew the account in its current state, usually after counseling the Policyholder and making him or her aware of the claims history on the account.

● You can also renew the account with modifications. Be sure to contact your underwriter prior to taking any action of this type, so that you and your underwriter can work as a team to determine an effective solution that is compliant with state laws.


If the account cannot be salvaged If the account cannot be salvaged, it is time to have a discussion with the Policyholder about the consequences of the claims history or the exposures on the account. Following your discussion with the Policyholder, you should then involve your underwriter so that appropriate action may be taken. One option for the Policyholder to consider is switching to another carrier before the account is non-renewed. Discuss this option and its benefits with your Policyholder.

Workflow for reunderwriting Figure 1.1 – Reunderwriting Workflow

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Annual review Benefits of an annual review Part of a good reunderwriting program is being familiar with your clients. An annual account review is an excellent opportunity to reunderwrite while simultaneously enhancing production and retention.

In many cases, Agents comment that their book of business is too large to contact every Policyholder annually. Some believe that their staff simply cannot afford the time necessary to contact everyone. Actually, an agency cannot afford not to contact every Policyholder on an annual basis. The benefits are too numerous to ignore:

● Increased profitability

● Increased production

● Improved account retention

● Identify and treat new exposures

Increased profitability Using the annual review as a reunderwriting tool can increase profitability. When a potential or current problem situation is identified, it should immediately be referred to the agency principal for appropriate action.

Increased production The annual review can be an opportunity to suggest higher limits and revise coverages, when warranted, as well as offer ERIE Family Life (EFL) products. As your Policyholders’ lives change, so will their needs. New children give rise to the need for additional life insurance and higher limits of liability for future financial stability.

For example: When a Policyholder has young children, it is likely that other children will be around more often. In addition, attractive nuisances, such as a swimming pool or trampoline, may now be present. The potential liability has increased and a PCL policy may be appropriate.

Improved account retention By establishing a relationship with your Policyholders, you will enhance your role as a complete insurance provider and improve retention. Experts agree that retention is greatly improved when the number of policies an Agent has in the household increases. Also, providing a variety of coverages enhances the relationships the Agent has established with clients.

Identify and treat new exposures Other risk factors that may develop over time include:

● New hobbies

● Home additions, such as decks, extra rooms, and wood stoves

● Home-based businesses

● Children acquiring driving permits or nearing driving age. These situations offer the opportunity to revise coverages and an important avenue for reunderwriting.

In summary Do all of the following when performing an annual review:

● Review every account 120 days prior to renewal.

● Contact every Policyholder by telephone, in writing, or in person.


● Visit each commercial client annually in consideration of the nature of commercial risks.

● Use the annual review as an opportunity to increase production.

● Suggest additional coverages or higher limits, when warranted.

● Offer additional policies.

● Seize every opportunity to reunderwrite an account.

● Always include a life insurance review as part of your annual customer contact.

● Always ask for referrals. If you follow these guidelines, improved loss ratio, improved retention, additional sales and customer satisfaction are likely to follow.

Reunderwriting: A continuous review process Review monthly claim reports Monthly claim reports should be used to identify recent claims. Unusual and preventable claims should be identified and closely reviewed. Also, each account appearing on the monthly claims run should be thoroughly reviewed for previous problems. Additional action should be taken as needed.

Review claims at time of loss When a loss occurs, it makes sense to thoroughly review the account at that time.

Identify new exposures As mentioned earlier, your accounts are not static, and exposures are constantly changing. New claims should be closely reviewed to identify new exposures.

Identify new drivers When performing an annual review, birth dates of children should be noted in an attempt to identify potential new drivers. Other changes that could enable other drivers’ access to the insured vehicle should be noted as well, such as changes to marital status or co-residence.

Identify deteriorating records of existing drivers One driver on a family auto policy can make the entire account unprofitable. Accounts should be closely reviewed to identify patterns of deteriorating driving from an individual driver. Review the newspaper in your marketing area daily Review local newspapers in your marketing area so you know when your Policyholders make the news. Clip and file anything that may affect the coverages or insurability of your accounts.

Immediate action Events requiring immediate action include:

● Arrests

● Convictions

● Unreported accidents

Know what is going on in your community The more involved you are in the community you service, the more knowledgeable you will be about the risks you insure.

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Address claims one by one as they happen Benefits of Policyholder contact and review Besides attempting to prevent future claims, Policyholder contact and review following a claim are good for building relationships with your Policyholders. This is an excellent time to review deductibles and increases in limits, as well as offer additional coverages. I t is a perfect opportunity to make sure your Policyholder is satisfied with our claims handling process and obtain referrals. Most importantly, you have the opportunity to make your Policyholders aware of the consequences of future claims.

Beyond rehabilitation Determining that an account is beyond rehabilitation Unfortunately, you may have an account that is beyond rehabilitation. Several preventable claims may have occurred in a short period. Other situations may involve violations of underwriting guidelines, failure to comply with policy conditions, or chronic nonpayment of premiums. A combination of these situations may occur. It is important to note that the ultimate determination that an account is beyond rehabilitation should be made by the agency principal after consulting with the underwriter. When this decision is made, you should have a personal meeting with your Policyholder and explain the situation.

Basic guidelines for meeting with a Policyholder When meeting with a Policyholder on an account that has been determined to be beyond rehabilitation, the following basic guidelines are helpful:

● Approach the situation from a professional standpoint.

• Do not insult your Policyholder into taking his or her business elsewhere.

• Good service and professionalism should never be jeopardized.

● Explain to the Policyholder that your goal is to maintain a profitable book of business.

● Identify the account loss ratio and review it with the Policyholder.

● Advise the Policyholder of the status of the account.

● Review each claim that has been submitted and known violations.

• Identify claims that you feel could have been prevented and indicate how they could have been prevented.

• Review the conversation you had with the Policyholder following each claim and refer to any correspondence that followed these conversations.

● Explain the average time between losses corresponding to the respective line of business.

● Inform the Policyholder their account needs to be placed with another company offering a premium plan not offered by The ERIE.

• Discuss the Policyholder's future insurability with The ERIE or with other carriers and the possible corresponding financial consequences of continued poor experience.

• Above all, be professional. The objective of this process is to keep your Policyholder's best interests in mind at all times.

Provide the best possible service It is important to remember that under no circumstances does The ERIE condone or recommend that you provide a lower level of service to any Policyholder. Even when a Policyholder refuses to voluntarily place his or her business elsewhere, we owe it to this client to provide the best possible service. Again, this approach is intended to serve the Policyholder's best interests.


Reunderwriting methods and tools Develop a method that works for you There are many methods of reunderwriting, some of which are identified in this document. Your DSM and underwriters can help you develop an approach that works for you and your agency. In addition, other Agents in your district and branch may be able to assist you in this process. However, your first point of contact in developing a new reunderwriting plan should always be your DSM. Additional techniques Additional techniques not covered in this document, but regularly used by Agents, are listed below. Consult your DSM for more information regarding these techniques.

● New driver video presentation

● Video designed to show teenagers the results of drinking and driving

● Agency-generated questionnaires

● Agency-ordered MVRs using the agency-paid Frontline Account

Company-sponsored reunderwriting tools Contact your DSM or underwriter to implement the following:

● Commercial Services reinspections

● Safety meetings with your commercial Policyholders

● Commercial automobile safety training programs

● Safety posters

● Get Fit (Personal Auto)

● Inspect & Protect (Home)

Database searches Access various reunderwriting information InquERIE Through ERIE's automated systems, an agency can access various types of information, including coverages amounts, payment problems, policy information, and claims histories. By using the database search feature, an agency can construct searches to sort this information and identify specific accounts for reunderwriting purposes. Most popular searches The following are database searches that have become the most useful:

● Claims frequency

● Claims severity

● Renewals

● Short rates

● Minimum BI (Bodily Injury) limits

● Stand-alone policies These searches should be conducted 120 days in advance of policy renewal.

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Sample searches The sample searches that follow are designed for January renewals and can be altered as the year progresses. By using the loss year field in the frequency and severity searches, we have limited the search to only include Policyholders with claims in 2000 and/or 2001. Searches can be altered to reflect the agency's preferences. ADS searches Claims frequency This search identifies customers with more than one claim who have policies renewing in January. Insured Name * Effective Month = 01 Total Claims > 0001 Renew = 1 Loss Year = 00 Loss Year = 01 Claim Description *

Claims severity This search identifies Policyholders with over a 50% loss payment to paid premium ratio per policy basis renewing in January. Insured Name * Effective Month = 01 Paid to Written > 0050 Loss Year = 00 Loss Year = 01 Renew = 1 Claim Description *

Renewal lists This search identifies all Policyholders renewing in January and provides basic loss information. Insured Name * Effective Month = 01 Total Claims * Paid/Written * Renew = 1 DSpro searches The following searches are appropriate for agencies that are operating ERIE's DSpro system: Claims frequency This search identifies customers with more than one claim who have policies renewing in January. Claims Total 2 and

Claims Activity Month Year > 122001 and Claim Number like % and Claim Description like % and Line of Business like


Claims severity This search identifies Policyholders with over a 50% loss payment to paid premium ratio per policy basis renewing in January.

Line of Business is not empty and Claims loss Ratio > 050 and Claim Number like

Renewal lists This search identifies all Policyholders renewing in January and provides basic loss information.

Insured name * and Effective date > 01012002 and Claims total is not empty Renew = 1

Tool for reunderwriting Agencies that effectively reunderwrite recognize database searches as a tool useful for reunderwriting. This tool, however, does not replace direct contact with the Policyholder. As this document highlights, identifying potential problems based on current information is only a portion of the reunderwriting process. Uncovering new information, communicating recommendations, determining proper classifications and valuation, and counseling insureds remain crucial elements of an effective reunderwriting program.

Additional uses Additional uses for database searches can include identifying any of the following:

● Auto Policyholders without homeowners coverage with ERIE ● Home Policyholders without auto coverage with ERIE ● Payment problems ● Life policy conversion opportunities ● Driver and non-driver age ranges ● Low liability limits ● Low deductibles ● Types of claims ● Open reserves ● Loss dates

If you would like more information on database searches, contact your DSM or the ERIE Systems Call Center (814-870-3311)for assistance.

Reunderwriting checklists Purpose ERIE Reunderwriting Checklists can guide your account review procedures. Refer to the checklists when an account comes up for review at renewal, when a claim is reported, or when a policy change is made.

Obtaining the checklists To obtain the checklists, do the following:

1. Log on to Agent Exchange. 2. Select any product from the Personal tab on the Quick Product Help tab. 3. Select the Underwriting tab. 4. Click the Resources link. 5. Click Annual Review Questionnaire. 6. Optional: If you do not have Adobe Acrobat Reader on your PC, follow the steps on screen to

https://portal.agentexchange.com/Pages/default.aspx

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install it and continue with this procedure. Adobe Acrobat Reader is needed to view the PDF. 7. Print the checklists.

a. Click File on the menu bar. b. Click Print on the File menu. c. Click Print.

Result: The checklists print. 8. Use the checklists when reunderwriting policies.


2. Reunderwriting Personal Auto Policies What do I need to get started? The tools you need to reunderwrite your book of personal auto business are time, energy, information, and good common sense. With these basic tools, you can easily review your personal auto files and identify those relatively few accounts that require significant underwriting action.

What should I expect as I begin the process? The majority of accounts are up-to-date; however, some do not have correct rate classes on the policy and others are insuring unknown drivers or drivers with borderline or below average records. The process of reunderwriting requires that you:

1. Update all your accounts, especially driver and rating information, at least annually.

2. Identify all problem accounts.

3. Take appropriate action on problem accounts. You need to update accounts because Policyholders often fail to notify their Agents about changes. If someone is changing jobs, the person often does not see any reason to call the auto insurance Agent; however, the new job may require that the Policyholder use the insured vehicle for business, or the daily drive to work could be a few miles shorter or longer than it used to be. Either situation could require the rate to change. Retirement may also mean an adjustment in rates or coverages.

Problem accounts Problem accounts are relatively rare, but when you do find one, and correct the problem, the rewards are great. Problem accounts that are left alone can destroy your loss ratio and jeopardize the future of your agency. What happens when I find a problem account? The action you take on a problem account depends on the situation and the laws of the state in which the Policyholder resides. Your goal is to return the account to profitability or keep it from becoming unprofitable. You may be able to do this by changing a deductible, removing a coverage or explaining the problem and getting the Policyholder to change driving habits. If that is not possible, it may be necessary to take underwriting action, when lawful and with the assistance of your underwriter, such as excluding a driver or perhaps even terminating the policy.

How do I get started? In personal auto, there are three possible times when it is appropriate to reunderwrite an account:

1. When the policy is being serviced. See When the Policy is Being Endorsed or Serviced.

2. After the submission of a claim. See When a Claim Has Been Submitted.

3. Prior to policy renewal. See When the Policy is Going to Renew .

Starting point The starting point for reviewing your Private Passenger Auto book of business is recognizing the importance of assigning proper rate classes to the vehicles you insure. Even Policyholders with good records can adversely affect the profitability of your agency if they are not paying a sufficient premium for their exposure to loss.

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Review how each vehicle is titled and being used ● How many miles to work?

● How many annual miles?

● Any business use?

● Any ride sharing?

● Any inexperienced drivers? Adjust the rate classes accordingly. How do the vehicles in your book of business compare to the current averages for annual miles driven? Statistics are available at https://www.fhwa.dot.gov/.

When the policy is being endorsed or serviced A call from a Policyholder is an opportunity to reunderwrite the account. It is a chance to update policy information while demonstrating the service for which The ERIE and its Agents are noted. There are numerous endorsements to consider. The five most common include:

● Adding a vehicle.

● Changing the Policyholder address.

● Adding a new driver.

● Deleting a driver.

● Cancelling a policy

Policyholder wants to add a vehicle to the policy Ask these questions when a Policyholder wants to add a vehicle:

● To whom is the vehicle titled?

Note: In New York it is important to ask: How is the vehicle registered? The registration has to match the named insured or they will be fined for no insurance. Also, to remove a vehicle ask for the FS6 form, which is proof that the plates were surrendered.

● Who will be driving the vehicle?

● Will the vehicle be driven to work, to school or for business use? ● Why did you decide to acquire an additional vehicle? Is there a new driver in the household, or is

a current driver (perhaps a youthful driver) driving more than before? ● What is the current odometer reading on the vehicle? This will be useful later to confirm the

long- or short-rating of the vehicle.

● Does the vehicle have any special, custom, or unusual equipment?

● Is the vehicle garaged at the address listed on the policy?

Policyholder is informing you of a change of address Ask these questions when a Policyholder is informing you of a change in address:

● How has the move changed your commute to work or school and annual miles driven?

● Are all vehicles garaged at the new residence? If not, where are they garaged? ● If there is only one vehicle on the policy, check to see if the vehicle is receiving the multi-car

and/or multi-policy discounts. Does the Policyholder still qualify for those discounts? ● Is the Policyholder moving in with someone else? Is there a need to obtain the driving record of

https://www.fhwa.dot.gov/


the residents in the new household? ● Are any other policies affected by this change? Perhaps this individual is the child of a

Policyholder and the parents' policy only insures one vehicle so the multi-car discount no longer applies.

● If the move is out of state, what is the reason for the move and is it permanent or temporary? If temporary, when will the Policyholder return?

● Finally, if the Policyholder provides only a P.O. Box or mailing address, what is the actual residence address?

Policyholder asks to add a new driver to the policy Ask these questions when a Policyholder wants to add a new driver to the policy:

● Is the driver newly licensed? Newly licensed drivers are added and rated on ERIE policies on the date they obtain their license.

● If the driver is newly licensed, is he or she the age that drivers usually get licensed in your state? Example: If a Policyholder calls to say her 21-year-old son just obtained his permit, it is important to determine the reason for the 5-year delay since most children become licensed around age 16 or shortly thereafter. The reason is usually very innocent, but sometimes a judge denies a person the right to obtain a license for many years because of a serious offense.

Schedule an appointment to meet with the new driver to discuss the responsibilities that accompany the new license. Emphasize the importance of driving in a safe and responsible manner, and protecting his or her insurance record. Review the statistics involving accident frequency for inexperienced operators. Statistics are available on these websites:

o https://www.iihs.org/ o https://www.cdc.gov/ o https://www.nhtsa.gov/

● We require that a licensed spouse is added to the policy as a driver even if he or she owns a

vehicle that is insured with another company. We must either obtain a Driver Questionnaire or exclude the new spouse (if allowed by state law). If you are unable to either obtain a Driver Questionnaire or exclude the driver, we reserve the right to terminate the entire policy at the first legal opportunity.

You may learn that someone is residing in the household and the person is not a driver of an insured vehicle. Anyone residing in the household (friends, fiance’, roommates, relatives etc.) should be underwritten. Obtain a Driver Questionnaire and add that person as a non-driver even if the individual already has insurance. If you find the person does not have an average record, you should exclude him or her, if permitted by state law. If exclusions are not permitted, contact your underwriter to discuss available options.

Policyholder calls to delete a driver from the policy There are two different scenarios. The first is the driver to be deleted is a spouse. In the second case, the individual to be deleted is just a driver under the policy. We will address the spouse issue first because it is the most difficult. Always find out if the person to be removed has actually left the household. If the person removed still lives in the household, then it is a good idea to check the driving record and find out if he or she has a car and other insurance. If not, and you remove the person from the policy, then all you have done is remove the person's name and perhaps the rate. Chances are the exposure remains. Deleting a spouse It is important that you treat each spouse similarly, even if only one is listed as a named insured. You

https://www.iihs.org/

https://www.cdc.gov/

https://www.nhtsa.gov/

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should try to contact the other spouse and confirm that other coverage has been obtained before you remove that person or any vehicle from the policy.

In some cases, both individuals are named insured and one person will refuse to sign a transfer of interest. If this occurs, you can either let the policy lapse for nonpayment of premium or ask the more willing individual to sign over the original policy to the other spouse. You can then rewrite the cooperative individual on a new policy. If the individual was a driver on the policy from the beginning, he or she will normally be allowed to keep the origin date of the initial policy. Deleting an individual When the individual to be removed is not a spouse, and therefore not a named insured, the situation is considerably less complicated; however, there are times when you must go beyond the initial comment of the Policyholder to find out why the person should be removed as a driver. Did the person move out of the house? You need to ask why the person moved because in some cases, the person has gone away to college. In that case, a rate would still be appropriate because a college student is still considered a resident of the household. In other cases, you may be told is that the person is no longer driving. The first question to ask is “Why?” The person could no longer be driving because of suspended or revoked license privileges. It is necessary, in these cases, to take underwriting action (exclusion or termination) depending on state law.

Policyholder calls to cancel the policy ERIE's retention ratio is one of the best in the industry. When someone leaves us, we want to find out why and need your help to obtain this information. There are a number of reasons for someone to purchase other insurance. In many cases, there is nothing you can do about it.

For example: Perhaps the Policyholder got married and was added to the spouse's policy, which happens to be with another insurance company, or the individual is moving out of state, sold the car, etc.

If the person found insurance from a competitor at a considerably lower rate, then we would like to know about it. Our competitive position is very important to both of us. If you could get a declarations page from the new company and forward it to our Actuarial Division, we might, if appropriate, be able to make some adjustments the next time rates are reviewed in your state. We do not expect to offer the lowest price in every situation; however, if a competitor is consistently beating our prices by a significant amount, then we might respond if our loss ratio in the area is favorable. It is rare that we are beaten by a large dollar difference, and oftentimes, the difference is found to be the result of differences in rating, mileage, limits, coverages, or drivers. Pointing these differences out to your customer could well save the account. If you discover that your Policyholder has been sold a policy with reduced averages or incorrect classifications/rates, advise him or her to have the premium corrected as for the true exposure. In many cases, the premium advantage disappears.

Does the cancellation affect another policy? After you have cancelled the policy in question, make sure the cancellation does not affect other policies in your agency.

Example: You should remove the multi-policy discount if the person has a Homeowners policy. Perhaps a policy for a relative should no longer receive the multi-car discount. Perhaps a young driver rate needs to be added back on to the policy.


When a claim has been submitted Servicing claims provides an opportunity for your agency and The ERIE to demonstrate our promise of service. This is a chance to reinforce your Policyholders' decision to purchase coverage from Erie Insurance through your agency and analyze their PPA policy.

Note: It is important to reunderwrite in a way that ensures that your Policyholders feel that they are being treated with respect and receiving the service they deserve.

Your underwriter's role At-fault accidents are automatically referred to your underwriter. Not at-fault claims (medical, comprehensive, uninsured motorists, etc.) are reviewed only when the Claims Division or an Agent brings a claim to the underwriter's attention. If you have concerns about at-fault accidents, you can be sure your underwriter is aware of the situation. If your concerns are about not at-fault incidents, ask your underwriter to look into the account.

After a claim has been reported Obviously, there is nothing you can do about a claim that just happened. The life of your Policyholder and his or her driving record has changed, though, requiring that you reevaluate the risk and determine if the policy is an average or above average account. Review:

● The driver. ● The time and location of the accident. ● Claims frequency.

Start with the driver Ask yourself these questions:

● Who was driving, and is the person a resident of the household? ● Is the person listed on the policy as a driver?

In the vast majority of cases, the person is listed. But sometimes it is not that easy. If the driver is not listed, then usually he or she is:

● An undisclosed regular driver. You should get a Driver Questionnaire and underwrite the exposure. If the driver is a youthful operator, we can go back and make a charge for the exposure. We normally go back the current year plus one additional year; however, we reserve the right to go back even further if the Agent and underwriting management agree it is appropriate. We do not want to reward Policyholders for failing to disclose drivers. The situation is viewed as a material misrepresentation and a violation of policy conditions. In some situations, the policy might even be terminated.

● A one-time user of the vehicle. In that case, usually the only thing you can do is caution your Policyholder about the danger of letting someone borrow the vehicle. Some people do not know that if they lend their car, they lend their insurance and that they are responsible for the damages caused in any accident.

Check the rest of the driver record If the driver is listed on the policy, review the driver's record. Ask yourself these questions:

● Is this the driver's first accident? If not, what is the entire record? ● Is the person still an average driver?

Review the entire claim record Also review the entire claim record on the policy. Focus on the at-fault accidents. How many have been submitted and by how many different drivers?

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If a youthful operator was involved in the accident, check to see if the individual is rated on the car involved in the accident. If not, perhaps the youthful operator should be rated since he or she is obviously driving the insured car.

Look at the time and location of the accident You can learn a lot about how a policy should be rated by looking at when and where claims occur. Example: If someone tells you a child is an occasional driver, that child should not be having losses after midnight or in the school parking lot. In such a case, ask yourself these questions:

● Did the loss happen on or near a college campus? If so, is the child receiving our discount on the assumption he or she does not have a vehicle at school?

● Is the car rated for pleasure and did the accident happen on the way to work? ● Is the policy rated as driving only three miles to work but the claim happened 10 miles from

home on the way to work? Question the obvious and notice the subtle. You will occasionally encounter a Policyholder willing to shade the truth to get lower rates. Because of this sad situation, it is important that you question answers that are not supported by the facts.

Even the best can go bad Unfortunately, even the best of accounts can go bad and require you to take some action to correct the situation. No one is exempt from claims frequency and so no one should be exempt from your reunderwriting efforts.

What if I find claim frequency? If you have a frequency problem, either multiple at-fault accidents from the same drivers or multiple drivers all having accidents on the same policy, then you need to address it. Normally, your options are limited to the following:

● A meeting with the Policyholder. During this meeting, try to convince the Policyholder to place his or her business with some other company. Considering your good service, our good rates and claim service and the effort involved on the part of the Policyholder to go shopping, you can assume this may be difficult.

● A possible exclusion. If the problem is with one driver, oftentimes it can be addressed by an exclusion if that option is available in your state. It is often difficult to get someone to agree to exclude a driver; however, many people recognize a bad driving record when they see one. If the situation is presented

● in a constructive way with viable options for insuring the problem driver, your Policyholder may be willing to work with you on a mutually agreeable solution.

● Underwriter assistance. If you are unable to get voluntary cooperation, you should contact your underwriter and start the process of getting a termination notice issued from the Home Office. Your underwriter will first look to see if state law allows a termination. If it does, the underwriter will review the entire account and decide if there are any other options. We do not terminate accounts without considering all available options. Termination is the most drastic of options and is taken only as a last resort.

When the policy is going to renew When should I start? We strongly recommend you start the process by reviewing each account approximately 120 days (four months) prior to renewal by setting up a database search. Beginning the process at this time will:

● Allow adequate time to comply with state regulations if, for some reason, a decision is reached to terminate coverage. Most states require that we provide 30-60 days’ notice to Policyholders if we intend to nonrenew a policy.


● Permit enough time to correspond with Policyholders if you need additional information or have difficulty reaching them by phone.

● Allow sufficient time to order a motor vehicle report, if necessary. ● Provide time to review the account with your underwriter without turning the account into an

urgent matter that must be resolved in a few days. ● Allow time to make the change effective at renewal, if you must endorse the policy.

Which accounts should I look at? You really need to look at every account; however, the better you know the account, the less time you will need to spend on it.

For example: If someone bought a new car 130 days prior to renewal, and you did a thorough job of reunderwriting the change, there should be little to do 120 days prior to renewal.

When looking at rate classes, there are some accounts, such as cars with principal young driver or business rates, which are already paying the maximum rate. You do not need to worry about them except to make sure all their discounts are appropriate. You need to be sure they deserve the discounts they receive and that they are getting every one they deserve. There is only one appropriate rate for each vehicle we insure. This is the perfect time to make sure that rate is the rate your Policyholder is paying, no more and no less. What should I look for? After you are sure the rate classes are correct, you need to focus on the driving records of the individuals we are insuring. This can be a little tricky because the entire driving record is rarely located in one place.

Example of Reviewing a Policy

Scenario You are reviewing a policy you wrote three years ago. It insures the son of a Policyholder who has been with your agency for 10 years. You have a commercial auto policy for the father that insures several pickup trucks for a landscaping business. Where is the son's record in your files?

Four places to look It is likely that you can find bits and pieces of the individual's driving record in at least four different places:

● Policy claim file ● Insured's original application ● Claims records of the parent's personal and commercial policies ● Database searches

Files and records to review First, review the policy claim file, including the original application and the claims records of the parent's personal and commercial policies. The son probably drove one of the pickup trucks when he worked summers in the family business. If you are insuring any other siblings, you should look at those accounts as well because you know most families share cars in the household. If the cars are all parked in a driveway, then the last one in is the first one out, regardless of whose car it is.

Review at-fault accidents carefully If at-fault accidents are in the file, review them carefully. Underwriters focus more on frequency than severity. Severity is random, so, simply put, the more accidents you have, the more likely you are to have a major accident; however, it is important to note that not all accidents are the same. You have to look at the circumstances of the loss to determine how serious the problem is. Other situations that call for a review There are a few other situations you might encounter that should prompt you to review the account very

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closely. If you encounter any of these situations, ask questions to make sure you fully understand the exposure. Look for:

● Policies with the named insured as the only driver but with more than one vehicle. Review how each vehicle is being used and ask if there are other drivers who may have custody of or are driving one or more of the vehicles.

● Policies with more miscellaneous vehicles than listed drivers. If you see two drivers and three snowmobiles or ATVs, it is often an indication one of the units is being driven by a child who is under the state legal driving age. We do not want to insure an unlicensed child driving a miscellaneous vehicle. If you find that to be the case, then notify your underwriter.

Database searches Finally, there are a number of database searches that you can use to bring almost any matter to your attention.

For example: You might want to give a more thorough review to any account with a high loss ratio (over 65% or 70%, for example), an antique car, a lay-up rate or an occasional youthful rate. Other situations might include any policy with a surcharge or a performance vehicle. This is an area where you can use your experience to decide on which accounts your time would be best spent. For information on database searches, see Database Searches.

Other questions to ask when reunderwriting Ask the right questions Asking the right questions can help you obtain the information you need to effectively reunderwrite the policy. This section contains several useful questions to ask and what to look for when reunderwriting a Private Passenger Auto policy.

Additional vehicles in the household To determine if there are additional vehicles in the household, ask the following question:

Do we presently insure all of the vehicles in your household?

Things to look for:

● New roommates ● Did the insured buy or sell a car?

Additional drivers To determine if there are additional drivers in the household, ask the following question:

Are all licensed drivers in your household and the drivers that have access to your vehicle listed on your automobile policy?

Things to look for:

● Roommates ● Live-in boyfriend or girlfriend ● Youthful drivers (obtain information on drivers with a learner’s permit to add when licensed) ● Other relatives


Usage To determine how the insured vehicles are used, ask the following question:

Are any of your vehicles used for business purposes other than driving to and from work?

Review the usage. Things to look for:

● Are the classifications accurate?

● Are all cars properly assigned to drivers?

● Are any of the cars taken away to school?

Rating annual mileage When rating annual mileage, ask the following questions:

● How many miles does vehicle 1 have? ● When did you purchase vehicle 1?

● How many miles does vehicle 2 have?

● When did you purchase vehicle 2?

Compare actual miles to long/short rating.

Tickets and unreported accidents To inquire about tickets and unreported accidents, ask the following question:

Have any drivers listed on your policy received a ticket or been involved in an accident in the past 12 months?

Things to look for:

● New accidents and tickets.

● Does the Policyholder still qualify for an ERIE policy?

● What were the circumstances of the claim?

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3. Reunderwriting Homeowners Policies

Opportunities to reunderwrite You will be presented with opportunities to reunderwrite an account on at least three possible occasions:

1. Prior to policy renewal 2. When a claim is reported 3. When the policy is being serviced

Thoroughly reviewing coverage and offering additional coverages are great ways to provide your Policyholders with the high level of service that distinguishes ERIE and your agency from the competition.

Note: If a Policyholder declines coverage you feel is appropriate, document your offer and their response in writing.

Property re-inspection program Properties change over time. Sometimes additional structures are built, such as garages, large sheds, or outbuildings. Properties may deteriorate over time due to a lack of care or maintenance. For these reasons, it is crucial that your agency have a systematic property reinspection program.

Periodically re-inspect risks, inside and out. This is a proactive method of reunderwriting. These physical examinations can also identify unknown exposures, which can then be handled in an appropriate manner.

Note: Property re-inspections can be completed with relatively little inconvenience to you and your staff. An agency with 1,500 personal property policies in-force could complete inspections every 5 years by conducting just over 5 a week. By grouping these 5 inspections by geographic location, your agency could potentially visit 5 properties in one neighborhood in very little time. In addition to the reunderwriting benefits, you will impress customers with your efforts to ensure that the property is properly insured.

Claims review Review claims history and note frequency as well as multiple claims related to the same issue. Some examples include:

• Two or more lightning losses

• Two or more sewer and drain backups

• Two or more theft losses Speak with your underwriter about possibly sending a recommendation letter suggesting/requiring the policyholder to install lightning arrestors, or a sump pump, etc. Review rating factors and current discounts to verify that they still apply. Also review renovations and additions. Home additions and renovations tend to increase the replacement cost of a house. Policyholders often fail to notify their Agents of these improvements. Properly insuring the full replacement cost of a home will ensure the proper premium is applied.

Review coverage Exposures change year to year and policyholder’s may have acquired property that is not properly insured. Review the following:

• Swimming pools

• Pets

• Incidental business operations


• Wood burning stoves

• Watercraft

• Recreational vehicles

• Jewelry

• Additional properties purchased by the policyholder

Also consider upselling the following additional coverages:

• Criminal Defense Cost Reimbursement (automatically included in Select Bundle)

• Equipment Breakdown (automatically included in Select Bundle)

• Underground Service Line (automatically included in Plus and Select Bundles)

• Earthquake

• Sinkhole

• Sewer and Drain Backup (automatically included in Plus and Select Bundles) Important: Be sure to verify if coverage is available in your state and what limits apply to each Bundle.

Other questions to ask when reunderwriting Ask the right questions Asking the right questions can help you obtain the information you need to effectively reunderwrite the policy. This section contains several useful questions to ask and what to look for when reunderwriting a homeowner's policy.

Business exposures To determine business exposures, ask the following question:

Do you have any existing businesses or are you planning on conducting a business in your home?

Things to look for:

● Unknown business exposures ● Coverage limitations

Home modifications To determine if there have been any home modifications, ask the following question:

Have you made any modifications to your home since the policy was issued or renewed?

Things to look for:

● Additions ● Updates (wiring, roof, plumbing, etc.) ● Condition of systems ● Finished basement ● Decks ● Pools

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Unknown exposures To determine unknown exposures, ask the following questions:

● Do you currently have any pets?

● Do you use any wood burning stoves, space heaters, or any other type of auxiliary heaters?

● Do you own any recreational vehicles, such as ATVs or snowmobiles?

● Do you operate a business in your home?

● Do you own any valuable jewelry? Things to look for:

● Dogs

● Exotic pets

● Multiple pets

● Livestock

● Any type of auxiliary heat

● In ground and above ground swimming pools

● Recreational vehicles and their drivers

● Businesses that are not covered

● Jewelry that is not covered

Unreported losses To determine if there have been any unreported losses, ask the following question: Have you sustained any losses since your policy was issued or renewed? Things to look for:

● Damages that were not repaired ● Potential liability claims ● Frequency trends


4. Reunderwriting Commercial Lines Policies

Reunderwriting your commercial book of business Starting point The starting point for effective commercial lines reunderwriting is up front underwriting. When writing commercial insurance, it is essential that you understand the operations of your potential Policyholder. To do this you need to gather complete information, not just fill out the applications. You need to also understand the business you are insuring as well as management skills and their approach to risk management. It is vital that you properly risk manage the account and provide proper coverages to effectively help the business owner manage his or her risk.

Ever-changing landscape Commercial insurance is an ever-changing landscape. Your commercial Policyholders' exposures change on a daily basis and, in some cases, their operations change. New employees are hired, new equipment is added, and new contracts are signed (transferring and accepting risk on a daily basis). Every contact with your Policyholder is an opportunity to update and reunderwrite each account.

Example: A call to add a driver to a Commercial Auto Policy may be an indication that you need to adjust the payroll on a Workers' Compensation policy.

Vital strategy It is vital that you stay on top of your commercial accounts at all times. One simple way for you to keep up with your Policyholders is to keep an eye out for their printed advertisements and publications. Read their newspaper advertisements and compare what they are advertising with the operations listed on their policy. Read their yellow page ads every time a new phone book comes out. This will give you an indication of new operations. Also, do not overlook Web sites for your insureds' businesses. These will provide valuable insight into your insureds' operations and additional exposures that you may need to consider in analyzing risk.

Personal contact with customer With commercial insurance, personal contact with your customer is a necessity. The simplest and most effective way is to personally deliver your commercial policy renewals. This gives you an opportunity to not just meet again with your Policyholder, but to also view the operation you are insuring.

Patronize their business In some instances, you will be able to view your Policyholders' operations throughout the course of the policy year by patronizing their businesses. When you buy products from your customers, you are not only supporting their businesses but also giving yourself an opportunity to learn more about the risk you are insuring.

It is not practical to be a continuous customer of some of your Policyholders. How many Agents truly need the services of an electrical or HVAC contractor several times throughout the policy year? For accounts such as this, make it a point to stop in to their business when driving by their locations. For contractors, consider setting up an appointment to meet with them at a job site. This will provide you with an opportunity to observe how they conduct their businesses on a daily basis.

Review policies regularly Business owners do not like surprises. They count on you to handle and, in many cases, manage their insurance program. It is vital that you have a systematic, structured program to review policies regularly. Based on the complexity of the account and type of risk, you may be visiting your Policyholder quarterly to review exposures, coverages, and losses. For other accounts, an annual review conducted 120 days prior to renewal may be sufficient.

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How to be a trusted professional Be a trusted professional to your commercial insureds. Offer solutions to small problems before they become large problems. Utilize services provided by The ERIE to assist your customers in managing their risk. These can include:

● Loss control reinspections. ● Safety meetings with your Policyholders. ● Commercial auto safety programs. ● Forklift training and other safety programs.

Unique considerations Each particular line of business in commercial insurance has its own unique considerations when reviewing policies. In the next few pages, we will visit each individual line of business and offer suggestions for areas to review and methods to manage risk.

Reunderwriting for garage/auto Loss ratio of 60% or greater It is important to identify all policies with a loss ratio of 60% or greater. Ask yourself the following questions when reviewing policies:

● Is the unprofitable loss ratio due to one large claim, or is there a claim frequency problem?

● Is the unprofitable loss ratio due to auto claims or garage operations claims?

● If the overboard loss ratio is due to one large claim, was the loss truly a “shock” loss or could you reasonably expect this type of loss with this class of business?

Causes Verify if the unprofitable loss ratio was caused by any of the following:

● Drinking ● Loss occurring after midnight ● Single vehicle loss ● Unknown driver ● Youthful driver ● Vehicle maintenance

The above conditions need special attention. Thoroughly review the claim to determine circumstances.

Note: You may want to order an MVR.

In the case of the unknown driver, a Commercial Driver Questionnaire needs to be completed. For the youthful driver who has personal use of a company-owned vehicle, you need to make certain that proper rates are being charged. All of the above losses should be discussed with your commercial lines underwriter to determine if additional action should be taken.

Caused by increase in hazard We usually do not cancel/nonrenew for one large claim unless the loss is caused by an increase in hazard or by a condition that is unacceptable to commercial underwriting.

Caused by garage operations If the unprofitable loss ratio is due to one large loss caused by garage operations, risk management may be contacted to conduct a survey to determine any unsafe conditions, to ascertain building maintenance and housekeeping, to observe management's attitude toward correcting any problems, and to identify any other problem areas. Contact your commercial underwriter to discuss the risk.


Faulty workmanship/ product claims Losses involving faulty workmanship or product claims need to be carefully reviewed. These types of losses should be discussed with your commercial lines underwriter to determine a plan of action, if any.

Claims frequency Determine if the unprofitable loss ratio is caused by claims frequency. Ask yourself the following questions when reviewing policies:

● Are claims similar in nature?

● Is the same driver involved in more than one accident?

Frequency of physical damage auto claims A frequency problem with physical damage auto claims could be addressed by increasing the deductible. In this way, the insured shares more of the loss and becomes more aware of the loss experience. If claims continue, coverage could be excluded from the policy.

Frequency of garage operations claims A frequency of garage operations claims can be a sign of carelessness, lack of training, employee turnover, or management's attitude. You should discuss the risk with your commercial underwriter. Risk Management may be able to help.

Review your risk thoroughly Thoroughly review risks to update drivers, to monitor the use of garage plates (tags), and to determine if there have been any change(s) to operations.

Discuss loss with claims personnel Discuss the circumstances of any significant losses with claims personnel. They can offer valuable insight into operations and management cooperation towards claims.

Review entire account Review the entire account for profitability. An unprofitable commercial account may require you to take action on the garage/auto policy as well as the other commercial lines of business.

Credits may be reduced/eliminated or a debit may be applied to the policy.

Reunderwriting for Commercial Auto Loss ratio of 60 % or greater It is important to identify all policies with a loss ratio of 60 % or greater. Ask yourself these questions when reviewing policies:

● Is the unprofitable loss ratio due to one large claim, or is there a claim frequency problem?

● If the overboard loss ratio is due to one large claim, was the loss truly a “shock” loss or could you reasonably expect this type of loss with this class of business?

Causes Verify if the unprofitable loss ratio was caused by any of the following:

● Drinking ● Loss occurring after midnight ● Single vehicle loss

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● Unknown driver ● Youthful driver ● Vehicle maintenance

The above conditions need special attention. Thoroughly review the claim to determine circumstances.

Note: You may want to order an MVR.

In the case of the unknown driver, a Commercial Driver Questionnaire needs to be completed. For the youthful driver who has personal use of a company-owned vehicle, you need to make certain that proper rates are being charged. All of the above losses should be discussed with your commercial lines underwriter to determine if additional action should be taken.

Caused by increase in hazard We usually do not cancel/nonrenew for one large claim unless the claim is caused by an increase in hazard or by a condition that is unacceptable to commercial underwriting.

Claims frequency Identify if the unprofitable loss ratio is caused by claims frequency. Ask yourself these questions when reviewing policies:


● Is the same driver involved in more than one accident?

Options You can increase the deductible or eliminate the coverage. An MVR should be ordered for the driver with multiple claims. Discuss the risk with your commercial underwriter. If you have a fleet policy, you may want to contact Risk Management for a survey/training program.

Review your risk thoroughly As a general practice for all your commercial auto accounts, a thorough review of your risk should be completed to determine if your schedule of vehicles is current or if physical damage coverage should be removed from older vehicles, to update drivers, and to determine if there has been any change(s) to operations that could affect policy rating.

Discuss loss with claims personnel Discuss the circumstances of any significant losses with claims personnel. They can offer valuable insight into operations and management cooperation towards claims.

Review entire account Review the entire account for profitability. An unprofitable commercial account may require you to take action on the commercial auto policy as well as the other commercial business.

Credits may be reduced/eliminated, or a debit may be applied to the policy.

Reunderwriting for package policies including Ultraflex, Ultrapack Plus, and Fivestar Loss ratio of 50 % or greater Identify all policies with a loss ratio of 50 % or greater. Ask yourself these questions when reviewing policies:

● Is the unprofitable loss ratio due to one large claim, or is there a claims frequency problem?


● Is the unprofitable loss ratio a result of property claims, liability claims, or both? We usually do not cancel/nonrenew for one loss unless the loss is caused by a significant increase in hazard or by an unsafe condition that is unacceptable to underwriting.

When to contact commercial underwriter If the unprofitable loss ratio is due to one large loss (for both property and liability), contact your commercial underwriter. Risk Management should be considered for a survey to determine any unsafe conditions, to ascertain building maintenance or housekeeping, to observe management's attitude toward correcting any conditions, or to identify any other potential problems.

Product liability losses Product liability losses need to be carefully reviewed. All product claims should be discussed with your commercial lines underwriter to determine a plan of action, if any. The product liability risk management specialist may also be consulted.

Claims frequency If the unprofitable loss ratio is due to claims frequency, identify whether the frequency is due to property claims, liability claims, or both. Ask yourself this question when reviewing policies:

Are claims similar in nature?

Examples: Theft losses, lightning losses, slips and falls, etc.

Frequency for property claims A frequency problem with property claims may be addressed by increasing the deductible. In this way, the insured shares more of the loss and becomes more aware of the loss experience. If claims persist, coverage could be excluded from the policy.

Frequency for liability claims A frequency of liability claims can be a sign of carelessness, lack of training, employee turnover, or management's attitude. While a liability deductible is available, it may be more useful to involve Risk Management for a survey. If a Policyholder is not willing to make improvements, you may not want to keep this account in your book of business.

Review the risk Review the risk with your Policyholder to determine if the account is properly classified. Ask the Policyholder these questions:

● Has there been a change in operations?

● Have any new locations or buildings been acquired since writing the risk?

● Are property coverages still insured to value (buildings, business personal property, income protection, commercial inland marine?)

Discuss loss with claims personnel Discuss the circumstances of the loss with claims personnel. They can offer valuable insight into operations, building maintenance, and management cooperation towards claims.

Review entire account Review the entire account for profitability. An unprofitable commercial account may require you to take action on the package policy and the other commercial lines of business.

Credits may be reduced/eliminated or a debit could be added to the policy.

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Reunderwriting for workers' compensation Loss ratio of 40 % or greater Identify all policies with a loss ratio of 40 % or greater. Ask yourself these questions when reviewing policies:

● Is the unprofitable loss ratio due to one large claim, or is there a claims frequency problem?

● If the overboard loss ratio is due to one large claim, was the loss truly a “shock” loss or could you reasonably have expected this type of loss with this class of business?

● Was the loss due to unsafe practices, conditions, or equipment?

One loss We usually do not cancel/nonrenew a policy for one loss.

Caused by unsafe practice or condition If the loss was due to an unsafe practice or condition, discuss the situation with your commercial underwriter. Consider getting Risk Management involved. ERIEcomp needs to be considered if it is not already implemented.

Discuss loss with claims personnel Discuss the circumstances of the loss with workers' compensation claims personnel. They can offer valuable insight into operations, employees, and management's attitudes towards claims.

Claims frequency Determine if the unprofitable loss ratio is due to claims frequency. Ask yourself these questions when reviewing the policies:


● Do the same employees keep reporting injuries? How long has the risk been insured with The ERIE?

● Have we always had a frequency problem or is it recent?

This could indicate new employees, new operations, or an expansion of operations. Talk with your insured. You may need to adjust payrolls or add a new classification.

● How many employees does the risk have?

You can reasonably expect to have more claims with 100 employees than you would with 10 employees.

● Are claims arising from unsafe practices, procedures, or equipment?

Discuss the claims situation with your commercial underwriter. You may want to consider having Risk Management visit the operation, analyze claims for any trends, or conduct training programs.

Discuss frequency with claims personnel Discuss claims frequency with workers' compensation claims personnel. They will have valuable insight into the risk and its claims problems. ERIE's claims Employees may be your best source of information for what is causing the claims.

Look for trends in frequency Your Policyholder may be unaware of trends in claims frequency. Ask yourself these questions:


● Is there a pattern to the losses?

● Are they occurring on the same days of the week or the same time of day?

If you notice a trend, share this information with your Policyholder. Review entire account Review the entire account for profitability. An unprofitable commercial account may require you to take action on the workers' compensation policy and other commercial lines of business. Ask yourself the following question:

Will removing credits make the risk profitable?

Consider adding a debit to the unprofitable policy.

Adding a deductible A deductible can be added to the policy. Not only will a deductible make your insured more claims conscious, it will also reduce the premium. This could make it easier to sell to your Policyholder.

ERIEcomp The ERIEcomp program helps to control losses. Contact your district sales manager to learn more about the ERIEcomp program.

Rewriting Consider rewriting in a different company.

Risk control resources A number of risk control resources are provided on Agent Exchange by selecting any Commercial Product, Underwriting, and Risk Control Resources link; erieinsurance.com has Risk Control service links located within each Business Insurance area explaining Risk Control services and the value they provide. These materials are updated routinely so be sure to review on a regular basis!

Value Added Services Industrial hygiene and occupational health service to help you address health hazards like noise, dust, chemicals, heat, cold and more. ERIE’s Risk Control offers industrial hygiene and occupational health services to Policyholders via a combination of in-house staff and vendors. To learn more, contact your Risk Control Consultant. OSHA 10 hour construction and general industry training is available for your customers by OSHA authorized ERIE Risk Control Consultants. To learn more, contact your Risk Control Consultant. Infrared (IR) Thermographic Surveys ERIE Insurance has partnered with Hartford Steam Boiler to offer high quality IR services to our customers, help identify trouble spots in electrical equipment and systems, and try to keep electrical issues from becoming disasters. To learn more, contact your Risk Control Consultant. Fleet Services ERIE Insurance has partnered with Orion Fleet Intelligence to support your customers’ Fleet Safety Program. This three-phase program is designed to help prevent accidents, reduce operating costs, improve driver habits, and improve fleet efficiencies through the installation of telematics and driver coaching. To learn more, contact your Risk Control Consultant.

https://portal.agentexchange.com/Pages/default.aspx

https://www.erieinsurance.com/

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Safety training Programs: CLMI Erie Insurance has partnered with Comprehensive Loss Management Inc. (CLMI) to provide our Workers Compensation customers web-based and instructor-led safety training on a variety of safety programs. To learn more, contact your Risk Control Consultant. Written safety programs: GRAINGER Erie Insurance has partnered with Grainger to offer Grainger’s Online Safety Manager for our Workers Compensation customers. Grainger provides customizable written safety programs to meet the specific needs, hazards and operations of each customer on more than 100 workplace safety & health hazards topics. To learn more, contact your Risk Control Consultant.

Disaster planning: IBHS The Insurance Institute for Business & Home Safety (IBHS) is an independent, nonprofit, scientific research and communications organization supported solely by property insurers and reinsurers. Erie Insurance is a member of IBHS and partners with this organization to stay informed on the latest research on Business and Home Safety and to provide our Agents and Policyholders with resources to help prepare and recover from natural disasters and other causes of loss. To learn more, contact your Risk Control Consultant. ISOnet Engineering & Safety Service (ISO E&S) ISO’s Web Site offers a one-stop resource for risk control information. Access to ISO’s services requires registration. Enrollment procedures are posted on Agentexchange.com. To learn more, contact your Risk Control Consultant.

Risk Control Brochure S359 (pdf updated 5/2017) is located on AgentExchange.com.


5. Reunderwriting Tips

When is the best time to reunderwrite? Best practice agencies reunderwrite continuously. These agencies capitalize on every opportunity to acquire useful information and reassess the risk. They are persistent and consistent.

What is reunderwriting’s best tool? The annual review is reunderwriting’s best tool. The annual review assures Policyholders that the Agent is taking care of their insurance needs. In the annual review, the Agent gets to know the Policyholder better. This knowledge enables the Agent to reunderwrite and cross-sell for the mutual benefit of the Policyholder and ERIE. The best time for the annual review is 90 days in advance of renewal. Prior to the annual review, review the claims history and communicate with the adjuster and your underwriter.

Annual review checklists Home

1. Consider meeting Policyholders in their homes for client convenience and to build loyalty

2. Send home questionnaire to Policyholder

3. Suggest deductible changes compatible with Policyholder’s goals and risk preference

4. Assess age of roof

5. Inquire about occupant changes

6. Inquire about changes to structure including additions and renovations

7. Inquire about business use

8. Evaluate adequacy of coverage

9. Spot check homes up for renewal with focus on those with high frequency or high loss ratio

10. Review claims history to assess: • Maintenance vs peril claims • Tree damage risk • Frequency and severity of claims

Auto 1. Review owned vehicles

2. Send auto questionnaire to policyholder

3. Assess annual mileage per vehicle

4. Inquire about business use

5. Inquire about deer losses

6. Inquire about single driver policies with multiple vehicles to learn if additional drivers exist

7. Review claims history

Other coverages and reunderwriting opportunities

1. Obtain current appraisals for inland marine coverage

2. Update autos and drivers for commercial and garage policies

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3. Complete commercial policy renewal checklist

4. Review all Policyholder requested changes for impact on other policies

5. Review non-pay cancellations each month

6. Consider working with underwriting to request scans in order to identify accounts with frequency of claims

7. Agentexchange.com ‘Reports’ tile includes various reports and tools to assist with reunderwriting efforts


A. Appendix

State cancellation laws for Personal Auto This section contains the cancellation laws that should be followed in each state when canceling policies.

Caution The ultimate decision to initiate the termination of a policy rests with the underwriter.

Questions If you have any questions or doubts about how a specific state law operates, please contact your underwriter.

District of Columbia

1. Policies affected All automobile liability policies except those covering common carriers, commercial fleets, and assigned risk business.

2. Proper grounds for cancellation during the first 30 days Any valid underwriting reason. An action based on age, color, creed, religion, sex, national origin, residency, geographic area, or any other arbitrary reason is illegal. Inquiries regarding past cancellations and nonrenewals are not permitted. The applicant and other drivers can be required to disclose their driving history only for the past three years.

3. Proper grounds for cancellation after the first 30 days a. Suspension of named insured during the policy period.

b. Suspension of the registration of an insured vehicle during policy period, if the result of the suspension is that no vehicle left on the policy is validly registered.

c. Material and willful misstatement or omission of any fact by the insured in connection with the application to The ERIE or any claim against The ERIE.

d. The insured vehicle is transferred to a person other than the insured or beneficiary. (Valid only if policy does not permit transfer or unless the vehicle, interest or use thereof is materially changed with respect to its insurability.)

e. Nonpayment of premium. 4. Proper grounds for nonrenewal

Same as Section 2. 5. Unbound applications

Refusal can be based on any valid underwriting reason (See Section 2). It is not necessary to list the reason on the rejection notice.

6. Exclusions Voluntary exclusions are permitted.

7. Notice provisions a. On all terminations, The ERIE must give 5 days’ notice to the Agent before mailing

the notice to the insured.

b. 21 days’ notice is required on all cancellations during the first 30 days and 30 days’ notice is required on all other terminations.

c. The notice must advise of appeal procedures and the existence of the District of Columbia Automobile Insurance Plan.

d. The notice must furnish proper notification required by the Federal Fair Credit Reporting

Act of 1971.

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8. Impairments No specific legal restrictions.

Illinois

1. Policies affected a. Private passenger automobile policies.

Note: Garage and assigned risk policies are not affected. b. A Binder in effect less than 60 days if it has a specific inception and expiration date

on its face. 2. Proper grounds for cancellation

a. Nonpayment of premium. b. Material misrepresentation. c. Violation of policy terms. d. Failure to disclose accidents or violations in last 36 months. e. False or fraudulent claims. f. Named insured or any other operator has:

i. License suspension. ii. Epilepsy, heart attack, etc. iii. Accident record. iv. Been convicted of endangering public safety. v. Addiction to drugs.

g. Been convicted of, or forfeited bail for, a felony or criminal negligence resulting from:

i. Death ii. Assault with a motor vehicle iii. Leaving the scene iv. Auto theft

h. Insured automobile is:

i. Defective to the extent it endangers public safety. ii. Transporting explosives or flammables. iii. An emergency vehicle. iv. Substantially changes to increase risk. v. Uninspected.

i. May not use claims to cancel. j. May not cancel or refuse to write or renew due to other carrier's refusal to write or

termination of a policy. k. Even if policy renews, can still cancel for grounds that existed before the effective date of

such renewal. l. May not cancel, refuse to write, or refuse to renew solely because the insured or another

person who customarily operates an automobile covered by the policy has had an accident while operating a motor vehicle in response to an emergency call to duty as a volunteer EMS provider.

3. Proper grounds for nonrenewal a. After the policy is in effect 5 or more years, may only use those ground set out for

cancellation OR if the insured has been given 60 days’ notice of nonrenewal. b. May not use claims closed without payment.


c. May not use age, race, color, creed, ancestry, occupation, marital status, employer, or physical handicaps.

d. May not refuse to write or renew because Agent is not located in proximity to the residence of the insured.

e. May not cancel, refuse to write, or refuse to renew solely because the insured or another person who customarily operates an automobile covered by the policy has had an accident while operating a motor vehicle in response to an emergency call to duty as a volunteer EMS provider.

4. Driver exclusions are permitted for all drivers except spouses 5. Notice provisions

a. For policies in effect less than 60 days, 30 days cancellation notice is required. b. For policies in effect 61 days or more, 30 days cancellation notice is required. c. For nonrenewals, 60 days’ notice is required. d. Can nonrenew between 31 days and 60 days but the policy shall be extended for a period

of 60 days or until the Policyholder gets other insurance. e. Nonpayment notices only require 10 days. f. Notice must include specific reason. g. Must mail to Agent and lienholder/other interests. h. Must notify of eligibility for AIP. i. Must supply loss information to insured upon request. j. Postal receipts are required.

6. Other restrictions a. Cannot agency-expire solely due to termination of the Agent. b. Cannot cancel physical damage coverages mid-term but can increase or change

deductibles and/or coverages giving 60 days’ notice at the renewal date. 7. Rescission

a. Limited to a period of one year or one policy term, whichever is less. b. Policy may be rescinded based upon a misrepresentation if the misrepresentation was

made with actual intent to deceive or materially affects wither the acceptance of the risk or the hazard assumed by the company.

Indiana 1. Policies affected

a. Private passenger automobile policies issued to an individual or husband and wife residing in the same household and insuring a private passenger or station wagon, or other four-wheel motor vehicle weighing 1,500 pounds or less and not used for business purposes (commercial vehicles thus are not affected by this law).

b. Assigned risk policies, policies with more than four vehicles, and garage policies are not affected by this law.

c. Physical damage coverages may be cancelled at any time during the policy period for reasons listed in Section 2.

2. Proper grounds for cancellation within the first 60 days Any valid underwriting reason. Notice may be sent on or before the 59th day.

3. Proper grounds for cancellation after the first 60 days

a. Nonpayment of premium. b. Denial, suspension or revocation of driver's license or motor vehicle registration of the

named insured or any operator who resides in the same household, or customarily uses an automobile insured under the policy. Denial or suspension/revocation must take place

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during the policy period. c. Named insured or any other operator who resides in the same household, or customarily

uses an automobile insured under the policy is under treatment for epilepsy or heart disease, and no Physician's Statement is furnished or uses drugs or alcoholic beverages to excess.

d. Fraud, willful misrepresentation or concealment. e. Violation of policy terms or condition. f. Resides out of state.

4. Proper grounds for nonrenewal Same as Section 2.

5. Unbound applications Any valid underwriting reason (See Section 2). It is not necessary to list the reason on the notice.

6. Exclusions Exclusions are permitted except for spouses. Indiana Law does not allow you to exclude an owner of an insured vehicle.

7. Notice provisions

a. Notice of the cancellation or nonrenewal must be mailed to the named insured not less than 20 days (we give 30 days’ notice on mid-term cancellations and nonrenewals) prior to the effective date of the cancellation or nonrenewal. Notice must be sent to the Agent 10 days prior to mailing it to the insured (Agent can waive in writing). It is not legally required to list the reason on cancellations within the first 60 days, but the reason must be listed on all other cancellations and nonrenewals; however, when we cancel during the first 60 days due to misrepresentation of the driving record as reflected on the MVR, it is our policy to briefly state the reason (e.g., “you failed to admit your driving record as shown on the attached copy of your Indiana Motor Vehicle Record”.).

b. Only 10 days’ notice is required (to insured only) if the reason is given as nonpayment. c. Notice of Indiana Automobile Insurance Plan availability is required unless cancelled for

nonpayment. 8. Right to request reason

The insured has a right to request The ERIE to furnish the reason for cancellation if not listed in the notice. The request must be mailed to The ERIE not less than 15 days prior to the effective date of the cancellation. We must respond within 5 days of receipt of the request.

9. Impairments See Section 3.c.

Kentucky

1. Policies affected a. Private passenger automobile policies issued to an individual or husband and wife

residing in the same household and insuring a private passenger or station wagon type that is not used as a public or livery conveyance for passengers, nor rented to others.

b. Any other four-wheel motor vehicle weighing 1,500 pounds or less and not used for business purposes.

c. Assigned risk policies, policies with more than four vehicles, and garage policies are not affected by this law.

2. Declination of an application for liability insurance is prohibited: a. Based upon the credit history or lack of credit history. b. Based upon previous insurance through a residual market or substandard carrier. c. Based upon race, religion, nationality, ethnic group, age, sex, or marital status.


d. Based upon another insurer previously declining to insure the applicant or terminating an existing policy in which the applicant was the named insured.

3. Proper grounds for cancellation within the first 60 days Any valid underwriting reason except for reasons listed in Section 2.


a. Nonpayment of premium. b. The driver’s license or motor vehicle registration of the named insured or any operator

who resides in the household or customarily operates a vehicle on the policy has been under suspension or revocation during the policy period or, if the policy is a renewal, during its policy period or 180 days preceding its effective date.

c. Fraud or material misrepresentation. d. Willful acts or omissions on the part of the named insured that increase any hazard

insured against. e. A determination by the insurance commissioner that policy continuation would place

the insurer in violation of the law. 5. Proper grounds for nonrenewal

Any valid underwriting reason except for reasons listed in Section 2. 6. Exclusions

Although exclusions are permitted, if the Named Excluded Person is a resident spouse or dependent of the Named Insured, then the exclusion only applies above the minimum limits required by Kentucky’s Financial Responsibility Law. We prefer to avoid exclusions for new business applications.


a. 14 days’ notice (we will give 21 days’ notice) for cancellations if the policy has been in effect for 60 days or less.

b. 21 days’ notice (we will give 21 days’ notice) for cancellations if the policy has been in effect for 60 days or more.

c. 75 days’ notice for nonrenewals. d. 14 days’ notice is required for nonpayment of premium. e. Must state specific reason.

Maryland

1. Policies affected All automobile liability policies.

2. Proper grounds for cancellation during the first 45 days Any valid underwriting reason supported by underwriting standards. The applicant and other drivers can be required to disclose their driving history only for the past three years.

3. Proper grounds for cancellation after the first 45 days a. Material misrepresentation or fraud in connection with the application, policy, or

presentation of a claim. b. A matter or issue related to the risk that constitutes a threat to public safety. c. A change in the condition of the risk that results in an increase in the hazard insured

against. d. Nonpayment of premium. e. Revocation or suspension of the driver's license or motor vehicle registration of the

named insured or a covered driver under the policy for reasons related to the driving record of the named insured or covered driver.

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4. Proper grounds for nonrenewal a. Any valid underwriting reason supported by underwriting standards, or Exchange —

operators who in the past 36 months: i. Have had two or more at-fault motor vehicle accidents whether or not

surchargeable when insured with ERIE for less than 5 years. ii. Have had three or more at-fault motor vehicle accidents whether or not

surchargeable when insured with ERIE for 5 or more years. iii. Have had three or more moving vehicle code violations when insured with ERIE for

less than 5 years. iv. Have had four or more moving vehicle code violations when insured with ERIE 5 or

more years. v. Have had any combination of more than two incidents (at-fault accidents or

violations) when insured with ERIE less than 5 years. vi. Have had any combination of more than three incidents (at-fault accidents or

violations) when insured with ERIE 5 or more years. vii. Violate Standards A 1-16, F 2, G 1-3, H 1-2 or I.

Policies in the past 36 months reporting two or more at-fault claims by unlisted operators.

Company — operators who in the past 36 months: i. Had three or more at-fault motor vehicle accidents whether or not surchargeable when

insured with ERIE for less than 5 years. ii. Had four or more at-fault motor vehicle accidents whether or not surchargeable

when insured with ERIE for 5 or more years. iii. Had three or more moving vehicle code violations when insured by ERIE less than 5

years. iv. Had four or more moving vehicle code violations when insured by ERIE for 5 or

more years. v. Had any combination of more than three incidents (at-fault accidents or violations). vi. Violate Standards A 1-16, F 3, G 1-3, H 1-2 or I.

Policies in the past 36 months reporting two or more at-fault claims by unlisted operators. b. In any case, when cancellation or nonrenewal is justified because of claims experience

or driving record, we must offer to exclude the person(s) with the adverse record and continue the policy in force, unless we know that that person is the only driver of the vehicle(s) on the policy. An action based in whole or in part upon race, color, creed, religion, sex, national origin, residency, geographic area, or any other arbitrary, capricious, or unfairly discriminatory reason is illegal. (Also see Section 8 regarding impairments.)

c. It is illegal to refuse to underwrite a new applicant because of accidents or violations more than three years old as of the effective date of the action.

5. Unbound applications Refusal can be based on any valid underwriting reason (see Section 2). It is not necessary to list the reason on the rejection notice.

6. Exclusions For mandatory exclusion offer, see Section 4.b. Also, it is permissible for the Agent to arrange for a voluntary exclusion.

7. Notice provisions a. A written notice in triplicate of any cancellation, exclusion, or nonrenewal must be sent by certified mail 45 days prior to the date of the action. Only 21 days’ notice is required for new auto applications that are cancelled within the first 45 days.


(Nonpayment of premium—30 days.) b. The notice must state clearly and specifically the reason for our action. c. The notice must also advise the insured of protection rights and of the existence of the

Maryland Automobile Insurance Fund. d. Proper notification as required by the Fair Credit and Reporting Act of 1971 must be

furnished. 8. Impairments

It is illegal to discriminate against the handicapped. The law states that companies must insure them at the lowest possible rate. Thus, in Maryland, handicapped risks will be placed only in the Exchange. If an Agent binds coverage in the Company, we will issue an Exchange policy.

An insurer could be subject to fines up to $100,000 for violating this provision of the Maryland insurance code. Refusal to complete or an unfavorable Physician’s Report will result in refusal to write, operator exclusion, or policy termination.

Note: This applies only if the handicapped person has a good driving record. Accidents or violations could cause us to place the risk in the Company or reject the risk. Risks with serious ailments or impairments should be submitted unbound with a doctor's statement.

New York

1. Grounds for cancellation in first 60 days Any valid underwriting reason.

2. Grounds for cancellation after the first 60 days Cancellation not permitted unless it is required pursuant to a program approved by the superintendent as necessary because a continuation of the present premium volume would be hazardous to the interests of the insurer, its creditors or the public, or unless it is based on one or more of the following:

a. Nonpayment. b. Suspension or revocation or named insured or anyone who customarily operates a

vehicle insured under the policy (except for administrative suspensions if the license is reinstated prior to the cancellation date).

c. Material misrepresentation. d. Fraud.

3. Grounds for conditioned continuation If we have the right to cancel, we can instead change the policy limits or eliminate coverages not required by law.

4. Grounds for nonrenewal or conditioned renewal Any valid underwriting reason; however, nonrenewals and conditional renewals are limited to 2% of the number of policies in force in each rating territory at last year-end. One additional nonrenewal or conditional renewal is permitted for every two new policies written in each such territory.

North Carolina

1. Policies affected

a. Voluntary private passenger automobile liability policies (including uninsured motorists and med pay).

b. Reinsurance Facility private passenger automobile liability policies (including uninsured motorist and med pay).*

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*For North Carolina Reinsurance Facility policies, sections 3 and 4 are not applicable. 2. Proper grounds for cancellation (anytime during policy term)

a. Nonpayment of premium. b. Named insured has become a nonresident of North Carolina and is no longer entitled to

a North Carolina policy. c. Agent no longer represents the company. d. Failure to meet requirements of corporate charter, articles of incorporation, and/or by-laws

of the insurer. e. Named insured is no longer an eligible risk under G.S. 58-37-1. f. Insurance contract has been cancelled pursuant to a power of attorney given a company

licensed pursuant to the provisions of G.S. 58-35-5. 3. Proper grounds for cancellation of physical damage and any other coverage and cession

to the North Carolina Reinsurance Facility of liability, medical payments, and uninsured motorists or combined uninsured/underinsured motorists coverage (anytime during policy term).

Any valid underwriting reason.

4. Proper grounds for cancellation of physical damage and any other coverage and cession to the North Carolina Reinsurance Facility of liability medical payments and uninsured motorists or combined uninsured/underinsured motorists coverage (at renewal).


5. Exclusions

Exclusions are not permitted in North Carolina.

6. Impairments

It is illegal to discriminate against the handicapped. Drivers with impairments should be discussed with the Home Office and, if necessary, the application should include a Physician's Statement indicating the designated driver can safely operate a motor vehicle.


a. 15 days’ notice is required for nonpayment of premium cancellation.

b. 60 days’ notice is required for cancellations and cessions.

c. Notice of cancellation of cession shall be mailed first-class to the insured shown in the declarations at the last known address.

d. Notice shall include reason for cancellation or cession.

e. Notice of cession shall advise the insured that the liability, medical payments, and uninsured/underinsured motorists coverages have been reinsured through the North Carolina Reinsurance Facility.

f. Notice of cession shall advise the insured that physical damage coverage and all other coverages have been cancelled (Towing & Labor, Extended Transportation Expense, Repair or Replacement).

g. Notice of cession shall advise the insured of any insurance coverage changes (Bodily Injury, Property Damage, Medical Payments, Uninsured/Underinsured motorists coverages.**

**Maximum liability limits allowed under a Reinsurance Facility Liability policy:

◦ 100/300 Bodily Injury ◦ 50,000 Property Damage


◦ 2,000 Medical Payments ◦ 50,000 Uninsured Motorists Property Damage

Exception: If the current policy has higher limits or the Insured requests, the liability limits may be increased to:

◦ 250/500 Bodily Injury ◦ 100,000 Property Damage ◦ 5,000 Medical Payments ◦ 50,000 Uninsured Motorists Property Damage

Note: In North Carolina, cessions, or ceding, refers to the act of placing the account (liability, med pay, and uninsured motorists coverage) in the North Carolina Reinsurance Facility (an alternative to the assigned risk pool in other states). In order to maintain the higher limits as indicated in the exception above, the Applicant/Insured must complete the form NCRF31 and forward it to the Home Office.

Ohio For policy renewals effective September 22, 2013 or later In Ohio, all auto policies must be issued for a period of not less than one year or guaranteed renewable for successive policy periods totaling not less than one year. Therefore, the rules governing mandatory renewals are the same as those governing cancellation after the first 90 days.

For policy renewals prior to September 22, 2013 In Ohio, all auto policies must be issued for a policy period of not less than two years or guaranteed renewable for successive policy periods totaling not less than two years. Therefore, the rules governing mandatory renewals are the same as those governing cancellation after the first 90 days.

1. Policies affected All private passenger auto liability policies issued to an individual or husband and wife residing in the same household.

2. Proper grounds for cancellation within the first 90 days Any valid underwriting reason. A cancellation based solely on national origin, creed, or race is illegal. Regarding impairments, see comments under Section 9. Previous cancellations are a valid underwriting consideration only if due to material misrepresentation on an application or submission of a claim, or if due to suspension, revocation, or expiration of the license of the named insured or principal operator.

3. Proper grounds for cancellation after the first 90 days (including refusals to renew where renewal is mandatory)

a. Misrepresentation by the insured to The ERIE of any material fact in the procurement or the renewal of the insurance or in the submission of claims.

b. Current suspension, revocation, or expiration of the license of the named insured or the principal operator. (A member of the named insured's family who is not the principal operator can be excluded for this reason but the policy cannot be cancelled.) The ending date of the suspension, revocation or expiration must have occurred within the current two year policy period.

Note: If the suspension, revocation, or expiration ends prior to the current two year policy period, underwriting may consider a named driver exclusion. (The 'two year policy period' is each second anniversary from the policy's original effective date).

For example: A policy's original effective date is 05/01/2006. A two year policy would be 05/01/06 to 05/01/08. A license suspension occurring 08/01/06 to 08/01/07 would allow us to cancel the policy with 30 days’ notice at any time before

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05/01/08. Once the policy renews after 05/01/08, we would be able to request an exclusion or pursue a future non-renewal.

c. Place of residence of the insured or state of registration or license of the insured auto is changed to a state in which The ERIE is not authorized to write auto coverage.

d. Nonpayment of premium. 4. Proper grounds for nonrenewal (where renewal is not mandatory)

Same as Section 2. 5. Unbound applications

Any valid reason (See Section 2). It is not necessary to list the reason on the notice. 6. Exclusions

Exclusions are permitted. On new business if requested to do so by the applicant, an offer must be made to exclude his or her spouse if his or her record is unacceptable.

7. Notice provisions a. Notice of the mid-term cancellation or nonrenewal must be mailed to the named insured

no less than 30 days prior to the effective date of the cancellation or nonrenewal. The specific reason for the action must be listed on all nonrenewals and mid-term cancellations. On cancellations within the first 90 days only, 21 days’ notice is required. It is not legally required to list the reason on the notice; however, when we cancel during the first 90 days due to misrepresentation of the driving record as reflected on the MVR, it is our policy to briefly state the reason (e.g., “you failed to admit your driving record as shown on the attached copy of your Ohio Motor Vehicle Record”.).

b. Notice must advise the insured of his or her right to request a review by the superintendent of insurance of the action by The ERIE.

c. No notice is required regarding availability of the Ohio Automobile Insurance Plan. 8. Right to request reason

The insured has a right to request The ERIE to supply reasons for cancellation if not listed in the notice. The ERIE must reply within 5 days of receipt of the request.

9. Impairments Cancellation or rejection due solely to an impairment is not permitted if the person has a valid license. It is permissible to request a Physician's Statement.

Pennsylvania

1. Policies affected All auto policies delivered or issued for delivery to a natural person as named insured or related individuals residing in the same household insuring vehicles of these types:

a. Private passenger or station wagon-type vehicle that is not used as a public or livery conveyance for passengers and not rented to others.

b. Any other four-wheel motor vehicle with a gross vehicle weight not exceeding 10,600 pounds, which is not principally used in the occupation of business of the insured (other than farming). Thus, commercial vehicles are not subject to the law if a private passenger vehicle and commercial vehicle are insured on the same policy; coverage on the commercial vehicle can be cancelled mid-term.

Note: Plan policies, garage policies, and policies insuring more than six vehicles are not affected by this law.

2. General guidelines a. No insurer may cancel or refuse to write or refuse to renew a policy for one or more

of these reasons:

i. Age ii. Residence or operation of a motor vehicle in a specific geographical area.


iii. Race iv. Color v. Creed vi. National origin vii. Ancestry viii. Marital status ix. Sex x. Lawful occupation xi. Refusal of another insurer to write a policy or the cancellation or nonrenewal of

an existing policy by another insurer. xii. Illness or permanent or temporary disability where the insured can medically

document that the illness/disability will not impair his/her ability to safely operate a motor vehicle.

xiii. Any accident occurring under these circumstances:

i. Automobile was lawfully parked. ii. Applicant, owner, or operator was reimbursed by the individual who was

responsible for the loss. iii. Auto was struck from the rear and the operator was not convicted of a

moving traffic violation and operator of the insured vehicle was not charged with a traffic violation.

iv. Operator of the other auto involved in the accident was convicted of a traffic violation and operator of the insured vehicle was not charged with a traffic violation.

v. Auto was struck by a “hit and run” vehicle and was reported to the police within 24 hours of the incident.

vi. Accident involved damage by contact with animals/fowl. vii. Accident involved damage caused by gravel, missiles, or falling objects. viii. Accident occurred while auto was being used in response to an emergency

call (e.g., volunteer fire department, first aid squad, etc.) ix. Accident occurred more than 36 months prior to the policy issuance date.

x. Any comprehensive loss unless intentionally caused by the insured. 3. Proper grounds for cancellation during the first 60 days

Any valid underwriting reason not prohibited by Section 2.a above. 4. Proper grounds for cancellation after the first 60 days

a. Nonpayment of premium. b. Suspension of named insured's license or motor vehicle registration during the policy

period. c. Material misrepresentation with a determination that the insured has withheld or concealed

a material fact that would have altered the acceptability of the risk had it been disclosed on the application. Not admitted accidents, violations, and suspensions occurring more than three years before the policy effective date cannot be used as a reason for cancellation.

5. Proper grounds for nonrenewal Any valid underwriting reason not specifically prohibited. In addition to the reasons listed under Section 2.a, an insurer may not refuse to renew a policy on the basis of:

a. Two or fewer moving violations in the past 2 years when the operator's record shows 5 or fewer points unless all 5 points resulted from one violation on the driver's license or

12/26/2018 DSD393 45

registration of the insured has been revoked. b. One accident within 36 months prior to the anniversary date. Exceptions must clearly

reflect an increase in hazard (e.g., at-fault drinking losses; hit and run losses where personal injury is involved, etc.).

Note: When nonrenewing for claims frequency, all claims must have occurred under the same policy number.

6. Unbound applications Can be refused on the basis of any valid underwriting reason not prohibited by Section 2.a.

a. The reason for refusal should be listed on the notice.

7. Exclusions Exclusions are permitted. Exclusion requests should be communicated directly to Policyholders from the Home Office. Pennsylvania Agents can still obtain voluntary exclusions in these situations:

a. Applicant has someone in the household with an unacceptable driving record. b. ERIE Policyholder has been nonrenewed and would like consideration for reinstatement

with an exclusion.

Note: For each of the above scenarios, please contact your underwriter to discuss. 8. Notice provisions

a. 60 days’ notice given on nonrenewals and mid-term cancellations and at least 15 days’ notice on cancellations during the first 60 days. An additional 2 days must be given after date of notice and mailing.

b. The specific reason for the action should be stated in the notice. c. The notice must advise the insured of his right to request review by the insurance

commissioner. d. It must advise the insured about eligibility through the Plan. e. The insured must be informed of insurance requirements (FR-4). f. Proper notification required by the Fair Credit & Reporting Act of 1971 must be furnished.

Tennessee

1. Policies affected Private passenger automobile liability policies.

Note: Assigned risk policies, policies insuring more than four vehicles, and policies covering garages are not affected.

2. Proper grounds for cancellation within the first 60 days Any valid underwriting reason. Notice may be sent on or before the 59th day.


a. Nonpayment of premium. b. Material misrepresentation in obtaining the policy. c. Failing to fully disclose motor vehicle accidents and traffic violations for the preceding

36 months. d. Failing to disclose information necessary for acceptance or proper rating. e. Violation of the terms or conditions of the policy. f. Making a false or fraudulent claim.


g. Suspension or revocation of driver's license of the named insured or any other customary operator within three years prior to the notice of cancellation.

h. The named insured or any other customary operator is or becomes subject to epilepsy or heart attacks, and the person cannot produce a certificate from a physician testifying to an unqualified ability to operate a motor vehicle.

i. The named insured or any other customary operator is or has been convicted of or forfeits bail during the 36 months preceding the policy effective date or during the policy period for:

i. A felony or criminal negligence resulting in death, homicide, or assault arising out of the operation of a motor vehicle.

ii. Driving while intoxicated or under the influence of drugs. iii. Leaving the scene of an accident. iv. Making false statements to obtain a driver's license. v. A third violation (committed within a period of 36 months) for speeding. vi. For any other violation that is defined as a misdemeanor in any state motor

vehicle laws. j. An insured automobile has been altered to substantially increase risk or is being used as

an emergency vehicle or is subject to an inspection law and has not been inspected or does not qualify to pass inspection.

k. If the policy is extended to cover a person not listed on the original application, the insurer is permitted 60 days (after the request to insure an additional driver) to accept or reject the additional exposure. If the additional driver is unacceptable, the policy may be cancelled provided notice is mailed within 60 days of the request to insure the additional driver.

4. Proper grounds for nonrenewal Same as Section 2 above.

5. Unbound applications Any valid underwriting reason. It is not necessary to list the reason on the notice.

6. Exclusions Exclusions are permitted.


a. Notice of the cancellation must be mailed to the named insured not less than 20 days prior to the effective date of cancellation.

b. Notice of nonrenewal must be mailed to the named insured not less than 30 days prior to the effective date of nonrenewal.

c. Only 10 days’ notice is required for nonpayment or for cancellation within the first 60 day underwriting period. (We customarily give 21 days’ notice.)

d. Notice of Tennessee Automobile Insurance Plan availability is required except for nonpayment cancellations.

8. Right to request reason The insured has the right to request The ERIE to supply the reason for the cancellation if not listed in the notice. The insured must make a written request 15 days subsequent to the effective date of cancellation. The insured then must specify, in writing, any and all reasons.

9. Impairments See Section 3.h above.

Note: Tennessee code provides grounds for cancellation.

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Virginia 1. Policies affected

Any automobile liability policy issued to an individual or husband and wife residing in the same household and insuring vehicles of these types:

a. Private passenger vehicle not used as a public or livery conveyance nor rented to others. b. Any other four-wheel motor vehicle with a load capacity of 1,500 pounds or less if not

used in the business of the insured.

Note: Plan policies, garage policies, and policies insuring more than four autos are not covered by this law.

2. Proper grounds for cancellation within the first 60 days Any valid underwriting reason. Action based solely on age, sex, residence, race, creed, national origin, ancestry, marital status, or lawful occupation is illegal. It is also illegal to cancel or refuse to write a new policy for someone simply because another company has cancelled or nonrenewed the risk.


a. Suspension or revocation of the license of a named insured or any other operator who either resides in the same household or customarily operates an insured auto during the policy period.

b. Nonpayment of premium. c. Moved out of state.

4. Proper grounds for nonrenewal Any reason not prohibited under Section 2 above, except a nonrenewal, can be based on a change of occupation that has resulted in a material increase of the risk. Also, these factors are statutorily prohibited reasons for nonrenewal:

a. Lack of driving experience or number of years driving experience. b. Lack of supporting business or lack of potential for acquiring such business. c. One or more accidents or violations that occurred more than 48 months immediately

preceding the upcoming anniversary date. d. One or more claims submitted under the uninsured motorists coverage of the policy

where the uninsured motorist is known or there is physical evidence of contact. e. A single claim by a single insured submitted under the medical payments coverage or

medical expense coverage due to an accident for which the insured was neither wholly nor partially at-fault.

f. One or more claims submitted under the comprehensive or towing coverages; however, insurers are not prohibited from refusing to renew the comprehensive or towing coverages on the basis of one or more claims if the insurer delivers notice of change in such coverages 45 days prior to the renewal.

5. Unbound applications Same as Section 2. The notice must state the specific reason for rejection.

6. Exclusions Exclusions are not permitted.


a. The notice, sent by registered or certified mail, must indicate the specific reason for the termination.

b. On cancellations during the first 60 days, 10 days’ notice is legally required, but we give 21 days, if possible. In all other cases, except nonpayment where 30 days’


notice is required, 45 days’ notice must be given. c. The notice must advise the receiving party of the availability of insurance through the

Virginia Automobile Insurance Plan and of the right to request a review of the action by the insurance commissioner's office.

d. Proper notification required by the Fair Credit Reporting Act of 1971 must be furnished. If action is due to information contained in an MVR, a copy must be sent with the notice.

8. Impairments It is illegal to discriminate against the handicapped. Risks with serious ailments or impairments should be submitted unbound with a doctor's statement or with prior Home Office approval.

West Virginia

1. Policies affected All private passenger automobile policies. Garage policies and commercially-rated automobile policies must follow these guidelines if a policy insures a private passenger automobile.

2. Declination of an application for liability insurance is prohibited:

• Based upon race, religion, nationality, ethnic group. • Based solely upon a lawful occupation. • Based upon principal location of the insured vehicle unless the decision is for a business

purpose that is not a mere pretext for unfair discrimination. • Based solely upon age, sex, marital status. • Based upon previous insurance with a substandard carrier. • Based upon no previous insurance. • Based upon prior insurance through a residual market. • Based upon another insurer previously declining to insure the applicant or terminating an

existing policy in which the applicant was the named insured. • Based solely upon a credit report or adverse credit scoring.

3. Proper grounds for cancellation during the first 60 days Any valid underwriting reason. It is improper to refuse to write or cancel a policy solely because another carrier has done so.


a. Nonpayment of premium. b. Material misrepresentation with a determination that the insured has withheld or

concealed a material fact that would have altered the acceptability of the risk had it been disclosed on the application.

c. If the insured violated any of the material terms or conditions of the policy. d. If the named insured or any other operator who either resides in the same household or

customarily operates the insured's vehicle:

i. Has had his or her operator's license suspended or revoked during the policy period.

Note: If the license is not currently suspended, this refers to the act of suspension rather than the period of suspension. Insurers are prohibited from canceling when a license is suspended for 60 days for a driver under age 21 with a BAC over .02 percent but less than .08%.

ii. Is or becomes subject to epilepsy or heart attacks and cannot produce a medical statement documenting that the impairment will not impair the ability to safely operate motor vehicles.

12/26/2018 DSD393 49

iii. Is convicted of or forfeits bail during the policy period for any of the following:

i. Any felony or assault involving the use of a motor vehicle. ii. Negligent homicide arising out of the operations of a motor vehicle. iii. Operating a motor vehicle while under the influence of alcohol/drugs;

however, insurers are prohibited from cancelling because a driver under age 21 was operating a vehicle with a BAC over .02% but less than .08%.

iv. Leaving the scene of an accident in which the insured is involved without reporting it as required by law.

v. Theft or unlawful taking of a motor vehicle. vi. Making false statements in an application for a driver's license. vii. Three moving violations within 12 months, each of which results in 3 or

more points, whether or not the insurer renewed the policy without knowledge of all such violations. Cancellation shall be mailed to the insured either during the current policy period or during the first full policy period following the date that the third moving violation is recorded by the DMV.

Note: The law allows an owner to specifically exclude from coverage a person whose violation of the law will cause his or her policy to be cancelled. Therefore, it may be better to nonrenew in such cases as the nonrenewal laws do not require an exclusion offer.

5. Proper grounds for nonrenewal

a. Any valid underwriting reason prior to the second renewal. b. Reasons listed in Section 4, or if the named insured or any other operator has had 2 at-

fault accidents within 36 months, which results in a claim being paid by the insurer, or 2 or more moving traffic violations within 24 months, each of which resulted in 3 or more points, whether or not the insurer has renewed the policy without the knowledge of all such violations. Notice of nonrenewal shall be mailed during the current policy period or during the first full policy period following the date of the second accident or the date that the second moving violation is recorded by the DMV.

c. The named insured or any other operator, either residing in the same household or who customarily operates an automobile insured under the policy is or becomes subject to a physical or mental condition that prevents the insured from operating a motor vehicle, and the individual cannot produce a certificate from a physician testifying to his or her ability to operate a motor vehicle.

6. Transfer between companies The transfer of an insured between companies within the same group is not considered a cancellation or nonrenewal. The transfer must be based on any valid underwriting reason involving a substantially increased risk associated with the policy.

7. Unbound applications Action can be based on any valid underwriting reason not prohibited by Section 2. The reason does not have to be listed on the notice.

8. Exclusions The law requires the insurer to offer the named insured the option to exclude from coverage, a person (other than a spouse) whose driving record will cause the named insured's policy to be nonrenewed. Although exclusions are permitted, “excluded” drivers are still covered up to the minimum mandatory limits required by the state for exclusions effective prior to January 1st 2016. Exclusions signed and dated after January 1st 2016 no coverage will be afforded. We prefer to avoid exclusions for new business applications.


a. On cancellations within the first 60 days, 30 days’ notice must be given (the notice can


be sent on the 59th day). On mid-term cancellations, 30 days’ notice must be given. On nonrenewals, 45 days’ notice is required. The reason for the underwriting action must be listed on the nonrenewals and mid-term cancellations, but not on cancellations within the first 60 days.

b. If the reason for termination is not listed on the notice, the insurer must enumerate the Policyholder's right to demand the reason.

c. The right to demand a hearing must be sent forth. d. Proper notification required by the Federal Fair Credit Reporting Act of 1971 must be

furnished. 10. Impairments

Discrimination against impaired or physically handicapped drivers is not permitted with respect to charging a higher rate. Agents should submit such risks on an unbound basis along with a Physician's Statement. Also see Section ii.

Wisconsin

1. Policies affected All except motorcycles, assigned risk, fleet, garage, excess and premises, public/livery conveyance, four-wheel vehicles greater than 9,000 lbs. GVW.

2. Proper grounds for cancellation within the first 60 days Any valid underwriting reason. Cannot cancel or refuse to write wholly or partly because of age, sex, residence, race, creed, color, religion, national origin, ancestry, marital status, or occupation.


a. Nonpayment of premium. b. Material misrepresentation. c. Substantial change in the risk assumed, except to the extent that the insurer should

reasonably have foreseen the change or contemplated the risk in writing the contact. d. Substantial breaches of contractual duties, conditions, or warranties.

4. Proper grounds for nonrenewal Same as Sections 2 and 3.

5. Conditional renewal If the insurer offers to renew but on less favorable terms or at higher premiums, the new terms or premiums take effect on the renewal date if notice is sent to the insured at least 60 days prior to renewal date.

Exception: Premium increases by less than 25%. 6. Exclusions

No policy may exclude from coverage afforded or benefits provided.

a. Persons related by blood or marriage to the insured. b. Any person who is named insured or passenger in or on the insured vehicle, with respect

to Bodily Injury, sickness, or disease, including death resulting therefrom. An insurer can exclude motorcycle passengers if the motorcycle or moped is designed to carry only one person and does not have a passenger seat. Cannot exclude coverage for any use of a motor vehicle for unlawful purposes, or for transportation of liquor or in violation of law, or while the driver is under the influence of an intoxicant or controlled substance to a degree which renders him or her incapable of safely driving, or any use of a motor vehicle in a reckless manner.


a. First 60 days—10 days’ notice via first-class mailing. Reason for cancellation need not be

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in the notice. b. Mid-term—10 days’ notice via first-class mailing but 60 days’ notice if an anniversary date

cancellation. Reason must be included in notice. c. Nonrenewal—60 days’ notice via first-class mailing.* d. Conditional renewal—60 days’ notice via first-class mailing.*

Note: Nonrenewal and conditional renewal notices must contain instructions to the insured for applying for insurance through a risk-sharing plan. The notice must explain the insured's right to file a complaint with the insurance commissioner (although there are no provisions for hearings). Written reason of termination must be included in the notice.

8. Additional nonrenewal requirements The insurer cannot agency-expire unless they offer to continue or renew the policy. Otherwise, no restrictions are placed on reasons to nonrenew.

9. Special provision Denying, canceling, or nonrenewing auto insurance of a person convicted of an offense if the offense that resulted in the conviction is directly related to the risk to be insured is permissible.

State cancellation laws for homeowners This section contains the cancellation laws that should be followed in each state when cancelling Homeowners policies.


Questions If you have any questions or doubts about how a specific state law operates, please contact your underwriter or the Law Division at the Home Office.


1. Grounds for cancellation—policy in force less than 30 days Any valid underwriting reason.

2. Grounds for cancellation—policy in force 30 days or longer

a. Nonpayment of premium. b. Material and willful misstatement or omission of fact in obtaining policy or presenting a

claim. c. Property or other interest has been transferred to another person. d. The property, interest or use shall have materially changed with respect to its insurability.

3. Grounds for nonrenewal Any valid underwriting reason.

4. Notice requirements

a. 30 days’ notice for cancellations and nonrenewals, with the notice being sent to the Agent at least 5 days before being sent to the insured.

b. Must state the specific reason along with:

◦ If the termination is based on claims or losses. ◦ The date of the claim or loss. ◦ Amount paid. ◦ Type of insurance applicable. ◦ Name of insurer of the claim or loss.


◦ A brief statement of the circumstances that caused the claim or loss. c. Must advise the insured of his or her right to appeal to the Insurance Department. d. Must advise the insured of the availability of coverage through the FAIR Plan.

5. Other restrictions

a. Actions based in whole or in part on age, color, creed, religion, sex, national origin, place of residency, geographic area, mental or physical impairment, or any other arbitrary reason is not permitted.

b. May not nonrenew based on claim frequency unless there have been two or more claims in the preceding three year period. These claims are excluded from consideration:

◦ The first claim for a weather related loss unless we can prove that the insured unreasonably failed to maintain the property and this contributed to the loss;

◦ An inquiry that did not result in a claim payment; ◦ A loss for which there was no investigation or other claim activity; or ◦ A loss caused by a catastrophic event.

Illinois

1. Grounds for cancellation—policy in effect less than 60 days Any valid underwriting reason.


a. Nonpayment of premium. b. Material misrepresentation or fraud. c. Act measurably increasing the risk originally accepted. d. Insured failed to make necessary repairs to damaged property, and:

1) the property is capable of being rehabilitated; 2) "we" sent a notice of need for repair; and 3) "we" allowed a reasonable period of time (not to exceed 90 days) in which to

repair defects. The notice of need for repair may be sent at any time during the policy period.

3. Grounds for nonrenewal Any valid underwriting reason within 5 years of inception of policy. After 5 years of inception of policy:

• Material misrepresentation or fraud in obtaining the policy. • Risk originally accepted has measurably increased, and: 1) the property is capable of being rehabilitated; 2) "we" sent a notice of need for repair; and

3) "we" allowed a reasonable period of time (not to exceed 90 days) in which to repair defects; or

• Insured has received 60 days’ notice of the intention of the company not to renew. 4. Notice requirements

a. Policies in force less than 5 years - 30 days’ notice for cancellations and nonrenewals with a copy sent to the Agent.

b. Policies in force more than 5 years - 60 days’ notice for cancellations and nonrenewals with a copy sent to the Agent.

c. Must include specific reason. 5. Other restrictions

a. May not cancel, refuse to write or refuse to renew due to other carrier's refusal to write

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or termination of a policy. b. May not refuse to issue or renew a homeowners insurance policy to the owner or tenant of

any single family dwelling, or to any owner of or tenant residing in a multi-unit residential dwelling that contains from 2 to 4 units in a single building, solely on the grounds that a space heater is being used inside the dwelling. For purposes of this Section space heater means a heat radiating device used to warm rooms of a house or apartment and which is approved by Underwriters’ Laboratories and uses gas, electricity or oil as its primary source of energy.

c. Action based in whole or in part on the age or location of the property or upon age, sex, race, color, ancestry, marital status or occupation is not permitted.

d. May not cancel, refuse to write, or refuse to renew based on an individual's status as a victim of domestic abuse.

e. Recommendation letters MUST be sent from the insurance company, NOT the Agent, and the insured must be given a reasonable period of time (not to exceed 90 days) from the date of mailing to complete and satisfy all recommended repairs, to an extent reasonably sufficient to facilitate continued coverage thereon.

f. May not cancel, refuse to write, or refuse to renew solely because the insured or another person who customarily operates an automobile covered by the policy has had an accident while operating a motor vehicle in response to an emergency call to duty as a volunteer EMS provider.

Indiana

1. Grounds for cancellation within first 60 days Any valid underwriting reason.

2. Grounds for cancellation after first 60 days (mid-term)

a. Nonpayment of premium. b. Fraud or Material Misrepresentation. c. Substantial change in risk that substantially increases a hazard insured against. d. Willful or reckless acts or omissions of the named insured that increase a hazard insured

against. e. Violation of local fire, safety, health, and/or building regulations. f. A determination by the insurance commissioner that policy continuation would place

the insurer in violation of the law. g. Property taxes have been delinquent for at least two years and remain delinquent at the

time the notice is issued. 3. Grounds for nonrenewal

Any valid underwriting reason. 4. Notice requirements

a. 20 days’ notice for cancellations and nonrenewals, provided the policy has been in effect for more than 60 days. If the policy has been in effect for 60 days or less, the notice requirement is only 10 days.

b. Must state specific reason. 5. Other restrictions

Termination based on:

a. Race, religion, nationality, ethnic group, age, sex, or marital status; b. Lawful occupation of the insured; c. Age or location of the residence of the applicant or insured;


d. Another insurer's previous declination or termination; or e. Fact that applicant or named insured was previously insured through a residual market

mechanism. Kentucky

1. Declination or termination prohibited based solely upon:

a. Race, religion, nationality, ethnic group, age, sex or marital status. b. Lawful occupation. c. The age or location or location of the residence or property. d. Another insurer previously declined to insure the applicant or terminated an existing policy

in which the applicant was the named insured. e. Insurance was previously obtained insurance through a residual market. f. Insurance was previously obtained from a nonstandard company. g. The application or named insured having sustained one (1) or more losses that

immediately result from a natural cause without intervention of any person and that could not have been prevented by exercise of prudence, diligence, and care.

2. Grounds for cancellation within first 60 days Any valid underwriting reason except for reasons listed in Section 1.

3. Grounds for cancellation after first 60 days (mid-term)

a. Nonpayment of premium. b. Fraud or material misrepresentation. c. Willful or reckless acts or omissions of the named insured that increase a hazard insured

against. d. Substantial change in risk that substantially increases a hazard insured against. e. Violation of local fire, safety, health, and/or building regulations. f. The insurer is unable to reinsure the risk. g. A determination by the insurance commissioner that policy continuation would place

the insurer in violation of the law. 4. Grounds for nonrenewal

Any valid underwriting reason except for reasons listed in Section 1. 5. Notice requirements

a. 14 days’ notice (we will give 21 days’ notice) for cancellations if the policy has been in effect for 60 days or less.

b. 75 days’ notice for cancellation and nonrenewals provided that the policy has been in effect for more than 60 days.

c. 14 days’ notice is required for nonpayment of premium. d. Must state specific reason.

Maryland

1. Proper grounds for cancellation during the first 45 days Any valid underwriting reason supported by underwriting standards.


a. Material misrepresentation or fraud in connection with the application, policy, or presentation of a claim.

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b. A matter or issue related to the risk that constitutes a threat to public safety. c. A change in the condition of the risk that results in an increase in the hazard insured

against. d. Nonpayment of premium. e. Conviction of arson (homeowners insurance only).

3. Grounds for nonrenewal Any valid underwriting reason supported by written underwriting standards such as those listed below:

• Insureds who have made more than three non-weather related claims in the preceding three year period, except that a weather related claim may be considered as a basis for cancellation or nonrenewal if ERIE has provided written notice to the Insured for reasonable or customary repairs or replacements specific to the Insured's premises or dwelling which the insured failed to make and which, if made, would have prevented the loss for which the claim was made.

• Insureds who have made three or more weather related claims in the preceding three year period.

• Applicants or Insureds who have made a material misrepresentation in connection with the application for insurance, the policy, or the presentation of a claim.

• A property on which there has been a change in the physical condition or contents of the premises or dwelling, resulting in an increase in a hazard insured against and which, if present and known to ERIE prior to the issuance of a policy, ERIE would not have issued the policy.

• Conviction of arson within the preceding 5 years. • Conviction within the preceding three years of a crime that directly increases the

hazard insured against. • Named Insureds who do not cooperate in signing all papers related to the contract of

insurance and issuance of the policy. 4. Notice requirements

a. 30 days’ notice for new Homeowners, Dwelling Fire, and Ultrasure for Landlord applications cancelled within the first 45 days.

b. 45 days’ notice for cancellations and nonrenewals. c. Must state specific reason. d. Must refer to written underwriting standards.

5. Other restrictions

a. Actions cannot be based in whole or in part upon race, color, creed, religion, sex, national origin, place of residency, geographic area, or any other arbitrary, capricious, or unfair or discriminatory reason.

b. We cannot cancel, refuse to renew or otherwise terminate coverage because of a claim that occurred more than three years before the effective date of the policy or renewal.

c. Written underwriting standards must be reasonably related to our economic and business purpose.

New York 1. Grounds for cancellation—policy in force less than 60 days Any valid underwriting reason. The reason must be specific. 2. Grounds for cancellation—policy in force 60 days or longer

a. Nonpayment of premium. b. Conviction of a crime out of acts increasing the hazard insured against.


c. Fraud or material misrepresentation in obtaining the policy or in the presentation of a claim.

d. Discovery of willful or reckless acts or omissions increasing the hazard insured against. e. Physical changes in the property occurring since the last annual anniversary date, which

makes the property uninsurable according to the insurer's underwriting standards. A vacant dwelling is not a physical change in the property. We may consider the grounds for cancellation if the dwelling is no longer occupied on only the third year renewal.

3. Grounds for nonrenewal

a. Conviction of a crime out of acts increasing the hazard insured against. b. Fraud or material misrepresentation in obtaining the policy or in the presentation of a

claim. c. Discovery of willful or reckless acts or omissions increasing the hazard insured against. d. Physical changes in the property occurring since the last annual anniversary date. A

vacant dwelling is not a physical change in the property. See e below for unoccupied dwellings.

e. Each third year anniversary, a risk can be nonrenewed for any valid underwriting reason (i.e., claims frequency).

4. Notice requirements for cancellations and nonrenewals At least 45 days’ notice but not more than 60 days’ notice.

Conditional Renewal: If we have the right to cancel, we may, instead of cancelling the policy, amend the limits of liability or reduce coverage not required by law.

North Carolina

1. Policies affected All property policies in effect for at least 60 days (excludes Ultrasure for Landlord policies).

2. Proper grounds for cancellation (policies in effect less than 60 days) Any valid underwriting reason.

3. Proper grounds for cancellation (policies in effect more than 60 days)

a. Nonpayment of premium. b. Material misrepresentation. c. Substantial change in risk or increased hazard that could not have been

reasonably contemplated when risk was assumed. d. Substantial breach of contractual duties, conditions, or warranties that

materially affect insurability of risk. e. Fraudulent act affecting insurability. f. Willful failure to institute reasonable loss control measures. g. Conviction of a crime that materially affects the insurability of the risk. h. Insured fails to meet requirements in corporate charter, articles of

incorporation, or bylaws of insurer. i. Determination by Commissioner that continuation of the policy would place

the insurer in violation of state laws. 4. Proper grounds for nonrenewal

Any valid underwriting reason. 5. Notice requirements

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a. At least 30 days’ notice for cancellations (15 days for policies in effect for less than 60 days).

b. At least 45 days’ notice for nonrenewal. c. Reason for cancellation or nonrenewal shall be stated. d. Notice of cancellation or nonrenewal shall be mailed first class to insured

shown in the declarations at the last known address and to listed mortgagee. A copy of the notice shall be sent to Agent or Broker of record.

Note: Proof of mailing will be sufficient proof of notice. Ohio

1. Grounds for cancellation Any valid underwriting reason.



a. 30 days’ notice for cancellations and nonrenewals. b. Must state specific reason.

Pennsylvania

1. Grounds for cancellation—policy in effect less than 60 days Any valid underwriting reason.

2. Grounds for cancellation—policy in effect 60 days or longer

a. Nonpayment of premium. b. Material misrepresentation, fraudulent statements, omissions or concealment of fact

material to the acceptance of the risk. c. Substantial change or increase in hazard in the risk assumed by the company subsequent

to the date the policy was issued. d. Substantial increase in hazards insured against by reason of willful or negligent acts or

omissions by the insured. 3. Grounds for nonrenewal

a. Material misrepresentation, fraudulent statements, omissions or concealment of fact material to the acceptance of the risk.

b. Substantial change or increase in hazard in the risk assumed by the company subsequent to the date the policy was issued.

c. Substantial increase in hazards insured against by reason of willful or negligent acts or omissions by the insured.


a. 30 days’ notice on cancellations and nonrenewals. b. Must state specific reason. c. Must advise insured on his or her right to appeal to the Insurance Department. d. Must advise insured on availability of coverage through the FAIR Plan.

Tennessee

1. Policies affected


All property policies except Ultrasure for Landlord policies which need to follow Commercial Cancellation Laws.

2. Grounds for cancellation Any valid underwriting reason.



a. 30 days’ notice for cancellations and nonrenewals. b. Must state specific reason.

Virginia



a. Nonpayment of premium. b. Conviction of a crime increasing the probability that a peril insured against will occur. c. Fraud or material misrepresentation. d. Willful or reckless acts or omissions increasing the probability that a peril insured against

will occur as determined from a physical inspection of the premises. e. Physical changes in the property that result in the property becoming uninsurable as

determined from a physical inspection of the premises. f. Foreclosure efforts by the secured party against the subject property covered by the

policy that have resulted in the sale of the property by a trustee under a deed of trust as duly recorded in the land title records of the jurisdiction in which the property is located.

3. Grounds for nonrenewal Any valid underwriting reason except:

a. Based upon age, sex, residence, race, color, creed, national origin, ancestry, or marital status;

b. Any claim resulting primarily from natural causes; c. One or more claims that were incurred more than 60 months immediately prior to the

expiration of the current policy period; d. Lawful occupation, including the military service; however, nothing in this subsection shall

require any insurer to renew a policy for an insured where the insured's occupation has changed so as to increase materially the risk;

e. Credit information contained in a “consumer report,” as defined in the Federal Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq., bearing on a natural person's creditworthiness, credit standing, or credit capacity. If credit information is used, in part, as the basis for the nonrenewal, such credit information shall be based on a consumer report procured within 120 days from the effective date of the nonrenewal;

f. Any inquiry from an insured about his insurance coverage or policy provisions. For purposes of this subdivision, “inquiry” means a written or oral communication by an insured seeking information regarding coverage or policy provisions that does not notify the insurer of a loss, incident or accident, and that does not provide information indicating an increase in the hazard insured against. An insurer shall not report any inquiry as a claim to a loss history database maintained by a consumer reporting agency or insurance support organization.

g. An insured under the policy is a foster parent and foster children reside at the insured

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dwelling. 4. Notice requirements

a. 30 days’ notice for nonrenewals, except risks with business exposures which require 45 days’ notice. However, less than 30 days (must be at least 10 days) may be used if the reason for cancellation is any of the reasons listed in 2 above.

b. Must state specific reason. c. Must advise insured of coverage available through the Virginia Property Insurance

Association. d. Must advise insured of right to appeal to the Virginia Insurance Department.

West Virginia



a. Nonpayment of premium. b. Conviction of a crime increasing a hazard insured against. c. Fraud or material misrepresentation made by, or with the knowledge of the named insured

in obtaining the policy, continuing the policy, or in presenting a claim. d. Willful or reckless acts or omissions that increase a hazard insured against. e. Change in the risk that substantially increases a hazard insured against. f. Violation of any local fire, health, safety, building or construction regulation that

substantially increases a hazard insured against. g. Property tax delinquency of two years or more. h. Substantial breach of policy conditions. i. A determination by the commissioner that continuing the policy would place the insurer in

violation of the insurance laws. 3. Grounds for nonrenewal—policies in effect less than four years

Any valid underwriting reason. 4. Grounds for nonrenewal—policies in effect four years or longer

a. Two or more paid claims in 36 months, each occurring after July 1, 2005. *A single party property damage claim within the previous 36 months arising from wind,

hail, lightning, wildfire, snow or ice cannot be used for termination. If only two property damage claims are within the previous 12 months, both of which arose from claims solely due to an event for which a state of emergency is declared for the county in which the insured property is located, then you cannot use for termination. Further, “state of emergency” is defined as the situation existing after the occurrence of a disaster in which a state of emergency has been declared by the Governor or by the Legislature, or in which a major disaster declaration or emergency declaration has been issued by the President of the United States. *Exceptions to “a.” are the insurer has evidence the insured unreasonably failed to maintain the property and that failure contributed to the loss.

b. Conviction of a crime increasing a hazard insured against. c. Fraud or material misrepresentation made by, or with the knowledge of the named insured

in obtaining the policy, continuing the policy, or in presenting a claim. d. Willful or reckless acts or omissions that increase a hazard insured against. e. Substantial change in the risk that increases a hazard insured against. f. Violation of any local fire, health, safety, building or construction regulation that


substantially increases a hazard insured against. g. Property tax delinquency of two years or more, which continues to exist when the notice

is issued. h. Substantial breach of policy conditions. i. A determination by the commissioner that continuing the policy would place the insurer in

violation of the insurance laws. 5. Notice requirements

a. 30 days’ notice for all cancellations. b. 30 days’ notice for all non-renewals. c. Must state specific reason.

6. Other restrictions May not decline to issue or terminate a policy if the reason is based in whole or in part upon:

a. Race, religion, nationality, ethnic group, age, sex, marital status, or lawful occupation. b. Age or location of residence. c. Previous termination by another insurer. d. Previous insurance through residual market. e. Insured being previously uninsured.

Wisconsin

1. Grounds for cancellation—policy in force less than 60 days



a. Nonpayment of premium.

b. Material misrepresentation.

c. Risk has changed substantially since the policy was issued, except to the extent that the insurer should reasonably have foreseen the change.

d. Substantial breach of a contractual duty, condition or warranty.

3. Grounds for nonrenewal



a. 30 days’ notice for cancellations.

b. 60 days’ notice for nonrenewals.

c. Must include specific reason.

d. Must advise insured of availability of coverage in the Wisconsin Insurance Plan.

State cancellation laws for commercial lines of business This section contains the cancellation and nonrenewal laws that should be followed in each state when canceling and nonrenewing commercial lines policies.


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Questions If you have any questions or doubts about how a specific state law operates, please contact your underwriter.

Notice Requirements for Workers' Compensation

Information online The information that follows was obtained from Property Casualty Insurers Association of America (PCI) web site, PCIAA.net.

Note: You must be a registered member of PCI to use the electronic service.

Updates Any changes to these laws and regulations will be included in future updates to this manual.

Note: Only the states in which we write Workers' Compensation are included.

State laws The following table describes the notice requirements for each state in which ERIE sells or intends to sell Workers' Compensation insurance.

http://www.pciaa.net/


Table A.1 – Cancellation/Nonrenewal Notice Requirements for Workers' Compensation Policies

State Cancellation Nonrenewal Citation District of Columbia

Advance Notice: 30 days; notice must be sent to employer and Mayor. Method of Notice: not specified Cancellation Grounds: not specified

Advance Notice: not specified Method of Notice: not specified Nonrenewal Grounds: not specified

DC ST s 32-1513, DC ST s 32-1538

Illinois Advance Notice: 10 days for nonpayment of premium; 30 days during 60-day underwriting period; 60 days after 60-day underwriting period. Sent to named insured, mortgage or lienholder, and the Industrial Commission Method of Notice: mailing; mortgage or lienholder may accept electronic notice; electronic notice Cancellation Grounds: (1) nonpayment of premium, (2) material misrepresentation on the application, (3) if any insured violates any of the terms and conditions of the policy, (4) measurable increase in the risk, (5) if the insurer certifies to the Director that it has lost all or part of its reinsurance on the risk, (6) if the Director determines that continuation of the policy would place the insurer in violation of Illinois laws.

Advance Notice: 60 days to employer, employer's Agent or broker of record, the Insurance Department, and the Bureau Method of Notice: Mail or Electronic Nonrenewal Grounds: not specified

215 IL CS 5/143.14, 215 IL CS 5/143.15, 215 IL CS 5/143.16, 215 IL CS 5/143.17a, 820 IL CS 305/4, 50 IL ADC 940.30, 50 IL ADC 2904.140 IL ST CH 215 5/143.34 & SB 1680

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Indiana Advance Notice: 10 days’ notice for nonpayment of premium; 20 days’ notice for fraud or material misrepresentation; 30 days if policy has been in effect for 90 days or less and for a reason other than nonpayment of premium or fraud or material misrepresentation; 45 days’ notice for substantial change in the scale of the risk covered by the policy; failure to comply with reasonable safety recommendations; and cancellation for reinsurance of the risk associated with the policy has been canceled. Notice sent to insured and notify the State Workers Compensation Board 10 days before cancellation. Method of Notice: written notice or electronic notice, if insured consents Proof of mailing may include USPS intelligent mail bar code tracking record, certificate of mailing, or first-class mail Cancellation Grounds: nonpayment of premium; substantial change in the scale of risk covered by the policy; fraud or material misrepresentation committed by the insured, upon the insurer; failure to comply with reasonable safety recommendations; reinsurance of the risk associated with the policy has been cancelled.

Advance Notice: For nonrenewal of policies providing coverage for one year or less: 45 days’ notice prior to the expiration date; For nonrenewal of policies providing coverage for more than one year: 45 days’ notice prior to anniversary date. Method of Notice: written notice or electronic notice, if insured consents Nonrenewal Grounds: not specified

22-3-5-5,

22-3-7-34(f)(4), IN ST 22-3-7-34, IN ST 27-1-31-1, IN ST 27-1-31-2, IN ST 27-1-31-2.5, IN ST 27-1-31-3, IN ST 27-1-43-3 IN ST s 27-1-3-34 IN HB 1318


Kentucky

Advance Notice: 14 days during 60-day underwriting period; 14 days for nonpayment of premium and 75 days for all other reasons, after 60-day underwriting period; Notice sent to insured; reason for cancellation required on the notice Method of Notice: personal delivery or proof of mailing; electronic delivery Cancellation Grounds: After 60-day underwriting period: (1) nonpayment of premium, (2) fraud or material misrepresentation in obtaining the policy, in pursuing a claim, or in continuing the policy, (3) willful or reckless acts that increase any hazard insured against, (4) a violation of any local fire, health, or safety code that substantially increases any hazard insured against, (5) if the insurer is unable to obtain reinsurance on the risk, (6) if the Insurance Commissioner determines that the continuation of the policy would place the insurer in violation of the Kentucky insurance laws, (7) the occurrence of a change in the risk which substantially increases any hazard insured against after insurance coverage has been issued or renewed.

Advance Notice: 75 days before end of policy period; notice sent to named insured; reason for nonrenewal required on/with the notice. Method of Notice: personal delivery or proof of mailing; electronic delivery Non-Renewal Grounds: not specified

KY ST s 304.20-310, KY ST s 304.20-320, KY ST s 304.20-330, KY Advisory Opinion 2013-1

Maryland Advance Notice: 10 days for nonpayment of premium; 45 days for other reasons. Reason for cancellation. Notice sent to insured and the Maryland Workers’ Compensation Commission Method of Notice: personal service or certified mail; nonpayment requires certificate of mail Cancellation Grounds: nonpayment of premium; other reasons not specified

Advance Notice: Reason for cancellation. 45 days; Notice sent to insured and the Maryland Workers’ Compensation Commission Method of notice: First-class mail tracking method which includes a certificate of mail or an electronic mail tracking system used by the USPS; nonpayment requires certificate of mail Nonrenewal Grounds: not specified

MD INSURANCE s 19-406, MD ADC 14.09.01.05, MD ADC 31.08.15.06

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New York Advance Notice: 30 days or 10 days for nonpayment of premium to insured and insured and Office of the Chair Method of Notice: personal delivery, certified or registered letter, return receipt requested Cancellation Grounds: All legal reasons, including nonpayment of premium and assessments.

Advance Notice: 30 days to insured and Office of the Chair Method of Notice: personal delivery, certified or registered letter, return receipt requested Nonrenewal Grounds: not specified

NY WORK COMP s 54


North Carolina

Advance Notice: 30 days during first 60 days of policy, 15 days thereafter with limited basis for cancellation. Sent to insured and any other person designated in policy, as well as Agent or broker of record. Reason for cancellation Method of Notice: first-class mail, registered or certified mail, return receipt requested; electronic notice; any method permitted for service of process under Rule 4 of the NC Rules of Civil Procedure. Cancellation Grounds: After 60-day underwriting period: 1) nonpayment of premium in accordance with the policy terms; (2) an act or omission by the insured or the insured's representative that constitutes material misrepresentation or nondisclosure of a material fact in obtaining the policy, continuing the policy, or presenting a claim under the policy, (3) Increased hazard or material change in the risk assumed that could not have been reasonably contemplated by the parties at the time of assumption of the risk, (4) Substantial breach of contractual duties, conditions, or warranties that materially affects the insurability of the risk, (5) A fraudulent act against the company by the insured or the insured's representative that materially affects the insurability of the risk, (6) willful failure by the insured or the insured's representative to institute reasonable loss control measures that materially affect the insurability of the risk after written notice by the insurer, (7) loss of facultative reinsurance or loss of or substantial changes in applicable reinsurance as provided in Section 58-41-30, (8) conviction of the insured of a crime arising out of acts that materially affect the insurability of the risk, (9) a determination by the Commissioner that the continuation of the policy would place the insurer in violation of the laws of this State, (10) the named insured fails to meet the requirements contained in the corporate charter, articles of incorporation, or bylaws of the insurer, when the insurer is a company organized for the sole purpose of providing members of an organization with insurance coverage in this State.

Advance Notice: 45 days prior to policy expiration date if policy written for term of one year or less, 45 days prior to anniversary date of policy if written for a term of more than one year or for an indefinite term at the policy anniversary date Reason for cancellation Method of Notice: first-class mail Nonrenewal Grounds: not specified

NC ST s 58-36-105, NC ST s 58-36-110

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Pennsylvania Advance notice: not specified Method of Notice: forwarded by registered or first-class mail or delivered by the insurer Cancellation Grounds: nonpayment of premium only

Advance Notice: 60 day notice required Method of Notice: forwarded by registered or first-class mail or delivered by the insurer. Nonrenewal Grounds: not specified, but generally for any nondiscriminatory reason. Reason for Nonrenewal is required on the notice labeled "Notice of Nonrenewal”. Reasons should identify the condition, factor or loss experience that caused the nonrenewal (sufficient information for the insured to correct the deficiency); regulations require that reasons be clear and complete so that a person of average intelligence and education can understand it; unacceptable nonrenewal reasons include for "losses" or for "underwriting reasons."

PA ST Ti. 40 s 813, 40 P.S. Ti. 40 s 3403, 40 P.S. Ti. 40 s 3407, 31 PA ADC s 113.81, 31 PA ADC s 113.82, 31 PA ADC s 113.86, 31 PA ADC s 113.88


Tennessee Advance Notice: 10 day notice required and must be for grounds after 60 day underwriting period. Notice sent to named insured; immediately file Form I-2 with Director Method of Notice: personal delivery or mailing Cancellation Grounds: After the 60-day underwriting period: (1) nonpayment of premium, (2) if the insured is convicted of a crime that involves an act increasing a hazard insured against, (3) fraud or material misrepresentation on the application or in the pursuit of a claim, (4) if the named insured does not comply with loss control requests of the insurer, (5) a material change in the risk that substantially and materially increases the hazard, (6) if the Commissioner determines that for the insurer to continue its present volume of premiums would jeopardize its solvency or would violate the state’s insurance code, (7) if the named insured violates any policy condition, (8) other reasons approved by the Commissioner.

Advance Notice: 60 day notice required to be sent to insured and Agent. Method of Notice: personal delivery or mailing Nonrenewal Grounds: not specified

TN ST s 56-7-1803, TN ST s 56-7-1804, TN ST s 56-7-1805, TN ADC 0800-2-1-.05

Virginia Advance Notice: 30 days; 10 days nonpayment of premium. Notice sent to insured and Virginia Workers’ Compensation Commission (or the latter’s designated Agent) Method of Notice: not specified Cancellation Grounds: all legal reasons, including nonpayment of premium.

Advance Notice: 30 day notice to insured and the Virginia Workers’ Compensation Commission Method of Notice: not specified Nonrenewal Grounds: not specified

VA ST s 65.2-804

West Virginia Advance Notice: 10 days for nonpayment of premium; 30 days for all other reasons. Notice to policyholder or Agent and Insurance Commissioner’s designated rating organization by mail. Method of Notice: mail; insurer must retain proof or certificate of mailing for all termination notices sent. Cancellation Grounds: all legal reasons, including nonpayment of premium, which includes the policyholder’s refusal to permit a premium audit by the carrier or pay any surcharge or assessment required by law.

Advance Notice: 60 days’ notice to policyholder or Agent Method of Notice: mail; insurer must retain proof or certificate of mailing for all termination notices sent. Nonrenewal Grounds: not specified

WV ST s 23-2C-15, WV ADC 85-8-9

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Laws and Regulations for Commercial Automobile Policies This section contains the cancellation/nonrenewal laws and regulations for commercial automobile policies.

Information online The information that follows was obtained from the Property Casualty Insurers Association of America (PCI) web site, PCIAA.net.

1. The Pennsylvania Department of Insurance indicates that Act 86 Cancellation provisions do not apply to workers' compensation; therefore, policy filings apparently control.

2. Tennessee, § 56-7-1801 does not apply, per Workers' Compensation Division. Supreme Court case indicates that cancellation date is later of date of proposed cancellation or receipt and stamping by the Division. Notice to employer as per policy language. Note: You must be a registered member of PCI to use the electronic service.


Note: Only the states in which we do business are included.

State laws The following table describes the state laws and regulations for cancelling and/or nonrenewing Commercial Automobile policies.

Wisconsin Advance Notice: 30 day notice to the insured and the department; in lieu of the department, notice may be given to the Wisconsin Compensation Rating Bureau. Reason required to be listed. Method of Notice: personal service, first-class mail, certified mail, facsimile, or electronic mail Cancellation Grounds: (1) nonpayment of premium, (2) material misrepresentation on the application, (3) substantial change in the risk assumed if such change should not have been foreseen by the insurer or contemplated in the rate, (4) substantial breach of contractual duties or conditions

Advance Notice: 60 days before policy’s expiration date; not more than 75 days nor less than 30 days before due date of premium, if nonrenewal is for nonpayment of premium. Notice to insured and the Department of Industry, Labor and Human Relations. Reason required to be listed. Method of Notice: personal service or mailing, first-class mail, certified mail, facsimile, or electronic mail. Nonrenewal Grounds: (1) termination of an insurance marketing intermediary’s contract with the insurer, (2) failure to timely pay a renewal premium.

WI ST 102.31, WI ADC s INS 21.01


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Table A.2 – Cancellation/Nonrenewal Laws and Regulations for Automobile Policies

STATE Exceptions Grounds For Cancellation/Nonrenewal

Advance Notice Period of Cancellation To Insured

Advance Notice Period of Nonrenewal to insured

Provision for Hearing

District Of Columbia DC ST s 31-2409 DC CODE s 31-651.01 26-ADC ADC s 301

Same as Personal Auto

Same as Personal Auto: (1) For refusal or failure of the insured to pay a premium due under the terms of the policy of motor vehicle insurance; (2) where the motor vehicle registration certificate of the insured has been suspended or revoked during the period of the policy of motor vehicle insurance; or (3) where the license of an insured has been suspended or revoked during the period of a policy of motor vehicle insurance, the insurance shall not provide coverage for such insured during the period of suspension or revocation. Nonrenewal: any reason

Same as Personal Auto: 15 days for nonpayment of premium; 30 days for all other reasons; 5 days before notice to insured insurers shall notify insurance Agent or broker

Same as Personal Auto: 15 days for nonpayment of premium; 30 days for all other reasons


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Illinois IL ST CH 215 s 5/143.16 50 IL ADC 940.30


Same as Personal Auto: (1) Nonpayment of premium; (2) material misrepresentation; (3) insured's violation of policy's terms and conditions; (4) the risk originally accepted has measurably increased; (5) loss of reinsurance only if the insurer has: (a) filed certification of the loss and all other documents per the requirements of 50 IL ADC 940.30; and (b) received notification of the director's acceptance of the filed items; (6) determination by the director that continuation of the policy could place insurer in violation of law.

10 days for nonpayment of premium; 30 days for all other reasons if coverage in effect for 60 days or less; 60 days for all other reasons if coverage in effect over 60 days

60 days Same as Personal Auto

Indiana Law-IN ST 27-1-31-1 through IN ST 27-1-31-1

No provision Nonpayment, failure to comply with safety recommendations. Change in risk, fraud or material misrepresentation, reinsurance of the risk associated with the policy has been cancelled. nonrenewal: no provision

For policies in effect more than 90 days- 20 days for fraud and material misrepresentation, 10 days nonpay of premium, 45 days for all other reasons For policies in effect less than 90 days, 20 days for fraud and material misrepresentation, 10 days for nonpay of premium, 30 days for all other reasons

45 days before expiration date if coverage is for one year or less; at least 45 days before anniversary date of the policy if coverage is for more than one year

No

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Kentucky KY ST s 304.20-320 KY ST s 304.20-330

(1) Nonpayment of premium; (2) fraud or material misrepresentation made with knowledge of insured in securing policy or in a claim; (3) willful or reckless acts or omissions which increase hazard; (4) change in risk, which substantially increases hazard; (5) violation of local fire, health, safety, building or construction regulation or ordinance which substantially increases hazard; (6) insurer is unable to reinsure the risk covered; (7) commissioner determines continuation would violate law; (8) there is specific information available for review by the commissioner that the insured has contributed to the loss by arson or fraud. Nonrenewal grounds: no provision. Include Grounds: Yes (KY ST s 304.20-320); Yes, except where the insured has contributed to a loss by arson or fraud (806 KY ADC 20:010).

14 days for nonpayment of premium; 75 days for all other reasons

75 days

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Maryland Law- MD Insurance -s-27-601, Md Insurance -s 27-603

No Provision Insurer may not cancel policy midterm except material misrepresentation or fraud; threat to public safety; increase in hazard insured against- nonpay of premium; revocation or suspension of driver's license or motor vehicle registration of named insured or covered driver under the policy; and for reasons related to the driving record of the named insured or covered driver. nonrenewal: standards which are reasonably related to the insurer’s economic and business purposes

45 days – 10 days nonpay of premium- Reason for cancellation stated in notice

45 days – reason for nonrenewal stated in notice

No provision





New York Law- NY INS s 3426

Policy in effect less than 60 days

Nonpay of premium; convicted of a crime which increases the hazard insured against; fraud or material misrepresentation; violation of policy condition, or an act or omission materially increasing the hazard insured against; material physical change in the insured property; continuation of premium volume would jeopardize solvency, as determined by the superintendent; continuation of the policy would violate state law; suspension or revocation during the required policy period of the driver's license of any person who continues to operate a motor vehicle insured under the policy, other than a suspension issued pursuant to subdivision 1 of 510-b of the vehicle and traffic law or one or more administrative suspensions arising from the same incident which has been terminated prior to the effective date of cancellation. Probable risk insured will destroy or permit to be destroyed, insured property. nonrenewal: no provision

20 days during first 60 days of new policy, except for listed reason; 15 days for policy in effect for 60 days. Reason for cancellation stated in notice. Notice to broker.

No more than 120 days; no less than 60 days. Reason for nonrenewal stated in notice. Notice to broker.

No provision

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North Carolina Law—NC ST s 58-41-15, NC ST s 58-41-20, NC ST 58-37-50

No Provision For policies that cannot be ceded to the NC Reinsurance Facility---Nonpay of premium; material misrepresentation; material and unforeseen increase in hazard; substantial breach of contractual duties; fraud; willful failure to institute reasonable loss control measures; loss of facultative reinsurance; conviction of insured of a crime materially affecting insurability; policy continuation would place insurer in violation of state law. For policies that can be ceded to the NC reinsurance Facility--- Insured becomes nonresident of NC and is not otherwise eligible for coverage through the Reinsurance Facility; Agent's contract with insured is terminated for reasons other than the quality of Agent's insureds; policy is canceled pursuant to power of attorney. Insured fails to meet requirements contained in the corporate charter, articles of incorporations or bylaws; loss of or substantial reduction in reinsurance. nonrenewal: loss or substantial reduction in

15 days. Reason stated in notice

45 days. Reason stated I notice

No Provision

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Ohio Law—OH ST s3937.25, OH ST s 3937.26


Nonpay of premium; fraud or misrepresentation; willful or reckless acts or omissions on the part of the named insured against; unforeseeable increase in hazard; policy continuation would be hazardous to policyholders or the public, as determined by the Director of Insurance; Loss of reinsurance; failure to correct material violations of safety codes or to comply with reasonable written loss control recommendations.

30 days (10 days for nonpay of premium). Reason for cancellation stated in notice. Notice to Agent also

30 days. Reason for nonrenewal stated in notice. Notice to Agent also

No Provision

Pennsylvania Law—PA ST Ti.40 P.S. s 3402, PA ST Ti.40 P.S. s 3403, PA ST Ti.40 P.S. s3407


Substantial change in material condition;, factor, or loss experience; loss of or substantial decrease in reinsurance; material misrepresentation; policy obtained through fraud; nonpay of premium; insured's request; material failure to comply with policy terms, conditions, or duties; other reasons approved by the commissioner.

60 days (15 days for nonpay or material misrepresentation) Reason for cancellation stated in notice

60 days. Reason for nonrenewal stated in notice.

No





Tennessee Law—TN ST s 56-7-1801 through TN ST s 56-7-1805


Nonpay of premium; conviction of named insured of a crime which affects hazard insured against; fraud or material misrepresentation; failure to comply with loss control; change in risk which increases hazard; determination that continuation would jeopardize solvency or place insurer in violation of insurance laws; violation of policy terms or conditions; commissioner's approval.

10 days if policy has been in effect less than 60 days and is not a renewal or if cancellation is due to any of enumerated reasons. Reason of cancellation stated in notice

60 days No provision

Virginia Law—VA ST s 38.2-231, VA ST s 38.2-2208, VA ST s 38.2.2212

No Provision No Provision 45 days (15 days for nonpayment of premium) Reason for cancellation stated in notice

45 days (15 days for nonpayment of premium) Reason for nonrenewal stated in notice

Yes

West Virginia Same as Personal Auto

Same as Personal Auto: No provision








Wisconsin WI ST s 631.36


Same as Personal Auto: (1) Material misrepresentation; (2) substantial change in the risk assumed, except to the extent that the insurer should reasonably have foreseen the change or contemplated the risk in writing the contract; (3) substantial breaches of contractual duties, conditions or warranties; or (4) attainment of the age specified as the terminal age for coverage, in which case the insurer may cancel by notice under par. (b) accompanied by a tender of a proportional return of premium. nonrenewal: (1) Any valid underwriting reason; (2) agency agreement termination; (3) accident during scope of employment.

Same as Personal Auto: 10 days

Same as Personal Auto: 60 days


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Laws and Regulations for Commercial Lines of Insurance Other Than Auto or Workers' Compensation This section contains the cancellation and nonrenewal laws and regulations for commercial lines of insurance other than auto and workers' compensation.

Information online The information that follows was obtained from the Property Casualty Insurers Association of America (PCI) web site, PCIAA.net.

Note: You must be a registered member of PCI to use the electronic service.


Note: Only the states in which we do business are included.

State laws The following table describes the state laws and regulations for Commercial lines of insurance other than Auto or Workers' Compensation.


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Table A.3 – Cancellation/Nonrenewal Laws and Regulations Affecting Lines of Insurance Other Than Auto or Workers' Compensation

State Lines and/or

Risks Affected

Exceptions

Grounds for Cancellation/Nonrenewal

Notice Period

Notice Requirements

Citation


All, other than Surplus Lines

No restriction to cancellation during first 30 days

Nonpayment; material or willful misstatement; unauthorized property transfer Nonrenewal: any

30 days for both cancel & non renewal. NR accompanied by reasons.

Copy of notice also sent to superintendent except for non-pay. 5 days’ notice to Agent. Mailed or delivered in a manner reasonably designed to assure delivery to the last known address of the insured. The envelope containing the notice shall be labeled "Important Insurance Notice" in at least 18 point or larger type. Notice shall advise the insured of his or her possible eligibility for insurance under the District of Columbia Insurance Placement Act, the District of Columbia Automobile Insurance Plan, or other similar plans. It should also include where and how to inquire as to eligibility under these plans as well as all appeal rights and appeal procedures. Method of notice should either be mailed or

26-A DC ADC s 300, 26-A DC ADC s 301, 26-A DC ADC s 306 ADC s 31-651.02.

Illinois Exempted - Life, accident & health, fidelity and surety, ocean marine, reinsurance, residential fire, surplus lines

30 days during first 60 days of coverage without restriction

Nonpayment, material misrep, contractual term violations, risk has measurably increased, loss of reinsurance, continuation of policy would place insurer in violation of state law. No statutory grounds; see insurance policy.

30 days during first 60 days. 60 days thereafter, 10 days for nonpayment. 30 days for commercial excess or umbrella. Must include reason.

Copy of notice sent to broker/Agent of record. Mailed to named insured and mortgage or lienholder at the last mailing address known. Company shall maintain proof of mailing of such notice on a recognized U.S. Post Office form. Mortgage or lienholder, insured's broker/Agent of record may opt to accept notification electronically.

215 ILCS 5/143.11 through 215 ILCS 5/143.17a, 215 ILCS 5/445

.

State

Lines and/or Risks Affected

Exceptions


Notice Period

Notice Requirements

Citation

Indiana

Exempted - Private passenger auto, medical malpractice, property/liability insurance by a creditor

No restrictions upon cancellation within 90 day period, but must provide 10 day for nonpayment, 20 day for fraud or misrep, 30 days for any other reason. Exemption for non-renewal notice if insured is transferred from an insurer to an affiliate of the insurer as the result of a merger, acquisition, or restructuring, if the coverage is the same or broader & is approved by the insured.

Nonpayment, failure to comply with safety recs, change in risk, fraud or material misrep, reinsurance cancelled

Cancellation: 20 days for fraud and material misrep, 10 days for nonpayment, 45 days for all other reasons. Non-renewal: 45 days if one year or less, at least 45 days before the anniversary date of the policy if coverage is for more than one year.

U.S. mail or electronically, at election of policyholder or producer

IN sT 27-1-

31-1

through IN

sT 27-1-31-

3, IN sT 27-

1-22-4, IN

Bulletin 152

IN ST s 27-

7-6, IN ST s

27-1-43-3,

IN ST s 27-

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State

Lines and/or Risks

Affected

Exceptions


Notice Period

Notice Requirements

Citation

Kentucky

Exempted: Private passenger automobile liability; residual market; surplus lines

No restriction upon cancellation for first 60 days, however cannot cancel solely based on race, religion, nationality, previous non-standard coverage; one or more losses from natural causes; lawful occupation of insured; previous declination or termination by another insurer.

Nonpayment, fraud or misrep, willful or reckless acts or omissions which increase hazard, increase in hazard; violation of fire, health, safety, building, or construction regulation; lack of reinsurance; continuation would cause insurer to violate insurance code or regulations, insured has contributed to a loss by arson. Nonrenewal - no statutory grounds

Cancellation = 14 days for nonpayment or if within 60 days of policy issuance; 75 days if more than 60 days has elapsed. Reason to accompany. Non-renewal = 75 days before end of policy. Reason to accompany

Proof of mailing to the named insured at the address shown on policy or electronic delivery

KY ST s 304.20-300 through KY ST s 304.20-340 806 KY ADC 20:010, KY ST s 446.030, KY Advisory Opinion 2013-1

State

Lines and/or Risks

Affected

Exceptions


Notice Period

Notice Requirements

Citation

Maryland

Policies issued by Maryland Automobile Insurance Fund; policies issued by Joint Insurance Association; workers compensation; title insurance; policies issued to exempt policyholders under section 11-206 if the policies provide for written notice of not less than 30 days; surplus lines.

No restrictions on cancellation for 45 days. No provision for Non-renewal.

(1) Material misrepresentation or fraud in relation to the application, policy, or a claim; (2) due to a matter or issue related to the risk that poses a threat to public safety; (3) due to a change in the condition of the risk that results in an increase in the hazard insured against; (4) nonpayment of premium Nonrenewal: Standards that are reasonably related to the insurer’s economic and business purposes

Cancellation = 10 days for nonpayment of premium; 45 days for other cancellation grounds. Reason to accompany unless cancellation based on nonpayment. Cancellation not allowed midterm except for stated reasons. Non renew = 45 days. Reason to accompany

First-class tracking mail-method or commercial mail delivery service or electronic delivery. The insurer shall maintain proof of mailing in a form authorized or accepted by the United States Postal Service or other commercial mail delivery service

MD INSURANCE s 27-601, MD INSURANCE s 27-603, MD INSURANCE 27-605, MD INSURANCE 27-608, MD INSURANCE s 3-308 MD INSURANCE s 27-501, MD Bulletin 2016-12

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State

Lines and/or Risks Affected

Exceptions


Notice Period

Notice Requirements

Citation

New York

Exempted Lines: Workers compensation; marine, inland marine; excess lines; employers liability; surety policies; reinsurance; personal lines; excess coverage’s; financial guaranty; mortgage guaranty; medical malpractice JUA; surplus lines

60 days for cancellation. Replacement or upon request by insured for non-renewal.

Nonpayment of premium; conviction of a crime which increases the hazard insured against, fraud or material misrepresentation; violation of policy condition, or an act or omission materially increasing the hazard insured against; material physical change in the insured property; continuation of premium volume would jeopardize solvency, as determined by the superintendent; continuation of the policy would violate state law, as determined by the superintendent; sufficient cause to believe insured will destroy, or permit to be destroyed the insured property; suspension/revocation of licenses (with respect to professional liability).

Cancel = 20 days during the first 60 days of a new policy except for reasons listed below; 15 days for policy in effect for 60 days. Non renew = No more than 120 days; no less than 60 days. Notice to include rights of insured as well as reasons for cancellation. Excess liability and jumbo risks require 30-120 days’ notice 15 days for nonpayment of premium

Notice mailed to broker as well as insured. Notice to advise insured of rights and reasons for cancellation. Mailed or delivered to the first-named insured at the mailing address shown on policy and to such insured's authorized Agent or broker. Insurer must retain a copy of nonrenewal notice and certificate of mailing.

NY INS s

3426

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Letter 2010-9

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Exceptions


Notice Period

Notice Requirements

Citation

North Carolina

Exempted Lines: Workers compensation; fidelity and surety; credit; marine; inland marine; commercial aircraft; multi-state location risks (except with regard to coverage located in N.C.); residual market risks; surplus lines; reinsurance

Cancel = 60 days, non-renewal = Policyholder obtains insurance elsewhere, accepts replacement coverage, or requests or agrees to nonrenewal

Nonpayment of premium; material misrepresentation; material and unforeseen increase in the hazard; substantial breach of contractual duties; fraud; willful failure to institute reasonable loss control measures; loss of facultative reinsurance; conviction of insured of a crime materially affecting insurability; policy continuation would place insurer in violation of state law as determined by the commissioner; named insured fails to meet requirements in corporate charter, articles of incorporation, etc., when insurer is organized to provide insurance to members of a group determination by commissioner that insurer’s solvency would be impaired. Nonrenewal: All reasons except those which are unfair trade practice or in conflict with policy terms

Cancel = 15 days and must state precise reason for cancellation to insured and mortgagee/loss payee. Notice shall also be sent to the Agent or broker of record. Non renew = 45 days and must state precise reason for nonrenewal. Notice shall also be sent to the Agent of record.

Given or mailed to the insured, and any designated mortgagee or loss payee, at their addresses shown in the policy or, if not indicated in the policy, at their last known addresses or electronic delivery

NC ST s 58-41-10 through NC ST s 58-41-20

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Notice Period

Notice Requirements

Citation

Ohio

Exempted Lines: Fidelity and surety bonds; private passenger automobile insurance; medical malpractice; surplus lines

90 days

Nonpayment of premium; fraud or misrepresentation; moral hazard or willful or reckless acts or omissions on the part of the named insured increasing the hazard insured against; unforeseeable increase in hazard; policy continuation would be hazardous to policyholders or the public, as determined by the Director of Insurance; loss of reinsurance; failure to correct material violations of safety codes or to comply with reasonable written loss control recommendations. nonrenewal: no statutory grounds

Cancel = 30 days; 10 days for nonpayment of premium. 60 days for medical malpractice policies cancelled for reasons other than nonpayment of premium. Notice to contain specified information including reasons, mailed to both insured and Agent. Non renew = 30 days. 60 days for medical malpractice policies. Notice to contain specified information, mailed to both insured and Agent.

Mail to insured's last known address or electronic delivery

OH ST s 3937.25 through OH ST s 3937.29

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Exceptions


Notice Period

Notice Requirements

Citation

Pennsylvania

(Law)

§ 40-60-101 et.seq.

Exempted: Reinsurance; workers compensation ,fidelity & surety bonds, ocean marine and medical malpractice are exempt from cancellation restrictions only

60 days; 30 days’ notice required

Substantial change in a material condition, factor, or loss experience; loss of or substantial decrease in reinsurance; material misrepresentation; policy obtained through fraud; nonpayment of premium; insured’s request; material failure to comply with policy terms, conditions, or duties; other reasons approved by commissioner Nonrenewal: Any valid reason

Cancel = 60 days; 15 days for material misrepresentation and nonpayment of premium. Reason to accompany, in duplicate. Non renew = 60 days. Reason to accompany, in duplicate

Registered or first class mail or delivered by the insurance company directly to named insured

PA ST 40 P.S. s 3401 through PA ST 40 P.S. s 3403, PA ST 40 P.S. s 3407, 31 PA ADC s 59.6

Tennessee Exempted: Surplus lines; personal risk; fidelity, ocean marine, reinsurance, aircraft liability and aircraft hull, insurance written by county mutual fire insurers and surety bonds

No restriction upon cancellation 60 days. Exemptions for non-renewal if insurer has offered renewal; named insured has obtained replacement coverage.

Nonpayment; conviction of named insured of a crime which affects hazard insured against; fraud or material misrepresentation; failure to comply with loss control; change in risk which increases hazard; determination that continuation would jeopardize solvency or place insurer in violation of insurance laws; violation of policy terms or conditions; commissioner’s approval Nonrenewal: no statutory provisions

Cancel = 10 days if policy has been in effect less than 60 days and is not a renewal or if cancellation is due to any of the enumerated reasons. Reason to accompany. Non Renew = 60 days.

Mailed by the insurer, its authorized Agent, or employee to named insured as shown in the policy declarations at address shown in such declarations. Delivery of such written notice either by the Agent or by the company shall be the equivalent of mailing or electronic delivery

TN ST s 56-7-1801 through TN ST s 56-7-1808

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Notice Requirements

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Virginia Exempted: Workers compensation; employers’ liability; surplus lines; policies covering any motor vehicle written on an excess basis; wet marine

Cancellation = No provision. Non-renewal exemptions = Named insured notified insurer that he does not wish policy to be renewed; insured fails to accept offer of renewal prior to date of expiration; affiliated insurer manifests willingness to renew.

No specified grounds

Both cancel & non renew = 45 days; 15 days for nonpayment of premium. Reason to accompany; advise insured of rights to request review of cancellation. 90 days for medical malpractice.

Registered or certified mail, with insurer obtaining a written receipt from the United States Postal Service showing the name and address of the insured stated in the policy, or obtaining a written receipt from the United States Postal Service showing the date of mailing and the number of items mailed and insurer retains a mailing list showing the name and address of the insured stated in the policy, or the last known address, to whom the notices were mailed, together with a signed statement by the insurer that the written receipt from the United States Postal Service corresponds to the mailing list retained by the insurer, and the insurer retains a copy of the notice of cancellation, refusal to renew, reduction in coverage, or increase in premium. Notice may also be sent electronically except for notice of cancellation.

VA ST s 38.2-231

West Virginia

Commercial lines (other than medical malpractice insurance noted above); surplus lines

No restriction upon cancellation for 60 days. No provision for non-renewal.

Nonpayment of premium; material misrepresentation; violation of material policy terms or conditions; unavailability of reinsurance, as certified by commissioner. **No mention of increase in risk.**

Cancel = 30 days. Reason to accompany. Non-renewal = 90 days.

Certified mail, return receipt requested.

WV ST s 33-20C-1 through WV ST s 33-20C-5

State

Lines and/or Risks

Affected

Exceptions


Notice Period

Notice Requirements

Citation

Wisconsin

Exempted: Reinsurance; ocean marine; surplus lines

No restriction of cancellation for 60 days. 10 days’ notice required. Exemption for Non renew = Policyholder has other insurance; has accepted replacement coverage; has requested or agreed to nonrenewal; policy is expressly designated as nonrenewable

Nonpayment; material misrepresentation; substantial and unforeseen change in risk; breach of contract, conditions, or warranties; attainment of age specified as terminal age for coverage

Cancel = 60 days if the policy is issued for a term longer than one year or for an indefinite term with a clause providing for such notice; cancellation effective at least 10 days after the first-class mailing or delivery of written notice to policyholder. Accompanied by reasons and instructions. Non renew = 60 days; 10 days for nonpayment of premium. Accompanied by instructions.

1st class mailing or delivery

WI ST 631.36

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