Casualty Actuarial Society Seminar on Ratemaking March 7 - 9, 2007 REG-1: “Regulatory Roundtable...

Casualty Actuarial SocietySeminar on Ratemaking

March 7 - 9, 2007REG-1: “Regulatory Roundtable Discussion”

Chuck Romberger, ACAS, CPCU, ARM

2

Pennsylvania

Statutory Rate Filing Requirements Climate, Process, “Hot” Issues Potential Legislation

3

Statutory Rate Filing Requirements

Personal Auto Homeowners Workers Compensation Medical Malpractice & Other Commercial

4


Personal Auto– Prior Approval– Review period: 60 days + 30 by extension– Exception: T.31 Ch. 130 (Pers. Auto & HO)

Promotes competition Permits certain decreases in currently approved rates Decreases up to 10% either by coverage or line of ins. “File-and-Use” treatment

5


Homeowners– Prior Approval– Review period: 30 days + 30 by extension– Exception: T.31 Ch. 130 (Pers. Auto & HO)

(details not repeated – see Personal Auto slide)

6


Workers Compensation– Insurer filings

LCMs: file-and-use (30-day waiting period) Others: prior approval (30 days + 150 days by ext.)

– Exs. large deductible, sub-classifications,…

– Rating organization filings Prior approval (30 days + 150 days by extension) Must annually file loss cost revisions & insurers must

adopt on the date approved (usually April 1st)

7


Medical Malpractice & Other Com’l (1 of 2)– Large Commercial Risks

No filing requirement!

– JUA & Assigned Risks Prior approval

– Review period: 45 days + 45 days by extension

8


Medical Malpractice & Other Com’l (2 of 2)– Small commercial risks

Prior approval: initial rates & changes >10% in agg.– Review period: 45 days + 45 days by extension

File-and-Use: changes 10% or less in agg.– Waiting period: 45 days

Use-and-File: rates for individual insureds (25%)– File within 30 days of effective date

9


For additional information on Pennsylvania’s filing requirements, please see our website at: http://www.ins.state.pa.us/ins/cwp/view.asp?a=1280&Q=545457

Or e-mail me:

[email protected]

10

Climate, Process, “Hot” Issues

Personal Auto– Top 20 writers are requested to provide extensive

data for Department analysis– Department considers rate indications at a level

between statewide & company rating territories for all companies

– We frequently see Phila. indications below R.O.S., consistent w/ ISO & PCI Stat Data

11


Homeowners– Top 20 writers are requested to provide additional

data for Department analysis– Department closely monitors any potential

reductions in coverage or limits

12


Personal Auto & Homeowners– Non-Traditional Rating Approaches (1 of 2)

More tiers & rating territories Rating territories varying by coverage Complex rating variables & algorithms New & unusual characteristics being considered

– Ex. number of flower shops per area or home improvement stores sales per area…

13


Personal Auto & Homeowners– Non-Traditional Rating Approaches (2 of 2)

Main concerns – Renewal impacts (conflicts with our laws & regulations)– Fairness, accuracy and potential disparate impacts

14


Workers Compensation– Companies are required to adopt bureau loss

costs on the date approved by the Department– Companies can modify LCMs at any time

15


Medical Malpractice & Other Com’l– 2007 Med Mal Capacity Study is underway

Limits are currently $500,000/$1,500,000 Comm. didn’t find sufficient capacity in 2005

– Physician & Surgeon rates have not changed much since 2005

– Many new writers in the market in the last 5 years 7 domestics, 6 foreign, 2 surplus lines, & 38 RRGs

16

Potential Legislation

Personal Auto – HB 34 (2007)– (A change to “plain language”?)– Amend “tort” to “right to sue”– Increase the minimum limits under the MVFRL

From 15/30/5/5 to 25/50/10/10

– Require stacked UM/UIM @ BI limits– Require an extensive “menu” of coverage options– Possibly require Comp & Coll

17

Potential Legislation

Credit / Insurance Scoring – HB 94 (2007)– Legislative proposals are submitted on this topic

almost annually in Pennsylvania. – Scoring is not directly addressed in our law…

currently.– Underwriting guidelines/practices do not required

our prior review and/or approval.– We have not approved a personal lines rate/rule

filing that contains credit scoring.

18

Questions???

Casualty Actuarial Society Seminar on Ratemaking March 7 - 9, 2007 REG-1: “Regulatory Roundtable...

Documents

Transcript of Casualty Actuarial Society Seminar on Ratemaking March 7 - 9, 2007 REG-1: “Regulatory Roundtable...