COMMERCIAL LINES MANUAL DIVISION ONE - AUTOMOBILE MIDDLESEX MUTUAL ASSURANCE COMPANY HOLYOKE MUTUAL INSURANCE COMPANY IN SALEM EXCEPTION PAGES

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1 The ISO Commercial Auto rates and rules are modified as shown below. The ISO loss costs displayed in the manual pages are to be adjusted to arrive at the final rate or premium. Apply the Loss Cost Multiplier to the manual loss costs prior to any other factor. The Loss Cost Multiplier does not apply to the Policy Minimum Premiums and other coverages where no modifications are indicated. AGENCY RISK SUBMISSION REQUIREMENTS A completed ACORD Application. Loss Experience Reports for the prior three (3) years. Loss Reports must have the prior carrier s name, the date the report was produced, policy number, the term of the report and the dates and description of any loss. If no losses have occurred, the loss run should state No Losses. Applicant must allow for an inspection prior to effective date if required by the Underwriter. If the applications submitted to us are unsigned by the Insured, the Agency must retain applications signed by the Insured in their file. These applications must be available to us upon request. LOSS EXPERIENCE If requested in writing by the Insured or an authorized agent, we will provide Loss Experience. This document will contain our Company name, the date the report was produced, policy number, the term of the report, and the dates and description of any loss. If no losses have occurred, the document will state No Losses. BROKER OF RECORD All BOR requests must have a BOR letter signed by the insured or an authorized representative of the insured. A complete application must accompany the BOR letter. We will not recognize the BOR request without a completed application. Once received, we will notify the incumbent agent in writing. The incumbent agent will have 5 days to obtain a rescinding letter upon receipt of notification. We will allow one rescinding letter. Beyond that, we will quote for both agents based on their respective submissions. We will not accept mid-term BOR requests on in-force business. We discourage mid-term quoting however we will pursue if the midterm quote application is accompanied with a BOR letter. COMMERCIAL ACCOUNT RESERVATIONS We will reserve an account for an agent only if a complete submission is received. We will accept reservations 4 calendar months prior to the effective date. For example, an account with a 5/15 effective date cannot be reserved until 1/15. TRANSITION A Transition factor will apply to renewals for the first 5 years in our new rating /issuance system. An Initial Change Ratio will be utilized to determine the transition factor. Initial Change Ratio = Expiring Premium divided by the Renewal Premium CA-E-1

2 Upon conversion and for each subsequent annual renewal, determine the Premium Transition Factor from the table below. Multiply the policy premium, determined in accordance with this manual, by the Premium Transition Factor and round the result to the nearest dollar. Initial Change Upon Conversion 1st 2nd 3rd 4th 5th Ratio Into System Renewal Renewal Renewal Renewal Renewal Positive Dislocation Negative Dislocation & over CA-E-2

3 Example Expiring Premium $1,000 Revised Premium, same exposure and coverage $1,800 Initial Change Ratio $1,000/$1,800=.556 Transition factor - year Adjusted premium year x $1,800= $1,080 Assume the calculated premium in year 2 goes to $2,000 because the insured purchases additional coverage: Transition factor - year Adjusted premium year x $2,000 $1, ADDITIONAL PREMIUM CHANGES A. Calculation Of Premium Delete 9.A.2. and replace with the following: If changes are made to a ratable exposure during the policy period, apply the rates and rules in effect at the beginning of the policy period. This rule applies to existing exposure changes, and to any new exposures added after the beginning of the policy period, except for any rules specifically written to apply otherwise for reasons such as statutory or regulatory compliance. The additional premium developed is in addition to any applicable policy writing minimum premium. B. Waiver Of Premium Delete additional premium waiver. 10. RETURN PREMIUM CHANGES B. Waiver Of Premium Delete return premium waiver. COMPANY ENDORSEMENTS AUTO ENHANCEMENT ENDORSEMENT, ACA This optional endorsement provides several coverage extensions under SECTION III PHYSICAL DAMAGE COVERAGE. See endorsement for list of coverages. It also provides a waiver of deductible for glass. This endorsement is available only with Business Auto Coverage Form. The premium charge will be based on number of vehicles. For the purpose of the Enhancement Endorsement, vehicle will be any vehicle type other than trailers. CA-E-3

4 The number of vehicles will be calculated at the time that the endorsement is added and the charge is made. Subsequent changes in the number of vehicles during the policy term will not result in premium adjustments. The charge for the Enhancement Endorsement will be in addition to the Minimum Premium. When an increase to a coverage that is included in the Enhancement Endorsement is purchased on a standalone basis, normal ISO rates and rules apply independent of what is included in the endorsement. The premium will be a flat charge as shown in the table below. The rate modification factor will apply. Number of vehicles Premium 0-5 $ SEASONAL USE ENDORSEMENT, ACA Endorsement allows the suspension of vehicles due to seasonal operations. A credit factor is applied according to the number of days the vehicle will not be in use. Factor can only be applied by your underwriter. SEASONAL VEHICLE CREDIT FACTORS Days Out Of Use Per Year At least 30 but less than 59 Factor PROPERTY DAMAGE LIABILITY DEDUCTIBLE SNOWPLOWING OPERATIONS, ACA $500 Per "Accident" special liability property damage deductible for snowplowing operations. No change to premium for this endorsement. CA-E-4

5 AUTO ORIGINAL EQUIPMENT REPLACEMENT PARTS, ACA GARAGE ORIGINAL EQUIPMENT REPLACEMENT PARTS, ACA In the event of a repairable covered auto, all repairs will be based upon the utilization of parts from the original equipment manufacturer or factory approved parts or parts licensed by the original manufacturer, if available. No change to premium for this endorsement. CA-E-5