RATE FILING METHODS FOR PROPERTY/CASUALTY INSURANCE, WORKER S COMPENSATION, TITLE 5/06

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1 Explanation: In a state with prior approval, a filing may be deemed to have been approved after a certain number of days. If such a provision exists, the number of days is noted in parentheses. File and use states may require filing a certain number of days before the rates may become effective. If so, it is noted. Use and file states may require filing within a certain number of days after the rate becomes effective, and the number of days will be so noted. Flex rating percentages that trigger prior approval are noted in parentheses, also. A more complete definition of each filing method is found at the end of the chart. The date following each state indicates the last time information for the state was reviewed/changed. AL Ins. Reg. 123 commercial lines prior approval medical malpractice, property and casualty Desired result is improving the speed to market of filings. prior approval prior approval rate filings seeking an overall rate increase of 10% or more personal lines to , prior approval (30 days) property and inland marine to , prior approval (30 days) casualty and surety, worker s compensation (60 days) 2006 National Association of Insurance Commissioners II-PA-10-1

2 AK prior approval (15 days) (amendments to medical malpractice, worker s compensation, and assigned risk rates Flex rating on rate changes All p/c lines except worker s compensation, medical malpractice, assigned risk File and Use rate changes (30 days) All p/c lines except WC, medical malpractice, assigned risk rates Prior approval Worker s compensation rating organization loss cost and assigned risk rate Rate increases or decreases of 10% cumulative over 12 months may be made without prior approval; rating changes falling outside these limits subject to file and use (30 days) File and use when the rate change is outside the flex bands. Hearing required for rating org loss cost filing prior approval (30 days) AZ (30 days) use and file (30 days) other p/c lines File and use (30 days) AR (20 days) competitive market; prior approval (60 day deemer) in noncompetitive market personal lines and small commercial risks Filing method based is on a finding of the existence of a competitive market by the commissioner no filing large commercial risks prior approval No provision 2006 National Association of Insurance Commissioners II-PA-10-2

3 CA Ins (amendments prior approval (60 day deemer) private passenger auto pending Ins Ins (amendments (30 day waiting period) prior approval (60 day deemer) other p/c lines However, Ins says insurer may use a new rate prior to 30 days after the filing if the new rate is a reduction and has been made publicly available. CO Ins , prior approval of manual rates The commissioner may not disapprove rates for certain contracts established prior to 1/1/07 as a result of a collective bargaining agreement ; (5); ; ; ; Ins. Reg , Prior approval (16 working day deemer) loss cost filing by a rating organization; auto assigned risk Auto: See Bulletin 18-03; Bulletin (amendments ; Ins. Reg ; and , Ins. Reg (30 days) no filing, must maintain documentation All other P&C filings, except exempt Commercial Policyholders Exempt commercial policyholders 2006 National Association of Insurance Commissioners II-PA-10-3

4 CT 38a-676 (amendments commercial lines (exception) Prior approval medical malpractice For rates increasing 7.5% or more over last rates filed 38a a-419 (30 day waiting period) in competitive market; (30 day waiting period) in noncompetitive market prior approval (30 day deemer) personal lines Bulletin PC-8 is filing standard for loss costs. DE tit (30 days) all lines except Forms and Rates Bulletin is filing standard for loss costs. DC to 201 prior approval all lines 2006 National Association of Insurance Commissioners II-PA-10-4

5 FL (60 days) or use and file, (30 days) (insurer s option) auto (amendments (amendments (amendments ; Reg. 69O (90 days) or use and file (30 days) (insurer s option) Maintain documentation to show justification for individual rate or that risk meets definition of a large commercial risk; complete quarterly reports. prior approval rate set by FL Dept. all other lines except and individually rated risks and large commercial risks If use and file rate is found excessive, the insurer must return excise premium (amendments GA (amendments prior approval (45 day deemer with option to extend by 100 days) (45 days) no filing personal private passenger auto other p/c lines, including worker s compensation large commercial risks Directive 90-PC-6 is filing standard for loss cost. Any filing may be examined. Increases of 10% to 25% may be examined at the commissioner s discretion. Greater than requires 25% mandatory examination. Reg No provision 2006 National Association of Insurance Commissioners II-PA-10-5

6 HI 431: (amendments prior approval (30 day wait period) p/c ID (amendments No provision to prior approval (90 day wait period) prior approval (60 days) use and file workers compensation other p/c lines Commissioner may require insurers to submit new filings for any type of coverage when the commissioner has actuarially sound information that the rates are excessive, inadequate or unfairly discriminatory. 431: stipulates that insurers shall keep a complete file of its schedules of premiums and charges and amendments thereto until at least 5 years after they ceased to be in effect. File shall be available for the commissioner s inspection. NCCI makes filings. Ask companies to file their rates. IL Reg. tit to prior approval use and file (10 days) Private passenger auto, taxicabs, motorcycles, homeowners (including mobile homeowners), allied lines, dwelling fire, liquor liability 215 ILCS 5/457; Reg. tit use and file (30 days if a competitive market) Assumption of competitive market unless hearing by commissioner determines otherwise. 215 ILCS 5/457 (30 days if noncompetitive market) 215 ILCS 5/155.18; Medical Liability Rates Regulation ILCS 5/400.1 medical malpractice group inland marine 25 of the insureds affected by a rate increase may request a hearing. Burden is on the company to justify a rate increase. no filing other p/c lines, 2006 National Association of Insurance Commissioners II-PA-10-6

7 IN (effective July 1, 2006) p/c lines to (effective July 1, 2006) large commercial insured Bulletin 67 is filing standard for loss costs. Rate and form filing instructions are on the department website at exempt from filing requirements modified (30 day wait) IA 515A.4; 515F.5 prior approval (30 day deemer may be extended additional 15 days), other p/c lines, Directive of 4/6/90 is filing standard for loss costs. 515F.20 to 515F.25 use and file (15 days) homeowners, private passenger auto Filing method based on a finding of the existence of a competitive market by commissioner. KS S.B. 442 (2006); S.B. 539 (2006) prior approval (30 day deemer) (30 days) personal lines (no wait) commercial lines, farm owners, business owners any other rate filing no filing large commercial insured 2006 National Association of Insurance Commissioners II-PA-10-7

8 KY filing method based on finding of existence of competitive market by commissioner (amendments use and file (15 days) in competitive market; prior approval (30 days) in non-competitive market; prior approval of any rates which when combined with any rating factors effectively change pre-tax premium of any particular policy by more than +/- 25% in any 12-month period of time no filing personal lines, auto guaranty, credit, medical malpractice, other commercial lines LA 22:1401 (amendments 22:1401(z) (amendments prior approval (45 day deemer) (30 days) if increase or decrease is within 10% of rates in effect all personal p/c lines not qualifying for flexible rating all personal p/c lines that qualify for flexible rating 10% limitation not applicable on an individual insured basis under flexible rating. 22: (45 day) all commercial p/c lines 22:1407 prior approval (45 day deemer) all lines except worker s compensation 22:1407(f) modified prior approval (50 days) all lines except worker s compensation 22:1407(k) (90 days) (assigned risk) 22:1407(k) (90 days) (voluntary market) if no change in relationship between rates and expense portion and no change in rate relativities on any basis other than loss experience. if increase in rates is 25% or less on an annual basis, if over 25%, prior approval with 45 day deemer. if rate change does not exceed average of 20% annually, if exceeds 20% prior approval needed with 45 day deemer. Reg. 37:XIII filing information 2006 National Association of Insurance Commissioners II-PA-10-8

9 ME tit. 24-A 2304-A modified p/c lines, tit. 24-A 2412-A no filing large commercial risks tit. 24-A 2382 (amendments ; tit. 24-A 2384-A prior approval MD Ins ; (30 days) Ins ; ; to ; to ; to ; to ; to prior approval (30 day deemer) p/c lines Ins ; to ; to prior approval (15 day deemer) Ins to ; to ; to ; lines designated by commissioner as competitive filing method based on finding of existence of competitive market by commissioner. MA 174:6 (15 days) fire Massachusetts also has rate hearings. 175A:6 (15 days) casualty, 175E:5 to 175E:7 set by commissioner or file and use (45 days) motor vehicle filing method based on finding of existence of competitive market by commissioner National Association of Insurance Commissioners II-PA-10-9

10 MI (amendments auto and homeowner (4) prior approval (15 day deemer can be extended by 15 days) property excluding auto and homeowners to (45 days) and casualty excluding property and inland marine excluding auto and homeowners and casualty excluding commissioner can request more information within 10 days after filing. alternative filing method alternative filing method MN 70A.06 (60 days) all lines except worker s compensation 60A.315 effective upon filing auto and homeowners Optional expedited filing procedure includes a certification signed by an officer that the filing complies with all laws and regulations (amendments prior approval Refer to Bulletin MS prior approval (30 day deemer) p/c lines, including worker s compensation No provision 2006 National Association of Insurance Commissioners II-PA-10-10

11 MO (6) informational filing only commercial p/c (1) use and file (10 days) other p/c lines S.B. 953 (2006) use and file (30 days) (1) use and file (30 days) (competitive market) (2) (30 days) (noncompetitive market) MT file with data and use file with data and use p/c lines NE to (amendments prior approval (30 days) (30 days) effective 90 days after end of 2005 legislature personal lines, worker s compensation, crop, professional liability For medical liability insurance may use rate in excess of that previously filed for extra-hazardous exposures. most commercial lines, excess and large deductible worker s compensation Bulletin CB-50(Amended 2001) includes filing standard for loss costs flex rating 40% Medical professional liability; property/casualty prior approval to ; Reg. tit. 210 ch. 73 may be exempt from rate and form filings large commercial policyholders Must meet certain qualifications for exemption National Association of Insurance Commissioners II-PA-10-11

12 NV 686B.070 to 686B.110 (60 day deemer) prior approval (60 days) all personal lines, medical professional liability rates, except surety 616B.380 no file commercial auto, farm owners, commercial general liability 692A.120 (30 days) 686B.177 prior approval (60 day deemer) w/c loss costs and assigned risk rates 686B.1775 (15 days) (60 days if non-competitive market) w/c loss cost multipliers and supplementary rate information NH 412:15 (amendments (30 days) personal lines Competitive market prior approval (30 day deemer can be extending 30 days) personal lines Noncompetitive market use and file (30 days) commercial lines Competitive market prior approval (30 day deemer can be extended by 30 days) commercial lines Noncompetitive market 412:7 no filing large commercial risks 412:2 use and file Title 412:12 prior approval worker's compensation 412:16 (amendments no filing required ocean marine, aircraft, financial guaranty, boiler and machinery Any filing received by the dept. will be returned to the filer without review 2006 National Association of Insurance Commissioners II-PA-10-12

13 NJ 17:29AA-5; Reg. 11: use and file (30 days) commercial lines where reasonable degree of competition 17:29A-6, 17:29A-7 prior approval other p/c lines, worker s compensation Filing method is based on a finding of the existence of a competitive market by commissioner. 17:29A-46.6; Reg. 11: to 11: prior approval auto (personal) May file rate changes within range of 3% of prior rate and get approval decision within 30 days; within 7%, approval decision within 45 days. 17: to 11: prior approval personal lines other than auto May file rate increases up to 5% of prior rate and get approval decision within 30 days. 17:46B-41 to 17:46B-53 prior approval Title NM 59A-17-9; 59A A prior approval (60 day deemer) prior approval (90 day deemer) p/c lines 59A-30-6 commissioner-set rates NY Ins. Law 2305 (amendments ; 2328 prior approval (30 can be extended to maximum of 75 days),, medical malpractice, personal and commercial lines Ins. Law 2344 (amendments ; Ins. Reg. 129 flex rating percentage varies by line commercial liability Ins. Law 2310, Ins. Reg.129 (30 days can be extended to 75) homeowners, farm owners other p/c lines 2006 National Association of Insurance Commissioners II-PA-10-13

14 NC ; ; ; (amendments ; prior approval (60 days) prior approval (50 days) modified personal auto homeowners commercial property and casualty Filing by rate bureau; Bulletin 90-L-4 is filing standard for loss costs. (120 days) (60 days) ND (amendments prior approval (60 days) all lines except workers compensation and aircraft OH all other lines including homeowners, casualty, motor vehicle, fidelity, surety in competitive market prior approval (30 day deemer) noncompetitive market commercial casualty commercial casualty Filing method based on a finding of the existence of a competitive market by the commissioner prior approval (30 day deemer) monoline property, monocline inland marine, Reg medical malpractice First filing is due by March 26, National Association of Insurance Commissioners II-PA-10-14

15 OK Reg. 365:15-7-3: tit prior approval medical malpractice tit (amendments no filing special risks as defined by statute OR flex rating (15% increase or decrease) commercial casualty prior approval, other p/c lines PA tit to 2009 prior approval (60 days plus 30 day extension) personal auto prior approval (30 day deemer plus 30 day extension) personal property prior approval Filed by rating bureau prior approval (30 day deemer) exempt from filing large commercial risks (45 days plus 30 day extension) small commercial risks 2006 National Association of Insurance Commissioners II-PA-10-15

16 RI (amendments ; to (amendments ; to (amendments (30 days plus 30 day extension) casualty, property, Bulletin of 4/27/90 is filing standard for loss costs to (amendments (amendments to (amendments (amendments prior approval no filing flex rating 5% flex rating 5% large commercial risks casualty insurance fire and marine SC ; ; prior approval (60 day deemer) all lines prior approval or commercial auto rate changes of 7% or less prior approval prior approval (60 day deemer) SD to all lines except there is an exception to the rate and form approval rules for large commercial risks to prior approval (30 days) Title to no filing large commercial risks 2006 National Association of Insurance Commissioners II-PA-10-16

17 TN (amendments prior approval (30 day deemer personal lines plus 30 day extension) (a) (amendments use and file (15 days) commercial lines (b) (amendments prior approval (c) (amendments use and file (15 days) loss cost multipliers TX (amendments (60 days) I.C. art. 5.81, , 5.55 commercial multi-peril, general liability, commercial property, I.C. art prior approval (30 day deemer) inland marine I.C. art prior approval (60 day deemer) professional liability, miscellaneous casualty and surety I.C. art mortgage guaranty I.C. art board sets rates Title 2006 National Association of Insurance Commissioners II-PA-10-17

18 UT 31A-19a-203 use and file (30 days) p/c Commissioner may disapprove within 90 days after filed. May by rule specify rates be filed 30 days before become effective. 31A-19a-209 (30 days) 31A-19a-405 (30 days) Rating bureau files loss costs; insurers file loss cost multipliers; Bulletin 90-6 is filing standard for loss costs. VT tit prior approval (30 day deemer), experience rating plan, scheduled rating plan and statistical plan, uniform classification system tit (a) (amendments tit (c)(1) (amendments tit (c)(2) (amendments use and file (15 days) p/c (except claims made and assigned risk), and other types of (voluntary market) prior approval (30 day deemer) non-competitive market claims made and noncompetitive market rates prior approval (30 day deemer) and auto (assigned risk) 2006 National Association of Insurance Commissioners II-PA-10-18

19 VA , , prior approval (60 day deemer) 2006 Residual markets for workers compensation and automobile (VAIP); home protection; credit property; credit involuntary unemployment Bureau has rate approval authority for certificates of credit property insurance or credit involuntary unemployment insurance issued to Virginia consumers even if the master policy was issued or delivered in another state prior approval Property insurance residual market facility (FAIR Plan) Rate standards and process established by , and approved by Commission Order after hearing Workers compensation loss costs Voluntary market loss costs and residual market rates approved by Commission order after hearing no filing requirement Large commercial risks as defined in the statute Does not apply to workers compensation, professional liability and commercial auto allows exemptions/suspensions of rate filing requirements Lines are stated in various administrative orders Various administrative orders exempt or suspend rate filing requirements for specific lines or types of insurance products in competitive market General liability; homeowners; fire; miscellaneous property & casualty; burglary & theft; glass; boiler & machinery; animal; fidelity; surety; credit; inland marine; farmowners; mortgage guaranty; commercial multi-peril; credit property; credit involuntary employment; automobile, professional liability and legal services Admin. Letter is filing standard for loss costs. Various administrative orders exempt or suspend rate filing requirements day prior filing requirement for noncompetitive lines P/C lines identified by commission order after hearing Filing method is based on a finding of the existence of a competitive market , no filing requirement 2006 National Association of Insurance Commissioners II-PA-10-19

20 WA ; S.S.H.B (2006) prior approval (30 day deemer can be extended to 45 days) p/c, (except commercial property casualty), medical malpractice ; S.S.H.B (2006) use and file (30 days) (15 days) commercial lines Reg Rate filing requirements are suspended for large commercial property casualty accounts. WV (amendments ; (amendments prior approval (60 day deemer) other p/c lines, excluding Worker s compensation coverage is written by a monopolistic state fund. Info. Letter No. 68 is filing standard for loss costs. commercial lines P/C 33-20B-3 (amendments Prior approval (90 day deemer) or unapproved rates medical malpractice during 90-day period, hold a hearing for any filing that requests an increase of 10% or more. WI WY no provision use and file (30 days) p/c, Bulletin of 6/11/90 is filing standard for loss costs. prior approval (30 day deemer) Wisconsin Compensation Rating Bureau makes the rate filings prior approval (30 day deemer), medical malpractice no file competitive market; prior approval (30 day deemer) noncompetitive market p/c, including worker s compensation Competitive market is assumed to exist unless designated as noncompetitive or by finding of noncompetitiveness by commissioner National Association of Insurance Commissioners II-PA-10-20

21 DEFINITIONS OF RATING LAWS Prior Approval Modified Prior Approval Flex Rating File and Use Use and File No File Rates must be filed with and approved by the state insurance department before they can be used. Approval can be by means of a deemer provision, which indicates approval if rates are not denied within a specified number of days. Rate revisions involving change in expense ratio or rate relativity require prior approval. Rate revisions based on experience only are subject to laws. Prior approval of rates required only if they exceed a certain percentage above (and sometimes below) the previously filed rates. Rates must be filed with the state insurance department prior to their use. Specific approval is not required but the department retains the right of subsequent disapproval. Rates must be filed with the state insurance department within a specified period after they have been placed in use. Rates are not required to be filed with or approved by the state insurance department. However, the company must maintain records of experience and other information used in developing the rates and make these available to the commissioner upon his request. This chart does not constitute a formal legal opinion by the NAIC staff on the provisions of state law and should not be relied upon as such. Every effort has been made to provide correct and accurate summaries to assist the reader in targeting useful information. For further details, the statutes and regulations cited should be consulted. The NAIC attempts to provide current information; however, readers should consult state law for additional adoptions National Association of Insurance Commissioners II-PA-10-21

22 2006 National Association of Insurance Commissioners II-PA-10-22