SERFF Tracking #: ZURC-130296830 State Tracking #: Company Tracking #: 38643 State: District of Columbia Filing Company: Zurich American Insurance Company TOI/Sub-TOI: 17.1 Other Liability-Occ Only/17.1023 Veterinarian Product Name: Veterinary Student Professional Liability Insurance Policy Project Name/Number: /38643 Filing at a Glance Company: Product Name: State: TOI: Sub-TOI: Filing Type: Zurich American Insurance Company Veterinary Student Professional Liability Insurance Policy District of Columbia 17.1 Other Liability-Occ Only 17.1023 Veterinarian Rate/Rule Date Submitted: 01/21/2016 SERFF Tr Num: SERFF Status: State Tr Num: State Status: Co Tr Num: 38643 Effective Date Requested (New): Effective Date Requested (Renewal): Author(s): Reviewer(s): ZURC-130296830 Closed-APPROVED 04/01/2016 04/01/2016 Paula Bartell Disposition Date: 03/21/2016 Disposition Status: Effective Date (New): Effective Date (Renewal): Monica Myers (primary) APPROVED PDF Pipeline for SERFF Tracking Number ZURC-130296830 Generated 07/06/2016 03:10 PM
SERFF Tracking #: ZURC-130296830 State Tracking #: Company Tracking #: 38643 State: District of Columbia Filing Company: Zurich American Insurance Company TOI/Sub-TOI: 17.1 Other Liability-Occ Only/17.1023 Veterinarian Product Name: Veterinary Student Professional Liability Insurance Policy Project Name/Number: /38643 General Information Project Name: Project Number: 38643 Reference Organization: Reference Title: Filing Status Changed: 03/21/2016 State Status Changed: Created By: Paula Bartell Corresponding Filing Tracking Number: ZURC-130296829 Status of Filing in Domicile: Pending Domicile Status Comments: Reference Number: Advisory Org. Circular: Deemer Date: Submitted By: Paula Bartell Filing Description: Zurich American Insurance Company submits for filing of a new program to provide professional liability coverage for veterinary students under the supervision of a licensed veterinarian. The Veterinary Student Professional Liability Insurance Policy consists of the Veterinary Student Professional Liability Insurance Policy (U-VPL-200-A), the Veterinary Student Professional Liability Insurance Policy Master Policy Declarations (U-VPL-D-200-A), and the Veterinary Student Professional Liability Insurance Policy Certificate of Insurance (U-VPL-201-A). The policy provides coverage on an occurrence basis. A Master Policy is issued to the American Veterinary Medical Association Professional Liability Insurance Trust, and a Certificate of Insurance is issued to the students off the Master Policy. Zurich American Insurance Company has the right and duty to defend any claims against the insured under this policy. The Veterinary Student Professional Liability Insurance Policy will use rates determined per the attached Rating Plan Company and Contact Filing Contact Information Paula Bartell, Project Manager 1400 American Lane Schaumburg, IL 60196-1056 Filing Company Information Zurich American Insurance Company 1400 American Lane Schaumburg, IL 60102 (847) 605-6000 ext. [Phone] paula.bartell@zurichna.com 847-605-6177 [Phone] 847-605-7768 [FAX] CoCode: 16535 Group Code: 212 Group Name: FEIN Number: 36-4233459 State of Domicile: New York Company Type: State ID Number: Filing Fees Fee Required? Retaliatory? Fee Explanation: No No PDF Pipeline for SERFF Tracking Number ZURC-130296830 Generated 07/06/2016 03:10 PM
SERFF Tracking #: ZURC-130296830 State Tracking #: Company Tracking #: 38643 State: District of Columbia Filing Company: Zurich American Insurance Company TOI/Sub-TOI: 17.1 Other Liability-Occ Only/17.1023 Veterinarian Product Name: Veterinary Student Professional Liability Insurance Policy Project Name/Number: /38643 Correspondence Summary Dispositions Status Created By Created On Date Submitted APPROVED Monica Myers 03/21/2016 03/21/2016 PDF Pipeline for SERFF Tracking Number ZURC-130296830 Generated 07/06/2016 03:10 PM
SERFF Tracking #: ZURC-130296830 State Tracking #: Company Tracking #: 38643 State: District of Columbia Filing Company: Zurich American Insurance Company TOI/Sub-TOI: 17.1 Other Liability-Occ Only/17.1023 Veterinarian Product Name: Veterinary Student Professional Liability Insurance Policy Project Name/Number: /38643 Disposition Disposition Date: 03/21/2016 Effective Date (New): Effective Date (Renewal): Status: APPROVED Comment: Rate data does NOT apply to filing. Schedule Schedule Item Schedule Item Status Public Access Supporting Document Consulting Authorization Yes Supporting Document Actuarial Certification (P&C) Yes Supporting Document District of Columbia and Countrywide Experience for the Yes Last 5 Years (P&C) Supporting Document District of Columbia and Countrywide Loss Ratio Analysis Yes (P&C) Supporting Document Actuarial Memo Yes Rate Veterinarian Student Professional Liability Program Rules and Rating Manual Yes PDF Pipeline for SERFF Tracking Number ZURC-130296830 Generated 07/06/2016 03:10 PM
SERFF Tracking #: ZURC-130296830 State Tracking #: Company Tracking #: 38643 State: District of Columbia Filing Company: Zurich American Insurance Company TOI/Sub-TOI: 17.1 Other Liability-Occ Only/17.1023 Veterinarian Product Name: Veterinary Student Professional Liability Insurance Policy Project Name/Number: /38643 Rate Information Rate data does NOT apply to filing. PDF Pipeline for SERFF Tracking Number ZURC-130296830 Generated 07/06/2016 03:10 PM
SERFF Tracking #: ZURC-130296830 State Tracking #: Company Tracking #: 38643 State: District of Columbia Filing Company: Zurich American Insurance Company TOI/Sub-TOI: 17.1 Other Liability-Occ Only/17.1023 Veterinarian Product Name: Veterinary Student Professional Liability Insurance Policy Project Name/Number: /38643 Rate/Rule Schedule Item Schedule Item Previous State No. Status Exhibit Name Rule # or Page # Rate Action Filing Number Attachments 1 Veterinarian Student CW New Veterinarian Student Stand- Professional Liability Program Alone Rating Plan - Rules and Rating Manual Revised2.pdf PDF Pipeline for SERFF Tracking Number ZURC-130296830 Generated 07/06/2016 03:10 PM
VETERINARIAN STUDENT PROFESSIONAL LIABILITY PROGRAM RULES AND RATING PLAN MANUAL COUNTRYWIDE I. Eligibility This program is for students who are enrolled in an AVMA listed college of veterinary medicine and a member in good standing of the Student AVMA Professional Liability Insurance Trust Purchasing group. II. Premium Computation A. Compute the premium by using the annual rates in effect at policy/certificate inception B. Prorate the premium when the policy/certificate is issued for less than a full year C. Premiums are calculated as specified in the Rules and Rating Manual D. Premiums are rounded to the nearest dollar amount at the final premium III. Midterm Changes A. Additional Premium Changes 1. Prorate all changes requiring additional premium 2. Apply the rates and rules in effect on the effective date of the policy/certificate. In computing the additional premium, charge the amount applicable on the effective date of the change. B. Return Premium Changes 1. Compute the return premium at the rates used to calculate the policy/certificate premium 2. Compute return premium pro rata and round to the next higher whole dollar when any coverage or exposure is deleted or an amount of insurance is reduced. IV. Policy Cancellation Compute the return premium pro rata and round to the nearest whole dollar when a policy/certificate is cancelled. Student-Coverage The annual premium will be determined by the following limit (per occurrence/aggregate) of liability: Limits Premium 1,000,000/3,000,000 $10 per student 2,000,000/2,000,000 $11 per student
SERFF Tracking #: ZURC-130296830 State Tracking #: Company Tracking #: 38643 State: District of Columbia Filing Company: Zurich American Insurance Company TOI/Sub-TOI: 17.1 Other Liability-Occ Only/17.1023 Veterinarian Product Name: Veterinary Student Professional Liability Insurance Policy Project Name/Number: /38643 Supporting Document Schedules Bypassed - Item: Bypass Reason: Attachment(s): Item Status: Status Date: Satisfied - Item: Comments: Attachment(s): Item Status: Status Date: Bypassed - Item: Bypass Reason: Attachment(s): Item Status: Status Date: Satisfied - Item: Comments: Attachment(s): Item Status: Status Date: Satisfied - Item: Comments: Attachment(s): Item Status: Status Date: Consulting Authorization Not applicable Actuarial Certification (P&C) Actuarial Opinion-GF.pdf District of Columbia and Countrywide Experience for the Last 5 Years (P&C) N/A New Program District of Columbia and Countrywide Loss Ratio Analysis (P&C) DC Expense Exhibits.pdf Actuarial Memo Student Vets Explanatory Memorandum - CW - Revised2.pdf PDF Pipeline for SERFF Tracking Number ZURC-130296830 Generated 07/06/2016 03:10 PM
Actuarial Opinion ZURICH AMERICAN INSURANCE COMPANY (put company name) Filing being certified: Veterinarians Student Professional Liability Program I, being a qualified actuary, certify that the rates in this filing have been developed in accordance with generally accepted and reasonable actuarial techniques. I have reviewed these rates and/or rating plans and attest that they are not excessive, inadequate or unfairly discriminatory. Name of qualified actuary: Actuarial Designation: Greg Finestine FCAS
Zurich North America Other Liability District of Columbia Exhibit 1 Calculation of Expected Loss Ratio (1) Commissions 0.0% (2) Taxes, Licenses, and Fees 2.3% (3) General Expenses 4.5% (4) Other Acquisition Expense 5.6% (5) Profit/Contingency incl. Investment Income 12.7% (6) TOTAL 25.1% (7) Loss + All Loss Adjustment 74.9%
Zurich North America Other Liability District of Columbia Exhibit 2 Determination of Expense Provisions (1) (2) (3) (4) (5) (6) (7) 3-Year Expense Item Source 2010 2011 2012 2013 2014 Average Selected General IEE (% of Written Prem) 3.4% 5.7% 4.9% 3.8% 4.7% 4.5% 4.5% Other Acquisition IEE (% of Written Prem) 7.4% 7.6% 5.8% 5.3% 5.8% 5.6% 5.6% Commissions Selected Rate 0.0% Taxes, Licenses, Fees 2.3%
Zurich North America Other Liability Calculation of the Profit & Contingency Provision Explanatory Memorandum for Exhibit 3 The purpose of this document is to describe the method used to calculate the profit and contingency factor as shown in this exhibit. The approach relies on a model which simulates cash flows for a specific type of business. The internal rate of return (IRR) for these cash flows is equal to the target return on equity (ROE). Using a trial and error process, the permissible loss and all loss adjustment ratio is varied until the target ROE is reached. Given the loss and loss adjustment ratio which produces the target ROE, the profit/contingency factor is then determined (profit/contingency = 100% - (Loss + LAE) - Underwriting Expenses). Key assumptions used in this model are as follows: * Target ROE is 15%. * All premium is collected at policy inception. * Expenses are paid at policy inception (production, general, taxes, licenses & fees). * Losses paid and loss reserves are set according to selected payment pattern for specific line of business. * All sources of investment income including surplus are reflected. * The investment rate for reserves (policyholder dividend reserves, UEPR, and loss and LAE reserves) and surplus is the most current normalized swap rate with a five-year maturity One dollar of surplus is committed for each $5.03 of loss and LAE reserves for this line of business. One dollar of surplus is committed for each $2.83 of earned premium for this line of business. Federal Income Tax is charged against investment income, underwriting income, 20% of the change in the unearned premium reserve and the change in the reserve discount a 35% tax rate applies in all instances. The 2014 IRS rate -- 1.79% -- was used to discount reserves. The IRR is determined by "Excess Cash Flows" which equal Operating Income minus the Change in Surplus. A more detailed explanation of each line of the model is provided on the following pages.
1. Written Premium: Annual written premium. 2. Change in UEPR: Change in unearned premium reserve assuming even distribution of writings through the year. 3. Earned Premium: Calculated by assuming an even distribution of writings. 4. Loss & LAE Paid: Line (6) x Line (25). 5. Change in Loss Reserve: Line (6) - Line (4). 6. Losses Incurred: Line (3) x Line (26). 7. Expenses Incurred: Line (1) x Line (27). Expenses are paid & incurred in same year. 8. Residual Market Assessment Paid: Does not apply. 9. Commissions Incurred: Line (1) x Line (28). Commissions are paid & incurred in same year. 10. Underwriting Income: Line (3) - Line (6) - Line (7) - Line (8) - Line (9). 11. Investment Income: {Average of Lines (12), (16), and (17) for current & prior year} x Line (30a) +{Average of Line (18) for current & prior year} x Line (30b). 12. Policyholder Dividends Reserve: Not Applicable. 13. Policyholder Dividends Paid: Not Applicable. 14. Federal Income Tax: 0.35 x {{Line (5) - [Change in Line (20)] + [0.20 x Line (2)] + Line (10) + Line(11)} - {Change in Line (12)} - Line (13)}. 15. Operating Income: Line (10) + Line (11) - Line (12) - Line (13) - Line (14). 16. Unearned Premium Reserve: 50% of written premium for the year (assumes premiums are written equally throughout the year). 17. Loss & LAE Reserve: Inception-to-date total of Line (5). 18. Policyholders' Surplus: {Line (17) / Line (31a) + Line (3) / Line (31b)}.
19. Total Liabilities (including Surplus): Line (12) + Line (16) + Line (17) + Line (18). 20. Tax Basis Reserve: Future paid losses discounted using IRS discount factors. 21. Change in Policyholders' Surplus: Change in Line (18) from prior year. 22a. Excess Cash Flow: Line (15) - Line (21). 22b. Internal Rate Of Return: Rate which causes the net present value of the cash flows in Line (22a) to be equal to 0. 23. Premium Earning Pattern: Assumes that 50% of written premiums are earned in the first year and 50% in the following year. 24. Premium Collection Pattern: Assumes that all premiums are collected in the year written. 25. Loss Payment Pattern: Loss payment patterns based on company data are assumed. 26. Loss and LAE Ratio: Adjusted until target IRR is achieved. 27. Expense Ratio: Provision for general, other acquisition and premium taxes, licenses and fees. 28. Commission Ratio: Provision for commissions. 29. Dividend Ratio: Not Applicable. 30a. Investment Rate on Reserves: Pretax return using duration matched swap rate. 30b. Investment Rate on Surplus: Pretax return using duration matched swap rate. 31a. Reserve-to-Surplus Ratio: Reflects amount of surplus committed to reserves based on historical company averages. 31b. Premium-to-Surplus Ratio: Reflects amount of surplus committed to premium based on historical company averages. 32. Discount Rate: Current IRS discount rate. 33. Tax Rate: Current IRS corporate tax rate. 34. Indicated Profit/Contingency Provision: 100% - Line (26) - Line (27) - Line (28) Line (29).
Calculation of the Profit & Contingency Provision - Other Liability Exhibit 3 Year: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 (1) Written Premium 10,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 (2) Change in UEPR 5,000 (5,000) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 (3) Earned Premium 5,000 5,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 (4) Loss & LAE Paid 45 614 1,252 1,423 1,344 1,014 607 340 264 165 49 24 52 29 26 137 107 (5) Change in Loss Reserve 3,702 3,133 (1,252) (1,423) (1,344) (1,014) (607) (340) (264) (165) (49) (24) (52) (29) (26) (137) (107) (6) Loss & LAE Incurred 3,746 3,746 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 (7) Expenses Paid 1,240 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 (8) Res. Mkt Assmnt Pd 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 (9) Commissions Paid 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 (10) Underwriting Income 14 1,254 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 (11) Investment Income 101 190 149 105 75 50 32 22 16 11 9 8 7 6 6 4 1 (12) Policyholder Div Reserve 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 (13) Policyholder Div Paid 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 (14) Federal Income Tax 488 233 11 (1) (4) (5) (3) (1) (2) (2) 1 1 1 1 1 0 0 (15) Operating Income (374) 1,210 138 106 79 55 35 23 18 13 8 7 7 5 5 3 1 Liabilities (16) Unearned Premium Reserve 5,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 (17) Loss & LAE Reserve 3,702 6,834 5,582 4,159 2,816 1,802 1,195 855 591 425 377 352 300 271 245 107 0 (18) Policyholders' Surplus 2,501 3,124 1,111 828 560 359 238 170 118 85 75 70 60 54 49 21 0 (19) Total Liabilities 11,203 9,959 6,692 4,987 3,376 2,160 1,433 1,025 708 510 452 422 360 325 293 129 0 (20) Tax Basis Reserve 3,421 6,331 5,195 3,880 2,622 1,672 1,105 788 546 397 355 336 289 264 241 106 0 (21) Change in PH Surplus 2,501 623 (2,014) (283) (267) (202) (121) (68) (53) (33) (10) (5) (10) (6) (5) (27) (21) (22a) Excess Cash Flow (2,875) 587 2,152 389 346 256 156 90 70 46 18 12 17 11 10 31 22 (22b) Internal ROR 15.00% (23) Premium Earning Pattern.5000.5000 (24) Premium Collection Pattern 1.0000.0000.0000.0000.0000.0000.0000.0000.0000.0000.0000.0000.0000.0000.0000.0000 (25) Loss Payment Pattern.0120.1518.1825.1973.1614.1093.0526.0382.0323.0118.0013.0052.0088 -.0011.0081.0286 (26) Loss and LAE Ratio: 74.93% (27) Expense Ratio: 12.40% (34) Indicated Profit/Contingency Provision 12.7% (28) Commission Ratio: 0.00% (28.1) Residual Mkt Load: 0.00% (29) Dividend Ratio: 0.00% (30a) Invest Rate on Reserves: 1.80% (30b) Invest Rate on Surplus: 1.80% (31a) Reserve-to-Surplus Ratio 5.03 (31b) Premium-to-Surplus Ratio 2.83 (32) IRS Discount Rate: 1.79% (33) Tax Rate: 35.00%
ZURICH AMERICAN INSURANCE COMPANY Veterinarians Student Professional Liability Program Explanatory Memorandum Zurich American Insurance Company (ZAIC) is filing for a new Veterinarians Student Professional Liability Program, which provides coverage to students who are enrolled in an AVMA listed college of veterinary medicine and a member in good standing of the Student AVMA Professional Liability Insurance Trust Purchasing group. The existing standard Vet policy covers students who are supervised by a veterinarian who is a member of the AVMA and is insured with Zurich. This policy will be offered to all students who are members of the AVMA, regardless of whether or not the Vet is a member of the AVMA or is insured with Zurich. Our intent to give student veterinarians a choice between purchasing their own stand-alone policy or being added to an existing Zurich policy by way of endorsement. Under an existing Veterinarians Professional Liability Program, student coverage can be purchased by endorsement for a charge of $10 per student. The limits that apply are those of the supervising veterinarian. The average limit is approximately 1M/3M for the students; so therefore, we propose a $10 per student charge for a limit of 1M/3M in the new Veterinarians Student Professional Liability Program. In addition, we are including a 2M/2M limits with a proposed $11 charge per student. This is based off Insurance Service Office (ISO) increased limits factors. We respectfully request the soonest possible effective date.