1 Robert Lindquist- President Lindquist and Associates Casualty Actuarial Society Ratemaking Seminar...

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 Robert Lindquist- President

Lindquist and Associates 

• Casualty Actuarial Society

• Ratemaking Seminar

• March 7-8 2002 Tampa Fla.

• Regulatory Topic #37

• Rate Filing Requirements

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• Property and Casualty Rates

• From Florida Perspective

• Rates/Rules/Forms/

Underwriting Guide

• Personal Property- H.O., M.H.O., D.F.

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Structure/Environment

• Insurance Commissioner- Currently Elected. Also Treasurer, State Fire Marshall, Cabinet.

– Future, merged with Comptroller. Head will be State Chief Financial Officer

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• Major Companies/Results

– See Attached- MRKT Share by Line, L/R Results, Complaint Ratio

– DI4-308- Attached, Direct Profit/Loss Statement by Line Detailed

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Structure/Environment

• F.I.C.- Lobbying, Rade Musulin

• F.H.C.F.- Florida Hurricane Catastrophe Fund– Personal Property, Commercial

Residential– 90%, 75%, 45%– Cov. A+B+C, D?– Payout 1 out of 7 yrs.– Andy Rappaport– Jack Nicholson

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• Primary Statutes

1.  Personal Automobile-

627.0651 F.S.

2.  Workers Compensation-

627.072 F.S.

3.  All Other- 627.062 F.S.

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• 627.062 F.S.- Rate Standards

- Accepted Actuarial Techniques

- 90 day Deemer

- Components

- File/Use or Use/File

- Excessive/Inadequate/Unfairly

Discriminatory

- Catastrophe

- Underwriting Expenses

- Indications, 5 yrs. Cal./Acc. Yr. data

- Recourse (s)

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• Supporting Statutes

- 627.0628; F.H.C.F., Use of Models

-  627.0629; Construction; 3/03

-         ; Building Code

-         ; Separate Hurricane /Non-Hurr.

Rates

-  627.0654; Sprinkler Credits

-  627.701 ; Hurricane Deductibles

-  627.0645; Annual Rate Filings

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Supporting Ad. Rules

• 4-170.013- Filing Procedures

• 4-170.006- Rate Manual Filings

• 4-170.007- Annual Rate Filings

• 4-170.003- Investment Income

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Supporting Ad. Rules- Cont.

• 4-170.014 - Homeowners Rate Making

(Attached)

- Direct

- Fla. Data

- # Filing Copies

- Applicable Forms

- Indications vs. Support

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• Filing Format

-         3 copies to the Fla. D.O.I.

-         Cover page Memo/Shirley

Kerns

Bureau Chief

-         Consultant, Letter of Authorization

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• Filing Forms

DI4-582 (Basic)

• Separate coverage forms from Rules/Rates/U.W.

• One (1) Line per filing.

• File/Use or Use/File

• Proposed Effective date(s)– 45 days Renewal

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• Filing Forms- cont.

DI4-583; Use for adoption of

I.S.O. Loss Costs (Not Rules)

; Calculation of Deviation

; Calculation of L.C.M.

; Minimum

Premium/Return Premium

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• Filing Forms- cont.

DI4-585-Certification

DI4-586-Annual Rate Filing Certification

DI4-584-Exemption to Annual Rate Filing

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• Filing Forms- cont.

DI4-595

- Expense Supplement for Independent Filings       

- E.L.R.

- U.W. profit

- Net cost of reinsurance

- Private

- F.H.C.F.

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• Detailed Filing Memorandum

Summarize Indexed Filing Material.

Cross Reference Exhibits

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• Indexed Filing Material (i.e.)

-         Indications

-         I.B.N.R. Factors

-        Catastrophe Factor(s) Development

-         Rate Comparisons (Attached)

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• Indexed Filing Material – cont.

-         Other filings “me too”

-         U.L.A.E. Support (Sch. P.)

-         Support for C.R.L.

-         Support for Premium Trend and Loss Trend (Fast

Track?)

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• Indexed Filing Material- cont.

-         New Manual Pages

(Highlight)

-         Non- F.H.C.F. Reinsurance Agreements

-         M.G.A. Agreement

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• Indexed Filing Material- cont.

- DI4-1102, Rating Example by county Split

Hurricane/Non-Hurr.

- DI4-1103, Summary of overall % change by

Form

- DI4-1104, By Form by County % change

(Example)

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• Indexed Filing Material- cont.

- If applicable the F.I.G.A. Recoupment (Invoice, check)

- 7 Exhibits on Credits, Exhibit 7* “Cat Factor consistent with Ex Wind credits”

*- 1÷ (1-Ex Wind % Credit/

Load)= Cat Factor

Ex Wind Cat Factor= 1.00

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• Computer Disks

Homeowners (H.R.C.S.) Dwelling (D.R.C.S.)

Automobile (A.R.C.S.)

Mobile Home (M.R.C.S.)

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• Some Frequently asked Questions

- F.H.C.F. is tax exempt

- Credibility Formula,Consistency

- Complement of Credibility (95’ Joe Boor)

- Support of credits that are not I.S.O.

- Modeling, Black Box

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• Some Key D.O.I. Employees 

Area Code 850

• Shirley Kerns - 413-5310

• Richard Koon - 413-5346

• Ken Ritzenthaler- 413-5314

• Vern Ivarson - 413-5366

• Tim Bazer - 413-5378

• Kay Cleary - 413-5254

• Jack Swisher - 413-5344

• Srinivasa Ramanujam-413-5354

• Bill Bodiford - 413-5352

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• Tim Rundle - 413-5318

• Howard Eaglefeld- 413-5319

• Doug Haseltine- 413-5330

• Jim Watford - 413-5368

• Jack Nicholson (F.H.C.F.)-

413-1340