4/2/2021 Rate/Rule Filing Checklist Drafting Group Summary

4/2/2021 Rate/Rule Filing Checklist Drafting Group Summary (WebEx link in this section)

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4/2 CALL OF THE RATE FORM CHECKLIST DRAFTING GROUP

• Kansas Checklist: o Geared toward information they were missing from objections and having to go back to

insurers to ask them to provide o This checklist is a requirement of the general instructions in Kansas o When an insurer makes a filing in Kansas, if they do not have all the information on the

checklist, the filing will be rejected o Requirements

All rate information must be completed on the rate/rule tab without capping All proposed rate/rule manual pages must be submitted under the rate/rule

schedule tab for approval Complete rate/rule manual with all proposed changes must be submitted under

supporting documents tab as this will be marked informational only. A complete manual should consist of all corresponding rules for optional forms, all rules corresponding to your rating factors, all rating factors, territory definitions and factors, and all proposed changes to rates and rules

• Kansas has issues getting an entire manual, so this piece takes care of that issue.

Provide a histogram on an uncapped basis. (If the filing contains more than 1 company, please provide a separate histogram for each company)

• Kansas does what they call an extraordinary memo to their consumer assistance division.

• The extraordinary memo is done for the top 30 writers in the state of Kansas for their consumer assistance division. A lot of detail is sent so there is information available if a consumer calls with a complaint.

• The histograms help in the extraordinary memo Provide the characteristics of the insured(s) receiving the maximum rate increase. (If

the filing contains more than 1 company, please provide a separate histogram for each company)

• The insurer must provide quite a bit of detail. So, if one particular policyholder is getting a 230% increase, the insurer needs to provide quite a bit of detail about what is specifically happening regarding this policyholder.

• This information is provided to the consumer assistance division. Provide the average dollar change, the maximum dollar change and minimum dollar

change on an uncapped basis. (If the filing contains more than 1 company, please provide a separate histogram for each company)

• This information is provided to the consumer assistance division. Please provide our department with a talking points sheet that will assist our

consumer assistance division should we receive consumer complaints regarding the rate increase. This submission should provide detailed information that we can share with policyholders that will explain what is causing this rate increase

• The DOI does not alter the information received in any way • Insurers provide a pretty good narrative

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Please provide us with the breakdown of the permissible loss ratio by coverage including:

• Taxes, licenses and fees • Total production expense • Underwriting profit • Any other fees that comprise the permissible loss ratio • Permissible loss ratio

o Kansas had a lot of problems getting a specific breakdown of the permissible loss ratio; insurers were not all giving the same type of breakout. So the DOI came up with a standard format for insurers to use.

Provide all support and justification exhibits for rate change including how you derived your overall indication, all support for proposed factor changes, etc.

• This was more information the DOI was not getting Provide the percentage breakdown of the rate impact per line of coverage. (If the

filing contains more than 1 company, please provide a separate histogram for each company)(***Only required for personal auto rate filings)

Please complete all checkboxes on this form or your filing will be returned “Rejected,” and a resubmission may be necessary

• The checklist has overall been a great tool and made things more efficient • The extraordinary memo is done only for personal lines; it is not done for commercial lines • The checklist is used for most rate/rule filings • If there is policyholder rate impact it is extremely helpful to get the information the DOI needs to

make sure that the rate increases are justified as well as to be sure they have the proper support and justification for factor changes, as well as anything that is being introduced in the filing. If there is a new rating variable, or some other change, the DOI can make sure that it is justified. If the information is the introduction of a new rating variable the examiner has not seen before, or a new generalized linear model, or predictive model, it will likely be sent to an outside actuary.

• Insurers fill out the information in the same general format – and it stays fairly consistent now that it has been in place for a while

• Need to decide the goal of the checklist this drafting group will be working on • Connecticut will discuss their checklists on next call • Other states should feel free to share their rate/rule filing checklists if they are using them

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Questions:

Angie Nelson – is this information publicly available on SERFF?

Answer: Yes

Lisa Brown – Does Kansas feel like the talking points received from the insurer helpful and does it cause less complaints?

Answer: Yes, it has reduced complaints. There was a lack of understanding in the consumer assistance division, as they do not work in the rating environment. The talking points provided by the insurers have really helped in the education arena too.

Angie Nelson: Is what Kansas has required in terms of talking points addressed the issue of credit scoring complaints? In many cases, when an insurer is revising the bands of their credit scores for tiering and are required by law to send out that notice, do these talking points help with those complaints? Or do the talking points just help more with ordinary rate increases.

Answer: Credit score cannot change the rate by itself, so it is more the underlying rate factors in a filing.

Angie Nelson: How much of a talking point does an insurer send when they filing a new model and there is rate disruption?

Answer: Kansas has not had a lot of model refreshes come in, but they are starting to get more of them and are in the process of trying to figure this out. They are working with some of their consulting actuaries on these issues. They provide information regarding what factors are changing, what factors are added, what the model is doing differently, how it is re-segmenting risks and how that’s causing rate disruption for policyholders that are in their current book of business. Some insurers will roll out a new model that only affects new business. The same thing is done if it is an all new model or a new line of business is being written.

Charles Angell – Are the histograms uncapped only or do you get capped histograms too. Is the insurer providing information regarding their capping rule?

Answer: Kansas asks for an uncapped basis, as they had a market conduct issue come up. A company was providing capped histograms and it was discovered through a consumer complaint. So now they ask for an uncapped basis. There are times when Kansas will go back to the insurer and ask for a capped histogram too, if necessary.

Charles Angell: Alabama required both a capped and uncapped histogram to see how consumers were affected by an insurer’s capping rule.

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Answer: Examiners sometimes ask for a capped histogram and ask for more information on their capping rules. Also ask how many renewal periods it will take for the capping to be realized.

Charles Angell: Possible inclusion of capped histograms in a uniform checklist.

WEBEX Link for meeting recording:

https://naic.webex.com/naic/ldr.php?RCID=d4e98e51efd3408ab342eba9fc344930

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https://naic.webex.com/naic/ldr.php?RCID=d4e98e51efd3408ab342eba9fc344930

Kansas Rate/Rule Filing Checklist

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1. All rate information must be completed on the rate/rule tab without capping.

2. All proposed rate/rule manual pages must be submitted under the rate/rule schedule tab for approval.

3. Complete rate/rule manual with all proposed changes must be submitted under supporting documents tab as this will be marked informational only. A complete manual should consist of all corresponding rules for your optional forms, all rules corresponding to your rating factors, all rating factors, territory definitions and factors, and all proposed changes to rules and rates.

4. Provide a histogram on an uncapped basis. (If the filing contains more than 1 company, please

provide a separate histogram for each company)

5. Provide the characteristics of the insured(s) receiving the maximum rate increase. (If the filing contains more than 1 company, please provide a separate histogram for each company)

6. Provide the average dollar change, the maximum dollar change and minimum dollar change on an

uncapped basis. (If the filing contains more than 1 company, please provide a separate histogram for each company)

7. Please provide our department with a talking points sheet that will assist our consumer assistance

division should we receive consumer complaints regarding the rate increase. This submission should provide detailed information that we can share with policyholders that will explain what is causing this rate increase.

8. Please provide us with the breakdown of the permissible loss ratio by coverage including:

1) Taxes, licenses and fees 2) Total production expense 3) Underwriting profit 4) Any other fees that comprise the permissible loss ratio 5) Permissible loss ratio

9. Provide all support and justification exhibits for rate change including how you derived your overall

indication, all support for proposed factor changes, etc.

10. Provide the percentage breakdown of the rate impact per line of coverage. (If the filing contains more than 1 company, please provide a separate histogram for each company) (***Only required for personal auto rate filings)

11. Please complete all check boxes on this form or your filing may be returned “Rejected”, and a resubmission may be necessary.

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Connecticut Personal Lines Auto Rate Filing Checklist

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http://www.ct.gov/cid PL Auto R&R (12/2020) Page 1 of 3

CONNECTICUT INSURANCE DEPARTMENT PERSONAL LINES AUTOMOBILE

RATES FILING CHECKLIST

COMPANY Co. File No. TYPE OF INSURANCE Instructions: All items on the checklist must be answered as instructed or the filing will be rejected per CT Bulletin PC-82. Responses in the shaded area indicate non-compliance with applicable Connecticut General Statutes, regulations or rules. Complete the Form, Page and Paragraph numbers to indicate where compliance can be found in the document/s. If not applicable, enter NA in this column and explain why in the blank space at the end of the checklist.

I. RATE PROVISIONS (See CT Bulletin PC-36)Form/Page/Para

Reference a. An exhibit showing indicated and adopted statewide rate level changes

as a percentage of current rates for each program by coverage included? Show changes for (a) variable rate, (b) flattened expense fee, and (c) total rate. See Bulletin PC-68 (Appendix 2).

YES NO Form Page Para

b. An exhibit showing adopted rate level changes for each territory by coverage as percentages of current rates. Combine the effect of the variable rate portion and the flattened expense fee portion. See Bulletin PC-68 (Appendix 3) .

YES NO Form Page

Para

c. Exhibits showing the company's statewide rate change indications broken down by accident year and coverage, are required. These exhibits may be in a format adapted to the company's own rate review process as long as they contain proper adjustments to the loss experience.


d. An Exhibit reflecting at least 90% of general and other acquisition expense and 100% of miscellaneous licenses, taxes and fees are reflected in the base rates as flat dollar amounts for all territories. See Bulletin PC-68


e. Exhibits with individual territorial loss cost data has been moderated with reference to statewide average loss costs by weighting the territorial indications with the statewide average 75% / 25%? See Bulletin PC-68


f. An exhibit showing the premium dollar breakdown, identifying variable and flattened expense portions. Include the calculation of the fixed expense fee by coverage to be applied to the base rates after classification factors are applied. See Bulletin PC-68 (Appendices 4 and 4A).


g. An exhibit showing investment income as a factor of the rates, how it was calculated and an explanation of how it was taken into consideration in the calculation of the newly filed rates. See Bulletin PC-68

YES NO Form Page

Para

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h. An exhibit showing, by coverage, the annual trend factors used and the combined effect of these factors on each year of experience used in the filing. See Bulletin PC-68 (Appendix 5).

YES NO Form Page

Para i. An exhibit showing, by coverage, the data used to compute the loss

development factors used for each year of experience in the filing. YES NO Form

Page

Para j. Is a General Linear Model is being used? If “YES", Please provide the

SERFF filing number - If it is being used and a filing has NOT been provided, please complete the GLM checklist also listed in SERFF.


k. If a GLM is being used, have there been any changes since its approval? If so, please provide the SERFF file number.


l. An exhibit showing the rate order of calculation for individual premium determination.


II. Territorial Rating in Connecticuta. Does your system identify the zip code of the place of garaging versus

that of mailing address? YES NO Form

Page Para

b. Does your system account for changes in zip codes as they occur? YES NO Form Page Para

c. Is a table of each zip code and its corresponding rate territories attached?


d. Are towns or cities split into two territories? YES NO Form Page Para

e. Is each territory composed of one or more unique town codes? YES NO Form Page Para

f. Do you have a rule that states if a street divides two rating territories or towns the rate used must be that of the lower of the two territories?


g. Is an alphabetical list of the CT 169 towns with territory codes included?


III. Filing Requirementsa. Does the filing include side-by-side comparisons for the rule revisions? YES NO Form

Page Para

b. Is the Actuarial memorandum included? YES NO Form Page Para

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c. Has the Rate/Rule schedule been completed? YES NO Form Page Para

d. Has the Property Casualty Actuarial Checklist been reviewed and completed by your Actuarial Department?


e. Is there a related SERFF filing number? If YES, please list the tracking number(s) below.


f. Filing Updates. An insurer, rating organization or advisory organization shall file with the Department updated territorial indications and relativities for each of its private passenger no fleet automobile territorial rating plans at least once every three years following its initial or amended rate filing submitted on or after July 1, 2012. Regulation Sec. 38a-686-2. Has this been submitted?


g. Are Price optimization methodologies including elasticity of demand used to determine premiums in this filing? Please see Bulletin PC-81


h. Are there any homeowner related rating factors, besides the Account credit, being used? If so, please explain.


IV. SUPPLEMENTAL QUESTIONS*All scenarios utilizing Artificial Intelligence (AI) or machine learning that determines cancellation, declination ornonrenewal cannot be used unless each reason is filed with the Department.*The company should be able to provide evidence the AI/machine learning has been vetted thoroughly and that itdoes not contain any biases or proxy discrimination.a. Does this filing utilize Artificial Intelligence (AI) or machine learning in

the development of or the classification of the rate or tier? If yes, please provide a description of how the company is using it.

YES NO Form Page

Para b. Does the company use Artificial Intelligence (AI) or machine learning in

risk selection, tiering, or program eligibility? If yes, please provide a description of how the company is using it.

YES NO Form Page

Para c. Is the company using a vendor or is it developed internally? If using a

vendor, please provide the vendor contact information. YES NO Form

Page

Para

SERFF or State Tracking # for any/all related filings: Please explain any NO or N/A responses below in detail:

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Connecticut Personal Lines Homeowners Rate Filing Checklist

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Page 1 of 3 Ed. Date 12/2020

PERSONAL LINES HOMEOWNER RATE CHECKLIST

Instructions

Please confirm compliance with all the following items in Column A by completing shaded cells in columns C, and D where applicable. Blank boxes in the shaded area (Column C) indicate non-compliance with applicable Connecticut General Statutes, regulations, or Department positions. Blank boxes in Column C will cause the filing to be rejected per CT Bulletin PC-62. This checklist must be completed with every rate filing. If the checklist does not apply, be sure to explain exactly why in the notes. Complete the Form, Page and Paragraph numbers (Column D) to indicate where compliance can be found in the filed document/s. If items in Column A are not applicable, enter NA in column C and explain in detail in the blank space at the end of the checklist.

NOTE: If rating impacts underwriting guidelines or the rules, please complete both the Homeowner Underwriting Guideline checklist and the Homeowner Rules checklist.

Please review and answer the Supplemental Questions section at the end of this checklist. This section must be completed for every rate filing or the company must provide the state tracking number of the filing in which the information was previously provided. If this information is not provided, the filing will be rejected without review.

A B C D Item Department Reference

(Law/Reg/Department Position)

Confirm compliance with item in Column A

by inserting an “X” here

Provide Form/Page/Para Reference

FLEX RATING PROVISIONS CGS §38a-688a That the overall statewide rate change does not result in an increase or decrease of more than 6%

Only one flex rate filing may be made within a 12 month period unless the combination of all rate filings made in the preceding 12 months (flex and non-flex) does not result, in a multiplicative cumulative increase or decrease of more than 6%.

That all rate changes are made during the twelve-month period preceding this filing That the rate filing does not include changes to class definitions, rating rules or rating model variables

That the company has used “Flex Rate” as the filing type in SERFF

A flex rate filing must use the “flex rate” filing type or the filing will be rejected

RATE FILING PROVISIONS

That the company provided a rate profiles exhibit (in both .pdf and Excel

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format) if there is a statewide base rate homeowner rate change That the filing includes the effective dates for new business and renewals That the rate filing includes rate impacts by policy form That the company filed underwriting guidelines that clearly delineate which risks are acceptable for each tier at new business and renewal if different rating tiers are used to rate business That the annual inflation increase does not exceed 8%.

8% is the maximum annual inflation permitted by the state

MODELS That the use of a General Linear Model (GLM) complies with the following: The GLM checklist is fully completed if this rate filing introduces a GLM

If a GLM is currently in use, the company has included the SERFF state tracking number of the original GLM filing The company has filed any changes to the GLM since its original approval

Please provide the SERFF state tracking number(s).

The GLM checklist is fully completed if this rate filing includes any revisions to the current GLM(s) in use

FINANCIAL HISTORY PROGRAMS FOR PERSONAL RISK INSURANCE (Use of Credit Score or Financial Stability) That this filing includes an exhibit with all score ranges included That the financial measurement program is included in this filing if not previously filed. That the company does not rate policies using financial history (score) in combination with specific credit information (bankruptcy, foreclosure, liens, repossessions, court judgments).

That the rates do not penalize the insured for having no credit history (no hit or no score).

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That the underwriting criteria has been filed to identify risk placement in HO programs (tiers) or rating impact for insureds with no credit history Provide SERFF filing number

MISCELLANEOUS FILING REQUIREMENTS Confirm that the filing includes all of the following:

A detailed summary of the of the filing in the General Information tab or via an Explanatory Memorandum in the Supporting Documentation tab

A detailed side by side comparison illustrating all revisions to current rates and manual rules (if applicable)

An Actuarial Memorandum Required on all rate filings

Please provide a detailed explanation for any highlighted for all N/A responses below: Supplemental Questions – to be answered on every Rate filing: 1.Does this Form filing utilize artificial intelligence (AI) or machine learning in the development of or determination of policy forms? 2.Does the company use Artificial Intelligence (AI) or machine learning in determining coverage or exclusion selection? 3.If yes was answered to questions 1 and/or 2, please provide a description of how the company is using AI or machine learning in a separate document. 4.Is the company using a vendor or is it developed internally? If using a vendor, please provide the vendor contact information. The company should be able to provide evidence the AI/machine learning has been vetted thoroughly and that it does not contain any biases or proxy discrimination.

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Connecticut Actuarial Checklists

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CT Insurance Department – Property Casualty Actuarial Checklist Personal Lines – Auto/ Homeowners/ Dwelling Fire & Extended Coverage/ Personal Umbrella

and other lines of business as appropriate or deemed necessary by the Department

Page 1 Actuarial Checklist December 2020

Instructions for Sections A - C: • Please complete in its entirety. Desired answers are YES. For NO answers, please list Section with Item number and

explain in Notes Section of the checklist. If Not Applicable (N/A) is selected, provide explanation as necessary.• It is expected that actuarial exhibits will follow Actuarial Standards of Practice as promulgated by the American

Academy of Actuaries. Actuarial documentation is expected to include actuarial memo/narrative to explain themethodology together with comprehensive technical exhibits annotated with accurate formulas and footnotes.

• Please contact [email protected] Susan Gozzo Andrews, FCAS, MAAA, RPLU+, PIR if you have anyactuarial questions.

SECTION A: Rate Level Indications YES NO;

Requires explanation

N/A

1. Actuarial Memo – described the actuarial methodology and exhibits

2. Rate Level Indication Exhibits - provided as appropriate to filing:a. Statewide Total Indication Exhibit/chart to match Rate/Rule tabb. Statewide by Form (HO); by Coverage (Auto)

c. HO - By peril indications, if rates/rating factors are changing by perild. Auto - Appendix 2 by coverage completed and matches Rate/Rule tab

3. Premium Adjustmentsa. Showed on-level factors for parallelogram method with rate change history

shown; or stated in Actuarial Memo that “extension of exposures”/re-ratingat current rates method was used.

b. Premium Trend - included source of selected annual trend, trend period forhistorical and prospective trend periods, calculated trend factors

4. Loss Adjustmentsa. Loss Development Factors – showed source of selected factorsb. Loss Trend – included source of selected annual trend, trend period for

historical and prospective trend periods, calculated trend factorsc. Auto Loss Trend – Appendix 5 was completed which matches the trend

exhibitsd. Documentation has been provided to support the selection of Ultimate

Losses if other than the development methodology has been used.e. Ultimate Losses have not been discounted. Investment Income on

reserves is to be reflected as an offset to Underwriting Profit per ourStatutes.

5. Loss Loads - Provided support that includes both a narrative and exhibits toshow the derivation of all the selected factors including:

a. Large Loss and Excess Loss ratios/loadsb. Catastrophes – internal data and/or modeled data.

Note: If using AIR/RMS, included short paragraph about the parametersselected for the model (i.e. model version, Demand on/off status), and showedany trending (with support for trend factors for use in the filing.

c. Adjusting Other Expense and/or Defense Cost Containment Expense - athree year history based on CT experience was shown to supportselected percentages.

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mailto:[email protected]




SECTION A: Rate Level Indications - continued YESNO;


N/A

6. Reinsurance Costs and Net Retained Risk amountsa. A narrative was provided to explain sources for these amounts and how

these items are treated in the indications; i.e., as loss componentsand/or expense loads.

b. Exhibits were provided to show derivation of the numbers selected foruse in the indication.

7. Expensesa. Provided a three year history based on CT experience to support

selections; provided an explanation if other than CT experience was usedfor selected expense support.

b. An expense summary was included to show expenses split by fixed andvariable expenses which ties to numbers used in the Indication pages.

c. Permissible Loss Ratios used in the indications have been derived on theexpense summary exhibit.

d. Auto filing included Expense flattening exhibit per Bulletin PC-68Appendix 4A.

e. If fixed expense trend was used, both the source of the expense trendand the trending time period were provided.

f. Support is shown for the development of Expense Fees that are changingshowing current, indicated, selected and % change.

8. Underwriting Profit/Contingenciesa. Documentation to support these factors is required. The methodology

and factor selection for underwriting profit/contingency factor selectionis discussed in the actuarial memo.

b. For internal rate of return models, the model exhibits showed the targetrate of return assumed in the rate level indication.

c. In accordance with CT Statutes, investment income has been reflected asan offset to underwriting profit.

9. Credibility and Complement of Credibilitya. Credibility standard is discussed and shown in narrative/exhibits.b. Calculation of credibility for each use in the filing is shown; indications,

territories, trends, cat loads, etc.c. Complement of Credibility methodology is discussed.d. Complement of Credibility derivation is shown with sources of

information used in the calculation included.10. Indication Formulas to show the mathematics

a. Weights for the Accident Year experience and formula to derive theweighted average was provided.

b. Formulas to show all the components of the Indication; i.e., Non-CAT,CAT, fixed expense and fixed expense trending are clearly labeled.

c. Exact formulas to show derivation of the resulting indications areincluded in a comprehensible and readable presentation.

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SECTION A: Rate Level Indications - continued YESNO;


N/A

11. Territorial Indications – for territorial base rates or relativity factorsa. For Auto – indications have been provided as outlined in Bulletin PC-68,

utilizing 75% of territory experience and 25% of the statewide experienceindication.

b. Territorial exhibits show current rate/factor, indicated, selected and %change.

c. The actuarial memo provides explanation of the territorial methodology.12. Base Rates

a. Base rate exhibits show current rate/factor, indicated, selected and %change.

b. The actuarial memo provides explanation of how base rates were derivedor selected.

Section B: Rates/Rating Factor Changes Support and Impacts YES NO;


N/A 1. Red-line Rate Pages – Red-line pages, or Side-by-Side exhibits have been

provided for all rates and rating factor changes.2. Histograms by percent change and dollar amount change were provided if

any individual’s impact would be greater than 10%.3. Filing Memo - memo to explain what changes are taking place.

a. The filing memo provided a narrative to explain all rates and rating factorsincluding expense fees, minimum premium changes, rating algorithmsand capping that are changing.

b. The filing memo or actuarial memo discussed the methodology or processfor each changing element to arrive at the selected rates/factors.

4. Exhibit to show Roll-up of all changes:A premium impact chart has been provided with includes separate rows foreach changed rating element beginning with the Base Rate to show theimpact of each factor to arrive at the overall impact of the change shown inthe Rate/Rule tab.Note: This needs to be done by Form/Peril & total for HO; by Coverage andtotal for Auto; and to match the Rate/Rule tab for all other lines of business.

5. Support is needed for all rates/rating factor and elements that arechanging. It is not enough to discuss changes in the memo, and show onlyproposed rates/rating factors as new pages.a. Exhibits with current, indicated and selected rates/rating factors with %

change need to be shown for each changed element.b. Rating elements from GLM output - Exhibits to show the indications for

each set of rating factors from the models together with the current andproposed factors have been provided. Specific explanation when themodel results are not selected was provided.

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Section B: Rates/Rating Factor Changes Support and Impacts - cont’d YESNO;


N/A

5. Support is needed for all rates/rating factor and elements that arechanging. It is not enough to discuss changes in the memo, and show onlyproposed rates/rating factors as new pages. - continuedc. Support for selected factors using competitor’s information - SERFF

tracking number/State tracking number for the competitor’s filing thatyou are showing rates/rating factors from was provided.Note 1: We do not mean the competitor’s latest filing, but the filing whichactually shows the factors being cited with page number references from thefiling.Note 2: We cannot allow market basket competitor comparisons from ratequoter organizations to support your changes. While we understand that the company may be using this to decide to make a change, we need to seeexhibits with each competitor rates/rating elements as support for therates/factors that have been selected.

d. Support using ISO loss costs/relativities - SERFF Tracking Number/StateTracking numbers and page references were provided.

Note: We cannot accept ISO circulars as the Department does not haveaccess to ISO circulars. The ISO circulars include the SERFF filing numbers andthis is what must be provided.

e. Support for changing LCM (Lost Cost Multipliers) – Exhibits and narrativehas been provided to explain the LCM changes.Note 1: For LCMs, this includes a comparison of the proposed and currentLCMs total broken out by the “pure LCM” component based on filed expenseratios (1 / (1- total expense ratio)), and the “loss modification factors”.Note 2: Exhibits need to show % changes for the proposed LCMs in totaland separately by “pure LCM” and “loss modification” components.

6. Automatic Rate Increases – Please confirm that there is NO mechanism inyour rating algorithm that included an automatic trend factor that willincrease rates.

Note: All rate changes must be filed with the Department.

7. NEW PROGRAMS or Vastly Overhauled Existing Programs

In addition to Items 1-5 in Section C, support is expected to be providedfor the development of the following including narrative to explain this:• Base Rates, Territory Base Rates, Base Rates by Peril• Expected Expense Exhibit with support for the selection of these ratios.• Minimum premium support• Expense Fee support• Rating algorithm chart

Note: We would encourage a call with the Department to discuss before the company makes such a filing.

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Section C: Models* YES NO;


N/A

1. For all GLMs (Generalized Linear Models) used in this filing including “re-freshes” of a model that is already filed in CT, in addition to the methodologynarrative and exhibits to explain the methodology, the CT GLM Checklist hasbeen submitted.

2. For non-GLM models that your company is using in this filing, narratives ofthe methodology with explanatory exhibits/charts to show the effectivenessof these methods over the current rating plan including a discussion of thedata sources used (both internal company and external data) has beenprovided.

Note 1: We are looking for analogous information for these non-GLM modelsthat we require for GLM models. We would encourage you to adapt ourcurrent GLM checklist as applicable for your non-GLM model for efficiency toassist in our review of your non-GLM model.Note 2: This includes non-GLM models such as multivariate, Gradient BoostedTree, regression and other innovated methodologies by the company.

3. Artificial intelligence (AI) and /or Machine Learning used for rates or ratingfactors in this filing has been described with methodology narrative includingexhibits to explain the methodology.

* Note: We mean Company developed and used models here; we are not asking for AIR, RMS or vendormodels.

• Vendor models (including telematics devices or score models) need to be submitted as separatefilings to the Department.

• If you are using AIR/RMS modeled loss information in your CAT models as your data source, youmust still supply GLM checklist information around your own modelling with this CAT data for yourCAT rates/rating factor for CAT perils.

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Notes Section: Please provide Section number and Item number in addressing your responses.

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Documents

4/2/2021 Rate/Rule Filing Checklist Drafting Group Summary