Rate Filing Best Practices Alaska

Sarah McNair-Grove, FCAS, MAAAActuary

Alaska Division of Insurance

Complete

• Paper Filings – 2 stamped envelopes– 3 copies of transmittal document– One copy of filing material and supporting

documents

• SERFF Filings– State specific fields completed– Previous state tracking number is required

field

Complete

• Filing method identified– Flex rate– File and use– Prior approval

• Revisions or replacements– Prior state identification number– Marked copy showing revisions

Complete

• Resubmission– Withdrawn or disapproved state identification

number– Address all questions raised

• Effective Date

• Regulation 3 AAC 31.200 – 217; 3 AAC 31.225

• Bulletin B05-09

Loss Cost Adjustment Filings

• Include completed Reference Filing Adoption Forms– Bulletin 96-05

• Rate level change calculation should be done correctly

• Support for deviations must be included

http://www.commerce.state.ak.us/insurance/bulletins/96-05.htm

Loss Cost Adjustment Filings

• Rating organization filing that is in effect on effective date of loss cost adjustment filing must be adopted

• 3 AAC 29.220; 3 AAC 29.240; 3 AAC 31.240

Filing Methods – Prior Approval

• Prior approval– Medical malpractice– Workers’ compensation– Assigned risk auto

• 15-day waiting period with a 15-day extension• Response period of 30 days with a 15 day

extension• Failure to respond or submission of an

incomplete response will result in withdrawal of filing

• AS 21.39.041

Filing Methods – Flex Rate

• All lines of business except medical malpractice, workers’ compensation and assigned risk

• Cumulative rate change calculated from effective date to 12 months before effective date is not greater than +/-10%

• Effective date may not be earlier than date received by division

Filing Methods - Flex Rate

• All rate standards apply to flex rate filings including not inadequate, excessive or unfairly discriminatory

• Filing must include – Overall rate level calculation– Expenses including consideration of investment

income– Exhibit showing rate filings effective within 12 months

immediately preceding proposed effective date by company

– Maximum and minimum rate change

Filing Methods – Flex Rate

• Additional supporting information may be requested if needed to determine that filing complies with Alaska law

• Director may issue an order disapproving the filing if it does not comply with Alaska law

• AS 21.39.210; 3 AAC 31.225(c)(3)

Filing Methods – File and Use

• All other rate filings that are not prior approval or eligible for flex rating

• All supplementary rating information, including rule filings – 3 AAC 31.210(3)

• AS 21.39.220

Content

• Support must be sufficient so that director can determine the filing meets Alaska law– Trend– Loss development– Credibility – Expenses – Investment income– Description of methodology used– Alaska specific premium and loss data

Schedule Rating Plans

• Filing must include– Eligibility criteria– Description of each risk characteristic

• Broad categories like Classification Peculiarities are not acceptable

– Range of debits or credits for each risk characteristic

– Total maximum debit or credit– Previous plan must be identified and

withdrawn if a revision is made

Schedule Rating Plans

• Acknowledgment of compliance– Uniform application to all eligible insureds– Apply at each policy renewal– Debit or credit only for risk characteristics

described in plan– Documentation worksheet

• 3 AAC 29.420; 3 AAC 29.430

Other Filings

• “Me-Too” Filings– Demonstrate applicability to filer– Approved in Alaska? Identify approved filing

• (a) Rate Filings– Manual rules describing how rate will be

calculated• Formulas, rating factors, guidelines, risk

characteristics

– Order R94-02