Rate Filing Best Practices Alaska

1
Rate Filing Best Practices Alaska

• Sarah McNair-Grove, FCAS, MAAA
• Actuary
• Alaska Division of Insurance

2
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

3
Complete

• Filing method identified
• Flex rate
• File and use
• Prior approval
• Revisions or replacements
• Prior state identification number
• Marked copy showing revisions

4
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• Withdrawn or disapproved state identification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

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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/bulletin
s/96-05.htm
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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

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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

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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

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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

10
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)

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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

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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

13
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

14
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

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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