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

Robert Lindquist- President Lindquist and Associates Casualty Actuarial Society Ratemaking Seminar March 7-8 2002 Tampa Fla. Regulatory Topic #37 Rate Filing Requirements. Property and Casualty Rates From Florida Perspective Rates/Rules/Forms/ Underwriting Guide

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

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  1. Robert Lindquist- President Lindquist and Associates • Casualty Actuarial Society • Ratemaking Seminar • March 7-8 2002 Tampa Fla. • Regulatory Topic #37 • Rate Filing Requirements

  2. Property and Casualty Rates • From Florida Perspective • Rates/Rules/Forms/ Underwriting Guide • Personal Property- H.O., M.H.O., D.F.

  3. Structure/Environment • Insurance Commissioner- Currently Elected. Also Treasurer, State Fire Marshall, Cabinet. • Future, merged with Comptroller. Head will be State Chief Financial Officer

  4. Major Companies/Results • See Attached- MRKT Share by Line, L/R Results, Complaint Ratio • DI4-308- Attached, Direct Profit/Loss Statement by Line Detailed

  5. 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

  6. Primary Statutes 1.  Personal Automobile- 627.0651 F.S. 2.  Workers Compensation- 627.072 F.S. 3.  All Other- 627.062 F.S.

  7. 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)

  8. 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

  9. 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

  10. Supporting Ad. Rules- Cont. • 4-170.014 - Homeowners Rate Making (Attached) - Direct - Fla. Data - # Filing Copies - Applicable Forms - Indications vs. Support

  11. Filing Format -         3 copies to the Fla. D.O.I. -         Cover page Memo/Shirley Kerns Bureau Chief -         Consultant, Letter of Authorization

  12. 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

  13. 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

  14. Filing Forms- cont. DI4-585-Certification DI4-586-Annual Rate Filing Certification DI4-584-Exemption to Annual Rate Filing

  15. 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.

  16. Detailed Filing Memorandum Summarize Indexed Filing Material. Cross Reference Exhibits

  17. Indexed Filing Material (i.e.) -         Indications -         I.B.N.R. Factors -        Catastrophe Factor(s) Development -         Rate Comparisons (Attached)

  18. 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?)

  19. Indexed Filing Material- cont. -         New Manual Pages (Highlight) -         Non- F.H.C.F. Reinsurance Agreements -         M.G.A. Agreement

  20. 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)

  21. 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

  22. Computer Disks Homeowners (H.R.C.S.) Dwelling (D.R.C.S.) Automobile (A.R.C.S.) Mobile Home (M.R.C.S.)

  23. 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

  24. 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

  25. Tim Rundle - 413-5318 • Howard Eaglefeld- 413-5319 • Doug Haseltine- 413-5330 • Jim Watford - 413-5368 • Jack Nicholson (F.H.C.F.)- 413-1340

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