Attention: Joseph Torti III, Deputy Director & Superintendent of Insurance Regulation Division

Transcription

1 SERFF Tracking Number: HRMN State: Rhode Island First Filing Company: Horace Mann Insurance Company,... State Tracking Number: Company Tracking Number: RI H TOI: 04.0 Homeowners Sub-TOI: Owner Occupied Homeowners Product Name: Project Name/Number: RI Homeowners Rate and Rule Filing RI H101511/RI H Filing at a Glance Companies: Horace Mann Insurance Company, Teachers Insurance Company Product Name: RI Homeowners Rate and Rule SERFF Tr Num: HRMN State: Rhode Island Filing TOI: 04.0 Homeowners SERFF Status: Closed-(02) State Tr Num: Approved Sub-TOI: Owner Occupied Homeowners Co Tr Num: RI H State Status: (08) Closed - Approved With Review Filing Type: Rate/Rule Reviewer(s): Candy Casala, CIC, Debra Stein, Ronald Make, Augustine Park Author: Mindy Ballard Disposition Date: 11/08/2011 Date Submitted: 05/23/2011 Disposition Status: (02) Approved Effective Date Requested (New): On Approval Effective Date (New): Effective Date Requested (Renewal): On Approval Effective Date (Renewal): General Information Project Name: RI H Project Number: RI H Reference Organization: N/A Reference Title: N/A Filing Status Changed: 11/08/2011 State Status Changed: 11/08/2011 Created By: Mindy Ballard Corresponding Filing Tracking Number: N/A Filing Description: May 23, 2011 Status of Filing in Domicile: Not Filed Domicile Status Comments: N/A Reference Number: N/A Advisory Org. Circular: N/A Deemer Date: Submitted By: Mindy Ballard Rhode Island Insurance Division Director of the Department of Business Regulation 1511 Pontiac Avenue, Building 69-2 Cranston, RI Attention: Joseph Torti III, Deputy Director & Superintendent of Insurance Regulation Division PDF Pipeline for SERFF Tracking Number HRMN Generated 12/08/ :58 AM

2 SERFF Tracking Number: HRMN State: Rhode Island First Filing Company: Horace Mann Insurance Company,... State Tracking Number: Company Tracking Number: RI H TOI: 04.0 Homeowners Sub-TOI: Owner Occupied Homeowners Product Name: Project Name/Number: RI Homeowners Rate and Rule Filing RI H101511/RI H Re: Horace Mann Insurance Company NAIC # Fein # Teachers Insurance Company NAIC # Fein # Homeowner Program Rate and Rule Filing Company Filing Number: RI H Dear Mr. Torti, Horace Mann Insurance Company and Teachers Insurance Company submit for your review and approval the above noted homeowner rate and rule filing. The overall effect of this filing is +8.6%. It is the judgment of the Actuarial Department as well as of management that these rates are neither excessive, inadequate, nor unfairly discriminatory. The effective date of this filing will be set upon approval. We are proposing an effective date of October 15, 2011 for new and renewal business. If I can be of further service or if additional information is needed, please do not hesitate to call me toll free at option 9, option 3. If you prefer , my address is melinda.ballard@horacemann.com. Thank you for your attention to this matter. Sincerely, Melinda Ballard Implementation Analyst Property and Casualty Division Horace Mann Insurance Company Teachers Insurance Company Company and Contact Filing Contact Information Melinda Ballard, Implementation Analyst ballarm1@mail.horacemann.com 1 Horace Mann Plaza [Phone] 8505 [Ext] Springfield, IL [FAX] Filing Company Information Horace Mann Insurance Company CoCode: State of Domicile: Illinois PDF Pipeline for SERFF Tracking Number HRMN Generated 12/08/ :58 AM

3 SERFF Tracking Number: HRMN State: Rhode Island First Filing Company: Horace Mann Insurance Company,... State Tracking Number: Company Tracking Number: RI H TOI: 04.0 Homeowners Sub-TOI: Owner Occupied Homeowners Product Name: RI Homeowners Rate and Rule Filing Project Name/Number: RI H101511/RI H Horace Mann Plaza Group Code: 300 Company Type: Insurance Company Springfield, IL Group Name: State ID Number: (217) ext. [Phone] FEIN Number: Teachers Insurance Company CoCode: State of Domicile: Illinois 1 Horace Mann Plaza Group Code: 300 Company Type: Insurance Company Springfield, IL Group Name: State ID Number: (217) ext. [Phone] FEIN Number: Filing Fees Fee Required? Yes Fee Amount: $80.00 Retaliatory? No Fee Explanation: Filing fee for HMIC is $ Filing fee for TIC is $ The total filing fee is $ Per Company: Yes COMPANY AMOUNT DATE PROCESSED TRANSACTION # Horace Mann Insurance Company $ /23/ Teachers Insurance Company $ /23/ State Specific This is a rate filing and I have completed the Rate Data fields on the Rate/Rule Schedule (Yes/No).: Yes PDF Pipeline for SERFF Tracking Number HRMN Generated 12/08/ :58 AM

4 SERFF Tracking Number: HRMN State: Rhode Island First Filing Company: Horace Mann Insurance Company,... State Tracking Number: Company Tracking Number: RI H TOI: 04.0 Homeowners Sub-TOI: Owner Occupied Homeowners Product Name: RI Homeowners Rate and Rule Filing Project Name/Number: RI H101511/RI H Correspondence Summary Dispositions Status Created By Created On Date Submitted (02) Approved Candy Casala, CIC 11/08/ /08/2011 Amendments Schedule Schedule Item Name Created By Created On Date Submitted Supporting Document Response to Objection Letter dated 10/11/2011 Mindy Ballard 10/18/ /18/2011 Supporting Document Response to Objection Letter dated 09/12/2011 Mindy Ballard 09/20/ /20/2011 Supporting Document Response to Conference Call on Mindy Ballard 08/22/ /22/2011 Supporting Document Filing Notes Response to Objection Letter dated 06/16/2011 Mindy Ballard 07/01/ /01/2011 Subject Note Type Created By Created On Date Submitted Request for Additional Information Note To Filer Ronald Make 11/03/ /03/2011 Request for additional information Note To Filer Ronald Make 10/11/ /11/2011 Request for Additional Information Note To Filer Ronald Make 09/12/ /12/2011 Request for Teleconference Note To Filer Ronald Make 07/28/ /28/2011 PDF Pipeline for SERFF Tracking Number HRMN Generated 12/08/ :58 AM

5 SERFF Tracking Number: HRMN State: Rhode Island First Filing Company: Horace Mann Insurance Company,... State Tracking Number: Company Tracking Number: RI H TOI: 04.0 Homeowners Sub-TOI: Owner Occupied Homeowners Product Name: Project Name/Number: RI Homeowners Rate and Rule Filing RI H101511/RI H Additional Information Note To Reviewer Mindy Ballard 07/21/ /21/2011 Request for Additional Information Note To Filer Ronald Make 06/16/ /16/2011 Response to Deemers Note To Reviewer Mindy Ballard 05/23/ /23/2011 R I Deemers Note To Filer Candy Casala, CIC 05/23/ /23/2011 PDF Pipeline for SERFF Tracking Number HRMN Generated 12/08/ :58 AM

6 SERFF Tracking Number: HRMN State: Rhode Island First Filing Company: Horace Mann Insurance Company,... State Tracking Number: Company Tracking Number: RI H TOI: 04.0 Homeowners Sub-TOI: Owner Occupied Homeowners Product Name: Project Name/Number: Disposition RI Homeowners Rate and Rule Filing RI H101511/RI H Disposition Date: 11/08/2011 Effective Date (New): Effective Date (Renewal): Status: (02) Approved Comment: Company Name: Overall % Indicated Change: Overall % Rate Impact: Written Premium Change for # of Policy Holders Affected for this Written Premium for this Program: Maximum % Change (where required): Minimum % Change (where required): this Program: Program: Horace Mann Insurance % 8.600% $34, $406, % % Company Teachers Insurance Company % 8.600% $29, $346, % % Overall Rate Information for Multiple Company Filings Overall Percentage Rate Indicated For This Filing % Overall Percentage Rate Impact For This Filing 8.600% Effect of Rate Filing-Written Premium Change For This Program $64,499 Effect of Rate Filing - Number of Policyholders Affected 632 PDF Pipeline for SERFF Tracking Number HRMN Generated 12/08/ :58 AM

7 SERFF Tracking Number: HRMN State: Rhode Island First Filing Company: Horace Mann Insurance Company,... State Tracking Number: Company Tracking Number: RI H TOI: 04.0 Homeowners Sub-TOI: Owner Occupied Homeowners Product Name: RI Homeowners Rate and Rule Filing Project Name/Number: RI H101511/RI H Schedule Schedule Item Schedule Item Status Public Access Supporting Document Actuarial Support- RI Rate Procedural Yes Informational Summary Form Supporting Document Response to Objection Letter dated Yes 06/16/2011 Supporting Document Response to Conference Call on Yes 2011 Supporting Document Response to Objection Letter dated Yes 09/12/2011 Supporting Document Response to Objection Letter dated Yes 10/11/2011 Rate Homeowner Rules Manual Yes Rate Homeowner Rules Manual Yes Rate Homeowner Rules Manual Yes Rate Homeowner Rules Manual Yes Rate Homeowner Rules Manual Yes Rate Homeowner Rules Manual Yes Rate Homeowner State Rate Pages Yes Rate Homeowner State Rate Pages Yes Rate Homeowner State Rate Pages Yes Rate Homeowner State Rate Pages Yes Rate Homeowner State Rate Pages Yes Rate Homeowner State Rate Pages Yes Rate HMIC Premium Pages Yes Rate TIC Premium Pages Yes PDF Pipeline for SERFF Tracking Number HRMN Generated 12/08/ :58 AM

8 SERFF Tracking Number: HRMN State: Rhode Island First Filing Company: Horace Mann Insurance Company,... State Tracking Number: Company Tracking Number: RI H TOI: 04.0 Homeowners Sub-TOI: Owner Occupied Homeowners Product Name: Project Name/Number: Note To Filer RI Homeowners Rate and Rule Filing RI H101511/RI H Created By: Ronald Make on 11/03/ :10 PM Last Edited By: Ronald Make Submitted On: 11/03/ :10 PM Subject: Request for Additional Information Comments: Please provide the largest increase and the number and percentage of policies that will realize an increase of more than 15% based on the amended proposed change. Thank you PDF Pipeline for SERFF Tracking Number HRMN Generated 12/08/ :58 AM

9 SERFF Tracking Number: HRMN State: Rhode Island First Filing Company: Horace Mann Insurance Company,... State Tracking Number: Company Tracking Number: RI H TOI: 04.0 Homeowners Sub-TOI: Owner Occupied Homeowners Product Name: Project Name/Number: Amendment Letter RI Homeowners Rate and Rule Filing RI H101511/RI H Submitted Date: 10/18/2011 Comments: Dear Ron, Good morning. Hope that this finds you well. Attached please find our response to your letter dated October 11, 2011 requesting additional information. If you have any further questions or concerns, please contact me. Have a great day. Mindy Ballard Implementation Analyst Changed Items: Supporting Document Schedule Item Changes: User Added -Name: Response to Objection Letter dated 10/11/2011 Comment: Attached please find our response to the objection letter dated 10/11/2011. Response to objection letter pdf PDF Pipeline for SERFF Tracking Number HRMN Generated 12/08/ :58 AM

10 SERFF Tracking Number: HRMN State: Rhode Island First Filing Company: Horace Mann Insurance Company,... State Tracking Number: Company Tracking Number: RI H TOI: 04.0 Homeowners Sub-TOI: Owner Occupied Homeowners Product Name: Project Name/Number: Note To Filer RI Homeowners Rate and Rule Filing RI H101511/RI H Created By: Ronald Make on 10/11/ :21 AM Last Edited By: Ronald Make Submitted On: 10/11/ :21 AM Subject: Request for additional information Comments: Please see the attached request. PDF Pipeline for SERFF Tracking Number HRMN Generated 12/08/ :58 AM

11 Oliver Wyman Actuarial Consulting, Inc Avenue of the Americas, 29th Floor New York, NY Fax October 11, 2011 VIA SERFF Ms. Melinda Ballard Implementation Analyst Horace Mann Insurance Company 1 Horace Mann Plaza Springfield, IL Subject: Horace Mann Insurance Company Teachers Insurance Company Homeowners Rate Revision SERFF No. HRMN Dear Ms. Ballard: We have reviewed your responses of September 20, 2011 to our inquiries of September 12, 2011, and believe that responses to the attached additional inquiries will assist in our review of this filing. If the company believes another teleconference would be of value, provide dates and times convenient to you. The response to these questions (and proposed teleconference dates/times if desired) should be submitted via SERFF. If any questions should arise concerning the requested information, please call Ms. Candace Casala at the Department of Business Regulation ( ). Sincerely, Theodore J. Zubulake, FCAS, MAAA Ronald P. Make Copy: Candace A. Casala, CIC, Sr. Insurance Rate Analyst, Depart. of Business Regulation g:\mow\rhode island - rhc\rhc 04\rhc04430\requestc doc

12 Page 2 October 11, 2011 Ms. Melinda Ballard Horace Mann Request for Additional Information Horace Mann Insurance Company Teachers Insurance Company Homeowners Rate Revision SERFF No. HRMN Our prior inquiry stated: One indication was calculated, using experience for all policy forms and both companies. Yet the rate level proposal differs by form and company. What support can be provided to justify these differences in rate level changes (ranging from +5.4% to +10.1%)? We do not follow the response to this inquiry. Provide additional support for varying the rate level changes by form and company. a. The response states that Form 4&6 are lower due to the decrease in endorsements HM-31 and 32. Then why isn t HO-3 even lower due to the decrease of coverage A amounts for that form? b. The response also states that Form 7 effects are higher to bring these rates closer to Form 3. Why is it appropriate for Form 7 rate to be close to Form 3? Are the TIC HO-7 rates already close to the TIC HO-3 rates (since the proposed increase for HO-7 is about the same as for HO-3)? 2. Exhibit G, September 20 Response why doesn t the product of the individual changes for Form 4 & 6 combine to the proposed rate level change (for either company)? 3. The company response indicates that the proposed protection class factors are based on those of Allstate. However, we do not see any commonality between the Allstate factors and the proposed factors. Please clarify.

13 SERFF Tracking Number: HRMN State: Rhode Island First Filing Company: Horace Mann Insurance Company,... State Tracking Number: Company Tracking Number: RI H TOI: 04.0 Homeowners Sub-TOI: Owner Occupied Homeowners Product Name: Project Name/Number: Amendment Letter RI Homeowners Rate and Rule Filing RI H101511/RI H Submitted Date: 09/20/2011 Comments: Dear Ron, Attached please find our response to the objection letter dated If you have any further questions or concerns, please don't hesitate to contact me. Have a good day. Mindy Ballard Implementation Analyst Changed Items: Supporting Document Schedule Item Changes: User Added -Name: Response to Objection Letter dated 09/12/2011 Comment: Attached please find our response to the objection letter dated 09/12/2011. Response to objection letter pdf PDF Pipeline for SERFF Tracking Number HRMN Generated 12/08/ :58 AM

14 SERFF Tracking Number: HRMN State: Rhode Island First Filing Company: Horace Mann Insurance Company,... State Tracking Number: Company Tracking Number: RI H TOI: 04.0 Homeowners Sub-TOI: Owner Occupied Homeowners Product Name: Project Name/Number: Note To Filer RI Homeowners Rate and Rule Filing RI H101511/RI H Created By: Ronald Make on 09/12/ :10 AM Last Edited By: Ronald Make Submitted On: 09/12/ :10 AM Subject: Request for Additional Information Comments: Please see the attached request for additional information. PDF Pipeline for SERFF Tracking Number HRMN Generated 12/08/ :58 AM

15 Oliver Wyman Actuarial Consulting, Inc Avenue of the Americas, 29th Floor New York, NY Fax September 12, 2011 VIA SERFF Ms. Melinda Ballard Implementation Analyst Horace Mann Insurance Company 1 Horace Mann Plaza Springfield, IL Subject: Horace Mann Insurance Company Teachers Insurance Company Homeowners Rate Revision SERFF No. HRMN Dear Ms. Ballard: We have reviewed your responses to our teleconference of August 2 and believe that responses to the attached additional inquiries will assist in our review of this filing. If the company believes another teleconference would be of value, provide dates and times convenient to you. The response to these questions (and proposed teleconference dates/times if desired) should be submitted via SERFF. If any questions should arise concerning the requested information, please call Ms. Candace Casala at the Department of Business Regulation ( ). Sincerely, Theodore J. Zubulake, FCAS, MAAA Ronald P. Make Copy: Candace A. Casala, CIC, Sr. Insurance Rate Analyst, Depart. of Business Regulation g:\mow\rhode island - rhc\rhc 04\rhc04430\requestb doc

16 Page 2 September 12, 2011 Ms. Melinda Ballard Horace Mann Request for Additional Information Horace Mann Insurance Company Teachers Insurance Company Homeowners Rate Revision SERFF No. HRMN When was the last time that territorial relativities were revised? 2. One indication was calculated, using experience for all policy forms and both companies. Yet the rate level proposal differs by form and company. What support can be provided to justify these differences in rate level changes (ranging from +5.4% to +10.1%)? 3. Exhibit IV, Page 1 Deductibles: 4. Exhibit VI: a. Confirm that generally the proposed relativities are moving toward those indicated and that indicated decreases are being proposed but indicated increases are being tempered to reduce the impact on policyholders. b. Provide the company s intent regarding implementing further changes to continue moving toward the indicated relativities. c. Explain the exception to 3.a. above regarding the 1% deductible for Coverage A amounts of $250,000 and above (for which the proposed relativities are greater than both the current and indicated). d. For the record, clarify the deductible tables to show which factor is available for the end point of each range shown. e. Show how the rate level impact of the deductible changes, as shown on the Rate Procedural Information Form (item #2), are calculated. Include why there would be a rate level impact of rebasing the HO-4 and HO-6 relativities and eliminating the $250 deductible. If this exhibit is the premium level impact of the proposed changes, revise it to show the rate level changes only. a. Protection Class Relativities Given the different indications by protection class, why is the proposal to continue to use the same relativity for protection classes 2 & 3 and 4 & 5?

17 Page 3 September 12, 2011 Ms. Melinda Ballard Horace Mann b. How were indications derived for those protection class/construction combinations with no exposures? c. Confirm that the column labeled Rebased Relativity in the Teachers Insurance Table section should read Indicated Relativity. d. What other rating characteristics were combined with protection class and the multi-line discount in the GLM model? 5. Response Exhibit D Multi-line Factors - Given that the pure premium relativity for educators is approximately 4% below that of non-educators, why don t educators with a mono-line policy get a lower factor than non-educators? 6. How many condominium policies currently have additions and alterations increased limit coverage?

18 SERFF Tracking Number: HRMN State: Rhode Island First Filing Company: Horace Mann Insurance Company,... State Tracking Number: Company Tracking Number: RI H TOI: 04.0 Homeowners Sub-TOI: Owner Occupied Homeowners Product Name: Project Name/Number: Amendment Letter RI Homeowners Rate and Rule Filing RI H101511/RI H Submitted Date: 08/22/2011 Comments: Dear Ron, Attached please find our response to the conference call which took place on If anything else is needed, please contact me. Have a good day. Mindy Ballard Implementation Analyst Changed Items: Supporting Document Schedule Item Changes: User Added -Name: Response to Conference Call on Comment: Attached please find our response to the conference call which took place on Response to conference call.pdf PDF Pipeline for SERFF Tracking Number HRMN Generated 12/08/ :58 AM

19 SERFF Tracking Number: HRMN State: Rhode Island First Filing Company: Horace Mann Insurance Company,... State Tracking Number: Company Tracking Number: RI H TOI: 04.0 Homeowners Sub-TOI: Owner Occupied Homeowners Product Name: Project Name/Number: Note To Filer RI Homeowners Rate and Rule Filing RI H101511/RI H Created By: Ronald Make on 07/28/ :50 PM Last Edited By: Ronald Make Submitted On: 07/28/ :51 PM Subject: Request for Teleconference Comments: Oliver Wyman would like to teleconference with company representatives to discuss open issue re: this filing. Pleae contact me to arrange a convenient date and time. Thank you. Ronald P. Make PDF Pipeline for SERFF Tracking Number HRMN Generated 12/08/ :58 AM

20 SERFF Tracking Number: HRMN State: Rhode Island First Filing Company: Horace Mann Insurance Company,... State Tracking Number: Company Tracking Number: RI H TOI: 04.0 Homeowners Sub-TOI: Owner Occupied Homeowners Product Name: Project Name/Number: Note To Reviewer RI Homeowners Rate and Rule Filing RI H101511/RI H Created By: Mindy Ballard on 07/21/ :45 AM Last Edited By: Mindy Ballard Submitted On: 07/21/ :45 AM Subject: Additional Information Comments: Dear Mr. Make, Good morning. My supervisor asked that I touch base with you to make sure that you have everything that you need from us for your review. Please let me know if there is any additional information that you need. Have a good day. Mindy Ballard Implementation Analyst PDF Pipeline for SERFF Tracking Number HRMN Generated 12/08/ :58 AM

21 SERFF Tracking Number: HRMN State: Rhode Island First Filing Company: Horace Mann Insurance Company,... State Tracking Number: Company Tracking Number: RI H TOI: 04.0 Homeowners Sub-TOI: Owner Occupied Homeowners Product Name: Project Name/Number: Amendment Letter RI Homeowners Rate and Rule Filing RI H101511/RI H Submitted Date: 07/01/2011 Comments: Attached please find our response to the request for additional information from Ron Make dated 06/16/2011. If you have any further questions, please contact me. Mindy Ballard Implementation Analyst Changed Items: Supporting Document Schedule Item Changes: User Added -Name: Response to Objection Letter dated 06/16/2011 Comment: Attached please find our response to the objection letter dated 06/16/2011. Response to objection letter pdf PDF Pipeline for SERFF Tracking Number HRMN Generated 12/08/ :58 AM

22 SERFF Tracking Number: HRMN State: Rhode Island First Filing Company: Horace Mann Insurance Company,... State Tracking Number: Company Tracking Number: RI H TOI: 04.0 Homeowners Sub-TOI: Owner Occupied Homeowners Product Name: Project Name/Number: Note To Filer RI Homeowners Rate and Rule Filing RI H101511/RI H Created By: Ronald Make on 06/16/ :16 AM Last Edited By: Ronald Make Submitted On: 06/16/ :16 AM Subject: Request for Additional Information Comments: Please see the attached request for additional information. PDF Pipeline for SERFF Tracking Number HRMN Generated 12/08/ :58 AM

23 Oliver Wyman Actuarial Consulting, Inc Avenue of the Americas, 29th Floor New York, NY Fax June 16, 2011 VIA SERFF Ms. Melinda Ballard Implementation Analyst Horace Mann Insurance Company 1 Horace Mann Plaza Springfield, IL Subject: Horace Mann Insurance Company Teachers Insurance Company Homeowners Rate Revision SERFF No. HRMN Dear Ms. Ballard: Oliver Wyman Actuarial Consulting, Inc. has been retained by the Rhode Island Department of Business Regulation to conduct a review of the captioned filing. In order that we may complete our review, please provide responses to the attached questions. The response to these questions should be submitted via SERFF. If any questions should arise concerning the requested information, please call Ms. Candace Casala at the Department of Business Regulation ( ). Sincerely, Theodore J. Zubulake, FCAS, MAAA Ronald P. Make Copy: Candace A. Casala, CIC, Sr. Insurance Rate Analyst, Depart. of Business Regulation g:\mow\rhode island - rhc\rhc 04\rhc04430\requesta doc

24 Page 2 June 16, 2011 Ms. Melinda Ballard Horace Mann Request for Additional Information Horace Mann Insurance Company Teachers Insurance Company Homeowners Rate Revision SERFF No. HRMN General Note: For any exhibits submitted in response to the following questions, label the chart with a number or letter in order to facilitate future discussion. In addition, provide a key for all resubmitted charts showing the formula/calculations used to derive the results. In addition, reference other exhibits as appropriate 1. Exhibit II, Page 1: a. Why have the weights by year changed from.30,.25,.20,.15,.10 from two filings ago to equal weights of.20 last filing and back to.30,.25,.20,.15,.10 in this filing? b. Provide an exhibit showing the steps leading to the derivation of the Adjusted Losses and LAE column, beginning with direct losses incurred. 2. Exhibit II, Page 3 Provide the derivation of the premium trends. 3. Exhibit II, Page 19 explain the selection of the and development factors given the experience presented in the exhibit. 4. Exhibit II, Page 20: a. Add 2006 and 2010 information to this exhibit. b. What is the reason for the sudden 15% increase in LAE expenses as a proportion of total incurred losses? c. Given the large difference in the 2009 LAE to loss factor relative to the prior years, why would it not be more reasonable to use each year s own LAE factor to derive the loss adjustment expenses by year? 5. Exhibit II, Page 22 Update this exhibit with 2010 expenses.

25 Page 3 June 16, 2011 Ms. Melinda Ballard Horace Mann 6. Exhibit II, Page 23: a. What is the source of the reinsurance margin dollars? b. Show how the reinsurance costs and recoverable portion are used in the derivation of an indication. c. What is the midpoint of the expected expense period and why is it used in this exhibit? 7. Exhibit II, Pages Derivation of Profit Loading: a. Resubmit these pages showing formulas used and references to other pages as appropriate. b. Provide the supporting data, assumptions, and calculations underlying the ratio of gross premiums to capital. Include an explanation of how capital is allocated to the homeowners line. c. Similarly, provide the data, assumptions, and calculations underlying the: i. investment gain from policyholder cash flow, ii. investment income on average equity funds, and iii. current GAAP equity to capital ratio 8. Exhibit IV, Page 1 Deductibles Explain how the indications are derived and how the proposed relativities were selected given the indications and the competitor factors shown. 9. Exhibit V, Page 1 Coverage A Amount of Insurance Relativities Explain how the indications are derived and how the proposed relativities were selected given the indications and the competitor factors shown. 10. Exhibit VI Protection Class Relativities Explain how the indications are derived and how the proposed relativities were selected given the indications shown. 11. Exhibit VII Provide support for the changes to the multi-line discounts. 12. Why is the Federal Flood Insurance Program credit being eliminated? 13. Provide any available support for the proposed rates for the condo additions and alterations endorsement 14. Reconcile the statement that The overall effect of this revision doesn t differ materially from our indicated needs to the indication of +41.2% and the proposed increase of 8.6%.

26 SERFF Tracking Number: HRMN State: Rhode Island First Filing Company: Horace Mann Insurance Company,... State Tracking Number: Company Tracking Number: RI H TOI: 04.0 Homeowners Sub-TOI: Owner Occupied Homeowners Product Name: Project Name/Number: Note To Reviewer RI Homeowners Rate and Rule Filing RI H101511/RI H Created By: Mindy Ballard on 05/23/ :19 PM Last Edited By: Mindy Ballard Submitted On: 05/23/ :20 PM Subject: Response to Deemers Comments: Dear Ms. Casala, I have received your "note to filer" regarding the deemer letters. We are in agreement with your continued review of our homeowner filing, and we will not implement this filing until your review is finalized. Thank you. Have a good day. Mindy Ballard Implementation Analyst PDF Pipeline for SERFF Tracking Number HRMN Generated 12/08/ :58 AM

27 SERFF Tracking Number: HRMN State: Rhode Island First Filing Company: Horace Mann Insurance Company,... State Tracking Number: Company Tracking Number: RI H TOI: 04.0 Homeowners Sub-TOI: Owner Occupied Homeowners Product Name: Project Name/Number: Note To Filer RI Homeowners Rate and Rule Filing RI H101511/RI H Created By: Candy Casala, CIC on 05/23/ :51 AM Last Edited By: Candy Casala, CIC Submitted On: 05/23/ :51 AM Subject: R I Deemers Comments: We have received your loss costs/rate filing and have sent it to one of our independent consulting actuaries either in New York, Oliver Wyman Inc. or Milliman Inc., in Wakefield, Massachusetts to review. They will be contacting you shortly. Please read the three deemer letters allowed to us by either Rhode Island General Law et al or the Rhode Island Workers Compensation Law. At the passing of the first 30 days from receipt of your rate filing the first deemer letter will apply. If after the passing of the next 30 days the filing is still being reviewed the second deemer letter will apply. If after the passing of the next 30 days the filing is still under review the third deemer letter will apply. We ask that you send us a note to reviewer stating you are in agreement with our continued review of the filing and will not implement it until our review is finalized. You may send us this reply immediately, upon receipt of this memo, or wait until the expiration of the final deemer letter. This decision is yours to make. Failure to do so may result in our calling for a hearing. We thank you for your cooperation. Kindly mark your records that we are extending the deemer provision beyond the thirty (30) days as allowed under Rhode Island Laws and Regulations. (Per Chapter 44 of Rhode Island General Laws for Casualty and /chapter 6 for PDF Pipeline for SERFF Tracking Number HRMN Generated 12/08/ :58 AM

28 SERFF Tracking Number: HRMN State: Rhode Island First Filing Company: Horace Mann Insurance Company,... State Tracking Number: Company Tracking Number: RI H TOI: 04.0 Homeowners Sub-TOI: Owner Occupied Homeowners Product Name: RI Homeowners Rate and Rule Filing Project Name/Number: RI H101511/RI H Property or the Workers Compensation Statute). This will allows us sufficient time to make a comprehensive review. Please mark your records accordingly. Kindly mark your records that we are continuing to extend the waiting period beyond the thirty (30) days allowed under Rhode Island Laws and Regulations. (Per Chapter 44 of Rhode Island General Laws for Casualty and Chapter 6 for Property and Workers Compensation Statute). This will allow us sufficient time to make a comprehensive review. This letter will become effective when our prior deemer letter expires. We will let you know our decision regarding approval upon completion of the review process. Please be advised that the expiration date of your second deemer letter will soon expire. As the above-captioned filing has not yet been approved, we offer the insurer the option of sending via SERFF a Note to Reviewer advising of the insurer s willingness to give the Department additional time to review the filing. The letter must indicate that the insurer will not deem the filing and will await our review. Otherwise, the Department will be left with no other alternative than to disapprove the above-captioned filing and offer the insurer the right to hearing to resolve our actuarial concerns. PDF Pipeline for SERFF Tracking Number HRMN Generated 12/08/ :58 AM

29 SERFF Tracking Number: HRMN State: Rhode Island First Filing Company: Horace Mann Insurance Company,... State Tracking Number: Company Tracking Number: RI H TOI: 04.0 Homeowners Sub-TOI: Owner Occupied Homeowners Product Name: Project Name/Number: Rate Information Rate data applies to filing. RI Homeowners Rate and Rule Filing RI H101511/RI H Filing Method: Prior Approval Rate Change Type: Increase Overall Percentage of Last Rate Revision: % Effective Date of Last Rate Revision: 07/15/2011 Filing Method of Last Filing: Prior Approval Company Rate Information Company Name: Overall % Overall % Rate Written # of Policy Written Maximum % Minimum % Indicated Impact: Premium Holders Premium for Change (where Change (where Change: Change for Affected for this this Program: required): required): this Program: Program: Horace Mann Insurance Company % 8.600% $34, $406, % % Company Rate Information Company Name: Overall % Overall % Rate Written # of Policy Written Maximum % Minimum % Indicated Impact: Premium Holders Premium for Change (where Change (where Change: Change for Affected for this this Program: required): required): this Program: Program: PDF Pipeline for SERFF Tracking Number HRMN Generated 12/08/ :58 AM

30 SERFF Tracking Number: HRMN State: Rhode Island First Filing Company: Horace Mann Insurance Company,... State Tracking Number: Company Tracking Number: RI H TOI: 04.0 Homeowners Sub-TOI: Owner Occupied Homeowners Product Name: Project Name/Number: RI Homeowners Rate and Rule Filing RI H101511/RI H Teachers Insurance Company % 8.600% $29, $346, % % Overall Rate Information for Multiple Company Filings Overall % Rate Indicated: % Overall Percentage Rate Impact For This Filing: 8.600% Effect of Rate Filing - Written Premium Change For This Program: $64,499 Effect of Rate Filing - Number of Policyholders Affected: 632 PDF Pipeline for SERFF Tracking Number HRMN Generated 12/08/ :58 AM

31 SERFF Tracking Number: HRMN State: Rhode Island First Filing Company: Horace Mann Insurance Company,... State Tracking Number: Company Tracking Number: RI H TOI: 04.0 Homeowners Sub-TOI: Owner Occupied Homeowners Product Name: RI Homeowners Rate and Rule Filing Project Name/Number: Rate/Rule Schedule RI H101511/RI H Schedule Item Exhibit Name: Rule # or Page Rate Action Previous State Filing Attachments Status: #: Number: Homeowner Rules Manual Index, Pages 1-2Replacement HRMN Index, Pages 1-2.pdf Homeowner Rules Manual Page 4, Rule Replacement HRMN Page 4, Rule (Withdraw) (Withdraw).pdf Homeowner Rules Manual Page 6, Rule 3.6 Replacement HRMN Page 6, Rule 3.6 (Withdraw) (Withdraw).pdf Homeowner Rules Manual Page 7, Rule 4.1 Replacement HRMN Page 7, Rule 4.1 (Page 8 due to (Page 8 due to shifting) shifting).pdf Homeowner Rules Manual Page 9, Rules 5.1, 5.2, 6.1 Replacement HRMN Page 9, Rule 5.1, 5.2, 6.1.pdf Homeowner Rules Manual Page 10, Withdraw Rule 6.6 (Pages due to shifting) Replacement HRMN Page 10, Rule 6.6 (Pages due to shifting).pdf Homeowner State Rate Pages Page HR-1, RuleReplacement HRMN Page HR-1, Rule (Withdraw) (Withdraw).pdf Homeowner State Rate Pages Pages HR-2 & 3, Replacement HRMN Page HR-2 & 3, Rule Rule 5.0, 6.1, 5.0, 6.1, 6.5, 6.6.pdf 6.5, & Withdraw PDF Pipeline for SERFF Tracking Number HRMN Generated 12/08/ :58 AM

32 SERFF Tracking Number: HRMN State: Rhode Island First Filing Company: Horace Mann Insurance Company,... State Tracking Number: Company Tracking Number: RI H TOI: 04.0 Homeowners Sub-TOI: Owner Occupied Homeowners Product Name: Project Name/Number: RI Homeowners Rate and Rule Filing RI H101511/RI H Homeowner State Rate Pages Page HR-4, RuleReplacement HRMN Page HR-4, Rule pdf Homeowner State Rate Pages Page HR-5, RuleReplacement HRMN Page HR-5, Rule pdf Homeowner State Rate Pages Page HR-6, RuleReplacement HRMN Page HR-6, Rule & & pdf Homeowner State Rate Pages Page HR-7, RuleReplacement HRMN Page HR-7, Rule (Page (Page 8 due to due to shifting) shifting).pdf HMIC Premium Pages Pages 1-3 Replacement HRMN Premium Pages - HMIC.pdf TIC Premium Pages Pages 1-3 Replacement HRMN Premium Pages - TIC.pdf PDF Pipeline for SERFF Tracking Number HRMN Generated 12/08/ :58 AM

33 HORACE MANN INSURANCE COMPANY TEACHERS INSURANCE COMPANY RHODE ISLAND HOMEOWNER RULES INDEX Page Rule Number Number Actual Cash Value Roof Endorsement Additional Coverage Endorsement Additional Interests Additional Living Expense Additional Locations Additional Residence Premises - Rented to Others Assignment Calculation of Premium Cancellation Claim Record/Persistency Rating Plan Condominium Supplemental Coverages Continuous Renewal Plan Co-owner Occupancy Deductibles Dwellings Under Construction Earthquake Electronic Data Processing Equipment Electronic Funds Transfer Eligible Occupancy Fire Department Service Charge Glass Home-Buyer Loyalty Credit Homeowner First Mortgage Disaster Identity Fraud Advocacy Services Inception Time Ineligible Occupancies Inflation Guard Coverages Liability Changes in Limits Credit for Mandatory Coverages Medical Payments to Others Optional Coverages Other Exposures Personal Reductions Loss Assessment Condominiums Homeowners Effective 10/15/ Indicates Revision

34 HORACE MANN INSURANCE COMPANY TEACHERS INSURANCE COMPANY RHODE ISLAND HOMEOWNER RULES INDEX Page Rule Number Number Medical Payments Midterm Changes Motorized Vehicles - Increased Limits Multi-Line Discount Non-Sufficient Funds Office, Prof., Private School and Studio Occupancy Package Policy Requirements Payment Plans Perils Insured Against Personal Property Increased Limit In Rental Units Reduced Limit Replacement Value Scheduled Policy Term Policywriting Instructions Premium Determination Premium Modifications Private Structures... 13,18 7.3,8.2 Program Description Property Coverages (Mandatory) Property Coverages (Optional) Refrigerated Food Products Replacement Cost Personal Property Roof Surfacing Surcharge Row and Townhouses Scheduled Personal Property Seasonal Dwellings Secondary Locations Sponsorship Benefits Survivor s Waiver of Premium Tenant s Improvements Tier Rating Transfer of Policy Waterbed Liability Water Damage Watercraft Woodburning Device Surcharge Year of Construction Effective 10/15/2011 2

35 HORACE MANN INSURANCE COMPANY TEACHERS INSURANCE COMPANY RHODE ISLAND HOMEOWNER RULES RULE 2. PROGRAM DESCRIPTION The following is a general description of the coverages provided by the Homeowner forms. The policy forms state the complete conditions. 2.1 Property Coverages - Property (Mandatory) Coverage A - Residence Coverage B - Private Structures Coverage C - Personal Property Coverage D - Additional Living Costs and Loss of Rent Forms 1 and 2 cover the residence, private structures, personal property and additional living costs against losses resulting from the perils indicated below. Form 1 Form 2 Fire or Lightning... X Windstorm or Hail... X Explosion... X Riot or Civil Commotion... X Aircraft... X Vehicles... X Smoke... X Vandalism... X Glass Breakage... X Theft... X Falling Objects... Weight of Ice, Snow or Sleet... Collapse of Building... Sudden and Accidental Tearing Apart, Burning or Bulging... Accidental Discharge of Liquids or Steam... Freezing... Sudden and Accidental Damage from Electrical Currents... X X X X X X X X X X X X X X X X X Forms 3 and 7 cover the residence, private structures and additional living costs against all physical loss, with certain exceptions. Personal property is covered for the perils shown for Form Form 4 covers personal property including the insured's interest in building additions and improvements and additional living expense against loss by the perils shown for Form 2. Effective 10/15/2011 4

36 3.3 Continuous Renewal Plan HORACE MANN INSURANCE COMPANY TEACHERS INSURANCE COMPANY RHODE ISLAND HOMEOWNER RULES The policy may be continued for successive terms by payment of the required premium. Attach Endorsement CC-H Additional Interests The policy may cover the interests of additional owners at no additional premium. This coverage is limited to the building and premises liability. Attach Endorsement HM Transfer or Assignment The Policy may be endorsed to effect transfer to another location within the same state (Form 4 only). Assignment of coverage from one insured to another is not allowed. A new application is required. 3.7 Cancellation or Reductions in Limits of Liability or Coverages Mandatory coverages may not be cancelled unless the entire policy is cancelled. The policy must be cancelled in accordance with the terms of applicable cancellation provisions. If the policy or non-mandatory coverages are cancelled or the amount of insurance is reduced: By the company or by the insured; or In the event of foreclosure of the mortgage on the insured real property; or In the event of relocation if a Company policy is issued at new location; or In the event of the sale of property if other properties are insured by the Company: Compute return premium pro rata. RULE 4. PREMIUM DETERMINATION Annual premiums and rates are shown in the State Rate Pages. The basic policy premiums are for property and liability coverages. 4.1 Calculation of Premium Any computations for additional coverages or additional amounts of insurance are to be rounded separately to the nearest dollar. Fifty cents or more is to be considered as a dollar. The premium is computed as follows: Determine the base premium by using the correct premium group chart in the rate pages. This group is based on form, territory, protection class, construction type and amount of Coverage A or Coverage C. Effective 10/15/2011 6

37 HORACE MANN INSURANCE COMPANY TEACHERS INSURANCE COMPANY RHODE ISLAND HOMEOWNER RULES Add to any townhouse/row house charge (if applicable) The condominium discount is applied to (if applicable) The premium from should then be adjusted for any revised limit of Coverage C (except Tenants and Condominiums) The proper charge or credit for deductible is applied to the premium from (This is the basic premium.) The Year of Construction Factor is applied to the premium from (if applicable). The dollar amount is applied to the premium The Multi-Line Discount is applied to the premium from (if applicable). The dollar amount of credit is subtracted from the premium The Claim Record/Persistency Rating Plan is applied to the premium from (if applicable). The dollar amount is applied to the premium The Home-Buyer Loyalty Credit is applied to the premium from (if applicable). The dollar amount of credit is subtracted from the premium The charge for replacement cost on contents is applied to the premium from (if applicable). The dollar amount is applied to the premium The Woodburning Device Surcharge is applied to the premium from (if applicable). The dollar amount is applied to the premium The Roof Surfacing Surcharge is applied to the premium from (if applicable). The dollar amount is applied to the premium Add the additional premium for all mandatory or optional property coverages and all mandatory or optional liability coverages Apply the tier factor to the premium from Add the installment fee amount when applicable. 4.2 Changes in Liability Limits Liability coverage limits may be increased or decreased. The premiums are shown in the State Rate Pages. 4.3 Other Liability Exposures Liability coverage for the following exposures is required if they exist. The additional premium is shown in the State Rate Pages Three or four family dwellings Effective 10/15/2011 7

38 HORACE MANN INSURANCE COMPANY TEACHERS INSURANCE COMPANY RHODE ISLAND HOMEOWNER RULES All additional or secondary residence premises where the named insured or spouse maintains a residence, other than business or farm properties All residence employees of the named insured or spouse not covered or not required to be covered by workers' compensation insurance. A charge is required for residence employees in excess of two Incidental office, professional, private school or studio occupancies by the named insured on residential premises of the named insured. Refer to Rule Midterm Changes The limits of liability may be changed or coverages added or deleted during the policy term. Compute the premium on a pro rata basis using the same rates in effect when the current policy premiums were calculated Changes which result in return or additional premium of $3 or less will not be billed or returned to the insured unless requested in writing. 4.5 Reserved for Future Use 4.6 Row and Townhouses The premium for an eligible one or two family owner-occupied dwelling in a townhouse or row house is determined as shown in the State Rate Pages. An eligible two family owner-occupied dwelling is considered two individual units when determining the number of family units within a fire division. 4.7 Reserved for Future Use 4.8 Payment Plans A payment plan is available if: a. the policy meets minimum premium requirements listed below: Plan Minimum Premium Full None Two Pay $100 Three Pay $200 Four Pay None b. the policy is not a mortgagee pay policy. Refer to state rate pages for installment fees. 4.9 Non-Sufficient Funds Policyholders checks for payment of premium that are returned due to nonsufficient funds (NSF) in the account from which the check was written will result in a service charge per occurrence. Refer to the State Rate Pages for NSF fees. Effective 10/15/2011 8

39 4.10 Electronic Funds Transfer HORACE MANN INSURANCE COMPANY TEACHERS INSURANCE COMPANY RHODE ISLAND HOMEOWNER RULES 1. Installment payments by EFT shall be made on a monthly basis. 2. For new business, the initial payment shall be the equivalent of two months premium for the 12-month term; the remaining monthly payments shall be of equal amounts. For renewals, there shall be equal monthly payments. 3. A service fee of $9.00 per 12-month period will be charged. This fee is earned when written and is not refundable. RULE 5. DEDUCTIBLES The deductible amount is shown on the Declarations Page; no endorsement is needed. 5.1 Flat and Percentage Deductibles - All Perils The policy may be issued with one of the following options at the premium credit or surcharge shown in the State Rate Pages. Deductible Amounts ,000 1% of Coverage A* (N/A for Forms 4 & 6) 1,500 2,500 5,000 Base deductible - $500 *Subject to a minimum $100,000 Coverage A. 5.2 Reserved for Future Use 5.3 Reserved for Future Use 5.4 Reserved for Future Use RULE 6. PREMIUM MODIFICATIONS 6.1 Reserved for Future Use 6.2 Reserved for Future Use Effective 10/15/2011 9

40 HORACE MANN INSURANCE COMPANY TEACHERS INSURANCE COMPANY RHODE ISLAND HOMEOWNER RULES 6.3 Woodburning Device Surcharge - All Forms A surcharge will be applicable if the property has a woodburning device. The surcharge is shown in the State Rate Pages. 6.4 Year of Construction - Forms 1, 2, 3, 7 Factors will apply to the basic policy premium depending upon the age of the dwelling. The age is determined by subtracting the year of construction from the effective date year. The factors are shown in the State Rate Pages. 6.5 Multi-Line Discount All Forms A discount to the basic policy premium will be allowed if the named insured has an auto, life, and/or annuity policy with us. Auto policies written on motorcycles, motor homes, snowmobiles, utility trailers, recreational trailers, kit cars, antique vehicles, electric cars or golf carts will not qualify the homeowner policy for the discount. The discounts are shown in the State Rate Pages. 6.6 Reserved for Future Use 6.7 Home-Buyer Loyalty Credit -- Forms 3, 4 (condo) & 7 A credit to the basic policy premium will be allowed if the named insured is insured with us under a HM-4 tenant policy and converts to a HM-3 or HM-7 homeowner policy or a HM-4 condominium owner policy without any interruption in coverage. This is a one-time credit for the initial policy term. The credit is shown in the State Rate Pages. 6.8 Roof Surfacing Surcharge - Forms 1, 2, 3, 7 A surcharge will be applicable if the property has a shake shingle type roof. The surcharge is shown in the State Rate Pages. 6.9 Tier Rating - Forms 1, 2, 3, 7 All Form 1, 2, 3 and 7 policies are subject to tier rating. The applicable rating tier is determined using the credit score of the primary named insured. Tier 7 should be used for applicants or policyholders who will not allow the use of their credit. Tier 6 should be used when an applicant or policyholder has insufficient credit history to produce an insurance score. Tier 9 should be used when we are unable to obtain a credit score for an applicant or policyholder. Tier 6 and Tier 9 should be assigned a neutral rating factor. The neutral rating factor is defined as the factor assigned to Tier 2. Effective 10/15/