Private Passenger Auto Rate Filings & Rate Collection System Getting Filings Off To A Good Start. June 14, 2012

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1 Private Passenger Auto Rate Filings & Rate Collection System Getting Filings Off To A Good Start June 14, 2012 Howard Eagelfeld, FCAS Cyndi Cooper, ACAS

2 I-File System Filing Purpose A correct filing purpose will prompt the system to require the correct information and Rate Collection System files An incorrect filing purpose may allow you to submit a deficient filing Once a filing is created, the purpose cannot be changed and you may have to resubmit the filing to fix the problem 2 2

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4 I-File System Interrogatories If the filing is made with the intention of complying with House Bill (HB) 119, respond yes to filing made to comply with a change in Florida law If you are filing to change rates for an existing program AND you have at least 100 claims in at least one coverage then answer yes to interrogatory 4. (Must provide Standardized Rate Indications Workbook) If the filing changes the rate for any Office rating example OR you expect the overall premium for existing policyholders to be different as a result of the filing, OR this is a brand new program, answer yes to interrogatory 6. (Must provide Rate Collection System response) If you answer no incorrectly you will have to resubmit the filing. 4 4

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6 Explanatory Memorandum All changes that are being made in the filing must be described (other than pure editorial) Changes not described cause actuarial analysts to spend time checking for other potential missing changes, delaying the process 6 6

7 Supporting Information Label all exhibits and provide all intermediate calculations Each exhibit should have an explanation of what it is intending to accomplish, the source and nature of the information (what year(s), how it is compiled) and how the calculations performed actually accomplish the intention. Use Florida data to the extent that it is credible Exhibits created in Excel should be submitted in Excel format without converting all cells to numbers. Submitting as a PDF forces analysts to make calculations manually, which delays processing Avoid Excel cell references to other worksheets or workbooks not being submitted. If trade secret protection is needed, use that process rather than failing to submit underlying material 7 7

8 Trade Secret Documents NEW FEATURE FOR AUTO If information is claimed to be trade secret, you must submit it under the Supplementary Information component of the filing When asked for a Document Type, select Miscellaneous from the dropdown list Check the box next to the words Contains Trade Secret Information You must upload another file that fully describes the factual basis entitling the item(s) to protection. Refer to Section , Florida Statutes Information submitted on CD, DVD or by mail will generally not be accepted. Information not submitted per the above instructions is immediately available on the Internet when you click Submit Filing as the pop-up warns 8 8

9 Additional Rules Information In addition to their presence on manual pages, rule changes that do not affect premium must be shown Show proposed additions, revisions, and deletions separately Provide supporting data/information for each item shown The absence of the information stated above may delay the analysis of the filing while analysts reconstruct or request the information Uploading the page describing what must be provided does not improve matters 9 9

10 Manual Pages Must contain company (legal entity) name Must contain program name that matches the Rate Collection System program name Must have pages consecutively numbered so missing or partly overlapping pages can be quickly identified Must have date connected with the filing Must include the line of business Underwriting guidelines should state whether they are applicable to new business, renewal, or both Best clarity achieved by providing marked-up version and final version Submit checklist specifying each new page, each revised page, each page deleted, and each unchanged page 10 10

11 Rate Support by Territory Provide support for each coverage territory level data must be provided with each filing even if electing not to change rates by territory in the filing Company Experience Company experience must include raw experience (on-level premium, losses, etc.) and a complete description of the method used to arrive at the indications from the raw data Approved Florida Competitor Information Name of competitor, effective date of filing, Office filing number and method of any adjustments to the competitor relativities must be fully documented 11 11

12 Rate Support by Territory (cont d) A comparison of present, indicated and selected (or revised) territory base rates or relativities must be supplied and significant differences between the latter two should be explained If not adjusting rates by territory, include an explanation of why no change is appropriate and actuarially sound 12 12

13 Rate Level Indications Workbook Use latest version contained in I-File Support must be provided for all areas labeled with (SUPPORT!) Adjust historical data for changes to underwriting eligibility rules (if necessary) For comprehensive coverage, an expected catastrophe load (losses and loss adjustment expenses) should generally be included whether or not there are catastrophe losses in the experience period 13 13

14 Rate Level Indications Workbook (cont d) In Excel, provide company premium and loss trend data (frequency, severity and pure premium) as well as additional data sources (ISO, group data, Fast Track, etc.) used in the trend analysis If using Office benchmark trends, contact the Office prior to the filing to obtain the latest benchmarks. Provide company data in the filing in addition to an explanation for relying solely on Office benchmark trends 14 14

15 Rate Level Indications Workbook (cont d) If the company selected rate change differs substantially from the calculated indications in the Rate Level Indications Workbook, provide an explanation of why the selected changes are not excessive, inadequate, or unfairly discriminatory (Section , Florida Statutes) The changes shown in the Rate Collection System (RCS) by coverage must balance to those shown in the Rate Level Indications Workbook There should not be significant differences in Earned CRL & Earned Car-Years in the RCS when compared to the Rate Level Indications Workbook 15 15

16 Rating Variable Revisions Generalized Linear Models (GLM) multivariate analyses require extensive support Contact the Office for a list of questions prior to submitting a filing that contains predictive modeling 16 16

17 Best Practices If the final selected factors are based on multiple analyses, provide all analyses relied upon If using competitor information, include an explanation of why the particular competitor was chosen If selecting factors other than those indicated by the analysis, supply an explanation as to why the alternate factors are being selected Provide a breakdown of the indications by coverage listing the contribution of each change (e.g., rating factors, base rate, expense fee, etc.) to the overall change for that coverage Include the rate impact due to underwriting changes and document how the impact was estimated 17 17

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What Makes a Good Florida Rate Filing?

2016 CAS RPM Seminar What Makes a Good Florida Rate Filing? Kayne M. Smith, Actuary Florida Office of Insurance Regulation March 16, 2016 2 What Makes a Good Florida Rate Filing? 1)Know and Follow the