Property, Casualty, and Surety Filing Information
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General Information
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| The Department of Insurance's web site can be
found at www.aldoi.gov. |
| Important Bulletin: Mandatory Serff
submission for all Rate/Rule and Form filings.
Mandatory Serff November 1, 2007 |
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Submissions should include the required filing fee per bulletin dated April 29,
2003. See Fee Schedule.
Electronic Funds Transfer (EFT) is encouraged. |
| All Serff filings must be submitted in Print to
PDF format. |
| IMPORTANT: All filings must clearly outline
items being filed or revised. Any items placed within a final manual or form
not previously outlined are not considered approved. |
| Authorization Form - Authorizes the filer, if
other than the company, to make the filing on behalf of the company. The
Authorization Form must be submitted with each filing in which the company
itself is not submitting the filing. |
| To further expedite the filing process, please
submit rate and rule filings separate from form filings. |
| The Alabama rating statute is contained in
Chapter 13 of Title 27 of the Code of Alabama, 1975. The policy and form
approval requirements are contained in Chapter 14 of Title 27 of the Code of
Alabama, 1975, and both of these chapters can be accessed in the Legislation
section at www.legislature.state.al.us
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| The information contained herein is provided to
assist insurers in submitting and Departmental personnel in reviewing the
filings and does not supercede the requirements of Alabama laws and regulations
governing the business of insurance. Insurers are required to be aware of and
comply with all Alabama laws, regulations, and Departmental Bulletins. |
Commercial Rate and Form Requirements
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Reference should be made to the general guidelines for property and casualty
insurance rate and form filings (Shown as Exhibit A).
Defense expenses should NOT be included within the limits on General Liability
policies.
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| See Alabama
Insurance Regulation No. 123 - Rates and Forms Filing Requirements for
Property and Casualty Insurance - effective July 1, 2001. (Reminder -
Regulation 123 DOES NOT apply to any Personal Lines, Worker's
Compensation or Medical Malpractice filings. Any commercial rate increase
proposals which result in more than a 10% overall increase in less than 12
months, will not be eligible for the file and use provisions of Regulation 123.
There are at least two possible scenarios where this could result in the
application of prior approval rather than the file and use provision. One is
when the overall increase proposal is for 10% or more and the other is where
the proposed increase in combination with an earlier increase results in more
than an overall increase of 10% in less than 12 months.) |
| See
Commercial File and Use Certification Form (Must be completed and
attached to the top of any filing being submitted under the File and Use
System.) |
| See
News Release regarding Terrorism Exclusions. Please submit a completed
Expedited Filing Transmittal Document with each Terrorism Risk Insurance Act
Filing. |
| All fire insurance rate filings shall provide at
least five years loss experience, including the year proceeding the year in
which rates are made or revised. This is in accordance with Section 27-13-27
(4) of the Alabama Insurance Code, 1975. |
| For all rate filings submitted, both on a prior
approval and file and use system, standard actuarial methods should be employed
including adjustment of losses for trend and loss development, adjustment of
premiums to current level and for trend, historical expense experience,
investment income consideration, credibility consideration, etc. |
| Commercial Property relative to Wind and Hail
Deductibles/Exclusions and Hurricane Deductibles - The Alabama DOI will accept
reasonable mandatory or optional wind & hail DEDUCTIBLES in all areas of
the state. Mandatory or Optional Wind & Hail EXCLUSIONS are acceptable Only
in the Beach Pool area where the insured could purchase the coverage back
through the Alabama Insurance Underwriting Association. A filed deductible or
exclusion must be accompanied by an appropriate credit. A company may not
have both a hurricane deductible and a wind & hail deductible filed in the
same territory. The carrier must comply with Alabama
Regulation 136.
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Personal Lines Submissions
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| Reference should be made to the general
guidelines for property and casualty insurance rate and form filings (Shown
as Exhibit A). |
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All rate submissions of new programs must include a side-by-side comparison
exhibit of at least 3 of their competitor's rates.
Personal auto liability policies should adhere to requirements for cancellation
outlined in Title 27, Chapter 23, Article 2 of the Code of Alabama,
1975.
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| Personal Automobile and Motorcycle Coverages -
Automobile and motorcycle filings must be submitted for prior approval.
Standard actuarial methods should be employed including adjustment of losses
for trend and loss development, adjustment for premiums to current level and
for trend, historical expense experience, investment income consideration,
credibility consideration, etc. Explanation and support should be provided for
various relativity revisions, including territorial, driver classification,
symbol, model, year, etc. |
| Residential Property Coverage, Homeowner, etc. -
Residential property coverage, homeowner, etc., filings must be submitted for
prior approval. Standard actuarial methods should be employed including
adjustment of losses for trend and loss development, adjustment for premiums to
current level and trend, historical expense experience, investment income
consideration, credibility consideration, etc. Explanation and justification
should be provided for various relativity changes including, territorial,
protection class, policy amount, etc. |
Homeowners Filings and the Use of Credit -
For Homeowners ratemaking, the expectation is that while credit may be a useful
indicator of loss propensity related perils such as fire or liability, it is
less predictive of losses related to catastrophe peril, both hurricane and
non-hurricane. Any Homeowners rate filing that either introduces a new rating
structure or proposes revisions to an existing rating structure that considers
credit must provide support quantifying the predictive power of credit in
measuring non-catastrophe versus catastrophe loss propensity. The proposed
rating structure related to credit should be consistent with this support,
varying the impact of credit by rating territory as indicated. |
| These filings should also provide rating
examples that show the impact of credit on beach and seacoast versus inland
risks. The examples should develop 6 sample premiums, specifically for a good
credit risk policy and a poor credit risk policy in the beach, seacoast in
inland. The poor credit risk should be for the poorest credit the company will
actually write. These 6 sample premiums should be provided for the current and
proposed rates. All policy characteristics for the examples should be the same
except for credit, territory and any minimum deductible requirements that vary
throughout the state. |
Homeowners Filings and Territorial Base Rate
Changes -
For Homeowners ratemaking, Alabama's non-hurricane catastrophe exposure should
be tiered high to low going from the northern part of the state to the southern
part. This is evidenced by non-hurricane catastrophe data by territory
groupings for major insurers in Alabama, as well as weather data with regard to
tornado and other wind events. The non-hurricane catastrophe exposure should be
examined and tiered to reflect the expectation of higher non-hurricane
catastrophe per amount of insurance in the northern part of the state versus
the southern part.
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| All Homeowners filings proposing territorial
base rate changes should provide: |
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Indicated rate level changes by territory
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Hurricane catastrophe, non-hurricane catastrophe and non-catastrophe components
allocated to territory used to develop the territorial indications.
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