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 Complete • Resubmission • Withdrawn or disapproved state identification number • Address all questions raised • Effective Date • Regulation 3 AAC 31.200 – 217; 3 AAC 31.225 • Bulletin B05-09

5. 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/bulletins/96-05.htm

6. 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

7. 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

8. 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

9. 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)

11. 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

12. 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

15. 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