Current through Register No. 12, March 21, 2024
(a) When a policy of insurance is ceded to
the facility, a member shall cede all terms and provisions of the policy
covering private passenger automobile(s).
(b) Coverages up to the following limits
shall be eligible for cession to the facility:
(1) Bodily injury liability $250,000 each
person, $500,000 each accident;
(2)
Property damage liability $100,000 each accident;
(3) Single limit bodily injury and property
damage liability $500,000 each accident;
(4) Medical payments $10,000 each
person;
(5) Uninsured motorists at
least equal to bodily injury liability limits;
(6) Physical damage, loss of use, or damage
to automobiles on an actual cash value basis subject to the policy deductible
provisions;
(7) Towing and labor
$25 per disablement; and
(8) Any
other automobile insurance or limits required by law.
(c) Cessions to the facility with respect to
a policy written on business which is new to a member and which is new to the
group of insurers under common management or control to which the member
belongs shall be as follows:
(1) A policy may
be ceded by a member as of the policy effective date, provided the policy meets
the cession eligibility requirements and the following criteria:
a. The notice of cession is received by the
facility within 20 days after the policy effective date; or
b. The notice of cession is received by the
facility from 21 to 60 days after the policy effective date and either:
1. The company provides documentation to the
facility that the policy was ceded as a result of misinformation provided by
the insured; or
2. The company
provides documentation to the facility that the policy was originally written
as a facility policy, at the facility rate, indicating that the company or
producer initially intended to cede the policy. Otherwise, the cession shall be
effective on the date the notice of cession is received by the facility;
(2) No loss
incurred within the 60-day retroactive period shall be covered by the facility
unless the member provides reliable information to the board that the policy
was ceded as a result of misinformation provided by the insured not merely
because of the loss;
(3) With
respect to a policy written on business which is new to a member and which is
new to the group of insurers under common management or control to which the
member belongs, if any, the premium for such a policy ceded subsequent to the
policy effective date shall be the facility premium retroactive to the policy
effective date;
(4) Notwithstanding
(2) above, if the insured elects not to accept the offer made in the
notification of change as required by Ins 1406.10(h), any earned premium
charged to the insured shall be at the originally quoted rate, unless the
cession or movement to a new company or tier is based upon misinformation
provided by the insured;
(5) Any
return premium from this cancellation request pursuant to (4) above shall be
calculated pro rata and returned within 30 days pursuant to
RSA
402:81;
(6) With respect to a replacement policy as
defined in
Ins
1405.02(x), the cession shall be
effective as of the effective date of the replacement policy, provided the
notice of cession is received by the facility within 20 days of the replacement
policy effective date. Otherwise, the cession shall be effective on the date
the notice of cession is received by the facility;
(7) With respect to a renewal policy as
defined in Ins 1406.02(w), on the renewal date of an expiring policy, provided
written notice is received by the facility before the effective date of the
renewal policy. Otherwise, the cession shall be effective on the date written
notice is received by the facility;
(8) With respect to a policy ceded at other
times, on receipt by the facility of the required notice, but such acceptance
shall not be retroactive; and
(9)
No renewal policy shall be ceded to the facility unless a 45-day written notice
of such action is delivered to the policyholder.
(d) The facility charge for members on ceded
policies shall be the facility gross premium less 15 percent facility gross
premium and less commission allowance for the cedable limits, regardless of the
date of cession, except that a pro rata credit against the charge shall be
allowed in the event of cancellation of the policy.
(e) Policies ceded shall remain in the
facility until the expiration date or cancellation date of the
policy.
(f) No policy shall be
ceded to the facility unless such policy has at least one SDIP point. In
addition, a motor vehicle report shall be ordered on all licensed members of
the household on all policies ceded to the facility as new business and at
least every 3 years thereafter on renewal business for the purpose of
determining SDIP points.
(g) No
policy shall be ceded to the facility solely because of age, place or area or
residence, race, color, creed, national origin, marital status, lawful
occupation including military service, or credit information pursuant to
RSA
417:4VIII(e).
(h) Each member shall have the following
limitations on its cessions to the facility:
(1) Each member shall cede no more than 10
percent of its business;
(2) Each
member shall pay to the facility 2 dollars for each dollar of premium over the
limitation that it has ceded to the facility;
(3) Each member's cessions shall be
calculated based on a fiscal year of January 1 to December 31; and
(4) The cession date shall be determined by
the effective date of the policy ceded.
(i) No cession of a new policy to the
facility shall be initiated after the 60th day following the effective date of
the new policy and shall not be effective unless written notice is mailed to
the insured. Such notice shall include the terms and premiums for
coverage.
(j) Once no SDIP point(s)
is included in the experience period for a renewal policy, the insurer shall
offer the renewal policy in the voluntary market.
