New Jersey Administrative Code
Title 11 - INSURANCE
Chapter 3 - AUTOMOBILE INSURANCE
Subchapter 16B - RATE PROCESS FOR LIMITED RATE CHANGES; CALCULATIONS FOR PRIVATE PASSENGER AUTOMOBILE INSURANCE RATE CHANGES
Section 11:3-16B.2 - Definitions
The following words and terms, as used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.
"Accident year" means the 12-month period covering the occurrences during that period.
"Affiliate" means an insurer that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the insurer making a filing.
"AIRE" means the Automobile Insurance Risk Exchange, established pursuant to 39:6A-21.
"Base rate" means the manual rate that results from all rating factors (limits, class, tiers, etc.) being at unity (1.000 factor).
"Claim" means a request for payment for a loss which comes under the terms of an insurance contract.
"Commissioner" means the Commissioner of the New Jersey Department of Banking and Insurance.
"Coverage" means:
1. Split limit bodily injury ("BI");
2. Split limit property damage ("PD");
3. Combined single limit BI and PD ("CSL");
4. Personal injury protection including medical payments ("PIP");
5. BI, PD and PIP combined ("PACK");
6. Uninsured and underinsured motorists, bodily injury and property damage ("UM");
i. For developing the indications by coverage, UM data may be combined with liability data in 1, 2, 3 or 5 above;
7. Comprehensive ("COMP"); and
8. Collision ("COLL").
"Department" means the New Jersey Department of Banking and Insurance.
"Expenses" means that portion of a rate that is attributable to commissions and brokerage, other acquisition expenses, general expenses, and taxes, licenses and fees in addition to other miscellaneous expenses. Other miscellaneous expenses include the Automobile Insurance Risk Exchange (AIRE) assessments, AIRE allocations, AIRE investment income, Limited Assignment Distribution (LAD) carrier fees, if applicable, the expected gain (deficit) resulting from assigned risk business, and assessments for losses and costs relating to uninsured motorist coverage and pedestrian personal injury protection.
"Exposure" means one car insured for one year, or two cars insured for six months, each, etc.
"Filer" means any insurer or rating organization who makes an annual informational filing or rate filing requiring prior approval pursuant to these rules.
"Group of coverages" means liability coverages (to include bodily injury liability, property damage liability, personal injury protection and uninsured/underinsured motorists) and physical damage coverages (to include collision and comprehensive).
"Informational filing" means a filing made annually on July 1, in accordance with N.J.S.A. 17:29A-36.2b.
"Loss cost multiplier" means the adjustment reflecting expenses, profit and contingency loading and any modifications that the insurer used on the loss costs to produce final rates.
"Personal Automobile Insurance Plan" or "PAIP" means the New Jersey Personal Automobile Insurance Plan established by 17:29D-1 et seq.
"Prior approval filing" means a filing made pursuant to 17:29A-14 and 11:3-16.6 to alter, supplement or amend a rating system or any part thereof.
"Prospective loss cost" means that portion of a rate that does not include provisions for expenses (other than loss adjustment expenses) or profit, and is based on historical aggregate losses and loss adjustment expenses adjusted through development to their ultimate value and projected through trending to a future point in time.
"Rate" means the unit charge by which the measure of exposure or the amount of insurance specified in a policy of insurance or covered thereunder is multiplied to determine the premium. The unit charge may be expressed as a single number or as a prospective loss cost and an adjustment to account for the treatment of expenses, profit and variations in loss experience.
"Rating organization" means every person or persons, corporation, partnership, company, society, or association engaged in the business of ratemaking for two or more insurers.
"Rating system" means every schedule, class, classification, rule, guide, standard, manual, table or rating plan by whatever name described containing the rates and rules used by any insurer in determining or ascertaining a rate.
"Reasonable total rate of return" means that rate of return appropriate for an enterprise given the risk involved.
"Small filer" means a filer with less than 0.5 percent of the total New Jersey written premiums in the voluntary market for private passenger automobile insurance for the most recently available prior calendar year.
"Tier" and "tier rating system" refer to one or more tier placement criteria, filed and approved pursuant to 17:29A-46.1 et seq. and N.J.A.C. 11:3-19A, which defines and characterizes one or more mutually exclusive group of insureds.
"Total rate of return" means underwriting return and investment return on both reserves plus capital and surplus, related as a percentage to capital and surplus.
"Written premium" ("WP") means direct, written premium net of dividends paid or incurred.
