New York Codes, Rules and Regulations
Title 11 - INSURANCE
Chapter V - Rates And Rating Organizations
Subchapter G - Noncommercial Automobile Insurance Rates For Inexperienced Operators
Part 168 - Noncommercial Private Passenger Automobile Insurance Rates For Inexperienced Principal Operators
Section 168.2 - Procedures
Current through Register Vol. 46, No. 39, September 25, 2024
The following procedures shall be applicable to all rates subject to the provisions of section 2332 of the Insurance Law:
(a) Insurers shall establish separate classifications for those principal operators licensed less than three years (inexperienced operators) and those licensed three or more years (experienced operators). Insurers shall maintain statistics by principal operator, for each of the first three years of licensing, and for those licensed three or more years. These statistics shall be coded separately for youthful and adult driver classifications.
(b) Until insurers develop reliable statistics, the rate differential for inexperienced operators who have no chargeable accidents under any merit rating plan shall be at least 20 percent greater than for experienced operators, for each of the first three years of experience. There shall be an actuarially equivalent decrease in the rates charged experienced operators. Insurers shall demonstrate that their overall premium income will not be increased solely as a result of these changes in differentials. When an insurer develops reliable statistics, it may file for a differential which is more appropriate for its book of business.
(c) Since primary differentials for youthful male or female operators in large part reflect the same hazard potential as the inexperienced operator differential, an insurer must show that it has made appropriate reductions, if necessary, in these primary differentials. For example, where an insurer uses a classification for drivers under 20 or 21 years of age, differentials for such drivers shall be reduced by an amount actuarially equivalent to the inexperienced operator surcharge which would normally apply, unless the insurer can demonstrate that such a procedure is inappropriate for its insureds. Youthful accident-free experienced operators (i.e., those licensed three or more years) should normally receive a rate reduction.
(d) An insurer may utilize an inexperienced operator surcharge for a longer period than three years.
(e) Filings containing variations in inexperienced/experienced operator differentials by territory or class will be considered only if they are accompanied by appropriate statistical support.
(f) The foregoing procedures do not apply to the New York Automobile Insurance Plan, which has for some years maintained, and is required to continue to maintain, a differential for inexperienced/experienced drivers based upon the loss experience in the plan.
