Current through Register Vol. 38, No. 18, March 15, 2024
The following information is required pursuant to
G.S.
58-36-15(h) for those filings made under
G.S.
58-36-100:
(1) North Carolina
losses and loss adjustment expenses, each on paid and incurred bases without trending or other modification
for the experience period.
(a) The filer shall include loss and loss
adjustment expense data from all companies writing North Carolina workers' compensation insurance. In
addition, if exposures are used in the calculation of premiums at present rates, the filer shall provide all
available exposure data from these companies. If the experience of any company that writes more than one
percent of the North Carolina workers' compensation written premium has been excluded from any trend or loss
development calculations, the filer shall identify the company and its market share and provide an
explanation for its exclusion. The filer shall also estimate the aggregate market share of other companies
whose experience is excluded from such calculations.
(b) If any
identifiable group of policies is excluded from the calculation of classification differentials, the filer
shall describe those policies, indicate their market share, and provide an explanation for their
exclusion.
(c) The filer shall clearly describe all adjustments
to losses, loss adjustment expenses, expenses as defined in
G.S.
58-36-100(c), and exposures included in the
filing.
(d) The filer shall provide the latest available written
and earned premiums and market shares for the 10 largest writers of North Carolina workers' compensation
insurance.
(e) The filer shall provide the following information
on losses and loss adjustment expenses:
(i) For each of the latest three
available accident and calendar years, undeveloped and untrended losses and loss adjustment
expenses;
(ii) For each accident and policy year included in the
filing, paid losses, case basis reserves, loss development, incurred allocated loss adjustment expenses (if
collected separately from losses), incurred unallocated (or combined allocated and unallocated) loss
adjustment expenses, applied trend factors, and trended incurred losses and loss adjustment
expenses.
(2) Credibility factor
development and application. The filer shall provide all information related to the derivation of all
credibility factors contained in the filing, including the following:
(a) A
description of all data reviewed;
(b) A complete description of
the methodology used to derive these factors;
(c) A description
of alternative methodologies used in the last three years;
(d) A
description of the criteria used to select a methodology;
(e)
Specific details on the application of these criteria in the selection of a methodology for this
filing;
(f) Details on the application of the methodology to this
filing.
(3) Loss development factor development and
application on both paid and incurred bases and in both numbers and dollars of claims:
(a) The filer shall provide all information related to the derivation of
all loss development factors contained in the filing, including the following:
(i) A description of all data reviewed;
(ii) A complete description of the methodology used to derive these
factors;
(iii) A description of alternative methodologies used in
the last three years;
(iv) A description of the criteria used to
select a methodology;
(v) Specific details on the application of
these criteria in the selection of a methodology for this filing;
(vi) Details on the application of the methodology to this
filing.
(b) The filer shall provide at least the
latest five available years of the aggregate loss data described in Sub-items (3)(b)(i) through (iii) of this
Rule for matching companies for all pairs of successive evaluation dates. The filer shall also provide the
corresponding loss development factors and five-year average factors derivable from the data:
(i) Data on both a policy year and an accident year basis;
(ii) Data separated into indemnity and medical portions, as well as
combined data;
(iii) Data separated into paid, case incurred and
incurred but not reported portions, as well as combined data;
(c) The filer shall provide for each of the loss amounts in Sub-item (3)(b)
of this Rule, paid claim counts, incurred claim counts, and outstanding claim counts.
(d) The filer shall provide at least the latest 10 available policy years
of the incurred loss data described in Sub-items (3)(d)(i) through (ii) of this Rule from the Unit
Statistical Plan for matching policies for all pairs of successive evaluation dates. The filer shall also
provide the corresponding loss development factors and five-year average factors derivable from the data:
(i) Losses separated into indemnity and medical portions, as well as
combined data;
(ii) Losses separated into deaths, permanent
totals, major permanent partials, minor permanent partials, temporary totals, and medicals only.
(e) The filer shall provide for each of the loss amounts in
Sub-item (3)(d) of this Rule the corresponding incurred claim counts and for each of the policy years in
Sub-item (3)(d) of this Rule the aggregate earned exposures. Where small claims are reported in bulk, the
filer shall provide such information as accurately as possible, given the imprecision inherent in such
aggregate data.
(f) The filer shall provide for each of the
policy periods in Sub-items (3)(b) and (3)(d) of this Rule the law amendment factors for adjusting past
losses to current benefit levels.
(g) The filer shall include a
description of the reasons for the differences between the policy year data provided in response to Sub-items
(3)(b) and (3)(c) of this Rule and those provided in response to Sub-items (3)(d) and (3)(e) of this
Rule.
(4) Trending factor development and application:
(a) The filer shall provide all information related to the derivation of
all trend factors contained in the filing including the following:
(i) A
description of all data reviewed;
(ii) A complete description of
the methodology used to derive these factors;
(iii) A description
of alternative methodologies used in the last three years;
(iv) A
description of the criteria used to select a methodology;
(v)
Specific details on the application of these criteria in the selection of a methodology for this
filing;
(vi) Details on the application of the methodology to
this filing.
(b) The filer shall calculate the
following trend factors:
(i) Indemnity and medical trend factors based on
the latest eight available policy years and accident years of North Carolina paid and paid plus case
data;
(ii) Indemnity and medical trend factors based on the
latest eight available accident years and policy years of multi-state paid and paid plus case data;
(5) Changes in premium base and exposures. The filer
shall provide or estimate the following information on exposure trends:
(a)
The statewide average weekly wage for the latest five available calendar years;
(b) The statewide average weekly wage for the latest 10 available policy
years without the application of a payroll limitation;
(c) The
statewide average weekly wage for the latest 10 available policy years after the application of payroll
limitation; and
(d) The estimated statewide average weekly wage
for the calendar and policy years during which the rates will be in effect.
(6) Limiting factor development and application. The filer shall provide
information on the following items:
(a) Limitations on losses included in
the statistical data used in the filing;
(b) Limitations on the
extent of the rate or loss costs level change;
(c) Limitations on
the extent of classification rate or loss costs changes; and
(d)
Any other limitations applied.
(7) The percent rate or
loss costs change:
(a) The filer shall provide the overall statewide rate or
loss costs change, as well as the amount of the change attributable to each of the following: loss
experience, a modification of the trend factor, law amendments, a change in the loss based assessment
provision, and any other factors.
(b) The filer shall provide the
rate or loss costs changes for each industry group and for each classification.
(8) For assigned risks rate filings, the filer shall include support for
reasonable margin for underwriting profit and contingencies and investment income, including realized capital
gains.
(9) For assigned risk rate filings, the filer shall
provide investment earnings on capital and surplus. Given the selected underwriting profit and contingencies
provision contained in the filing, the filer shall indicate the resulting rates of return (including
consideration of investment income) on equity capital, on statutory surplus, and on total assets. The filer
shall show the derivation of all factors used in producing these calculations and justify the fairness and
reasonableness of these rates of return.
(10) As required by
G.S.
58-36-15, the filer shall:
(a) Provide
information on the following aspects of workers' compensation individual risk rating plans, including an
explanation of their purpose and a detailed description of their derivation:
(i) For experience rating plans, the table of expected loss rate and
discount ratios and table of weighting and ballast values.
(ii)
For retrospective rating plans, table of insurance charges, multipliers (including the derivation of any
assigned risk subsidy), and table of excess loss factors.
(b) Describe all payments made to all consultants (including lawyers,
actuaries, and economists) related to this filing and the previous one on workers' compensation insurance. If
payments cannot be specifically identified as related to particular filings, the filer shall estimate
them.
(c) Identify and describe all changes in methodologies from
the previous North Carolina workers' compensation rate filing. If any collected or reported data required by
this Rule are provided within 30 days after the initial submittal of a filing, that data shall be made a part
of the filing, provided the initial submittal acknowledges that it is incomplete and identifies specifically
what further data are to be submitted within the time permitted. No filing otherwise complete shall be deemed
to be proper until such time that all data required by this Rule have been submitted.
Authority
G.S.
58-2-40;
58-36-15(h);
Eff. February 1,
1996;
Pursuant to G.S.
150B-21.3A, rule is necessary without substantive public interest Eff.
January 3, 2017.