Utah Administrative Code
Topic - Insurance
Title R590 - Administration
Rule R590-127 - Rate Filing Exemptions
Section R590-127-6 - (a) Rating, Special Risk Rating
Universal Citation: UT Admin Code R 590-127-6
Current through Bulletin 2024-06, March 15, 2024
(1) A rate that is developed by an underwriter through an (a) rating process is exempt from the filing requirements of Section 31A-19a-203.
(2) An underwriter is permitted to use (a) rating only in the following circumstances:
(a) when the underwriter can clearly
demonstrate that a risk described by specific classifications in the Commercial
Lines Manual presents unique or unusual conditions of exposure or hazard such
that the application of the normal manual rate for that classification does not
produce a reasonable and equitable rate for the risk ;
(i) the underwriter should bear in mind that
a manual classification is understood to be general in nature and may not
exactly describe the risk being considered ; and
(ii) an (a) rating is not to be used simply
because the risk does not exactly match the manual classification
description;
(b) when
the coverage to be written is broader or more restricted than the coverage the
manual definition of coverage provides as limited by applicable manual
exclusions;
(c) when the insurer
has developed a program for a type of risk or coverage that is not included in
the Commercial Lines Manual and for which there is limited statistical data for
ratemaking purposes;
(d) when a
risk develops more than $100,000 in annual manual basic limits unmodified
premium for automobile liability, general liability, glass, and theft
insurance, individually, or $250,000 in any combination ; or
(e) when the one-year deposit premium charged
for the coverages afforded is $50,000 or more for boiler and machinery
risks.
(3)
(a) When an underwriter uses (a) rating , the
underwriting file shall contain the following:
(i) a full explanation showing that the risk
fits one of the circumstances described in Subsection (2); and
(ii) full and supporting factual
documentation showing the development of the rate assigned by the underwriter
containing an analysis of :
(A) the specific
definable loss potential characteristics;
(B) a comparison to similar risks and their
manual rates, available loss frequency, and severity data;
(C) an analysis of current engineering
reports; and
(D) any other
pertinent underwriting criteria.
(b) The underwriting file shall be made
available to the commissioner upon request.
(4)
(a)
When an insurer renews a risk that has been (a) rated according to Section
R590-127-6, the underwriting file shall contain documentation of the
underwriter's reevaluation of the (a) rating and justification for the
continuation of the (a) rating.
(b) If the (a) rating produces a renewal
premium that varies more than plus or minus 25% from the expiring policy
premium, the underwriting file documenting the rate development for the prior
term and the renewal term, and an explanation for the change in premium, shall
be made available to the commissioner upon request.
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