Current through November 25, 2024
(1) PURPOSE. The
purpose of this section is to establish the minimum supplementary rate
information required to be submitted with rate filings to the commissioner.
Statutes interpreted or implemented by this section are ss.
601.42(1g),
625.01,
625.02(3),
and
625.11,
Stats.
(2) SCOPE. Except as
provided in sub. (4), any insurer or rate service organization which is subject
to s.
625.13(1),
Stats., and is filing rates for any kind or line of direct insurance in this
state shall include, in that filing, the supplementary rate information
required by sub. (5) or (6).
(3)
DEFINITIONS.
(a) A "frequency trend factor"
means any factor which adjusts the past number of paid or incurred claims to
reflect more accurately the number of claims that can be expected to develop
during the period the proposed rates will be used.
(b) A "loss adjustment factor" means any
factor used to modify or adjust the actual losses paid or incurred during the
period under examination or review.
(c) A "loss development factor" means any
factor used either to adjust the reported amount of incurred losses to include
incurred but not reported losses or to correct errors in the estimation of loss
reserves for reported claims that have not been paid, or both.
(d) A "premium adjustment factor" means any
factor used to modify or adjust the actual premiums earned during the period
under examination or review.
(e) A
"rate level factor" means any factor that adjusts prior earned premiums to the
premiums that would have been earned if the present rates had been in effect
throughout the period under examination or review.
(f) A "severity trend factor" means any
factor which adjusts the past average claim amount to reflect more accurately
the average claim amount that can be expected to develop during the period the
proposed rates will be used.
(4) EXEMPTIONS.
(a) Life and disability insurance as defined
in s.
Ins 6.75(1), disability insurance as
defined in s.
Ins 6.75(2)
(c), title insurance as defined in s.
Ins 6.75(2)
(h), mortgage guaranty insurance as defined
in s.
Ins 6.75(2)
(i), municipal bond insurance as defined in
s.
Ins 3.08(3)
(e), and worker's compensation insurance as
defined in s.
Ins 6.75(2)
(k) are exempt from the provisions of this
section.
(b) All companies licensed
under ch. 612, Stats., are exempt from the provisions of this
section.
(c) The commissioner may,
upon written application, exempt an insurer from full or partial compliance
with this rule.
(5)
SUPPLEMENTAL RATE INFORMATION. A rate filing and accompanying supplemental rate
information shall be appropriately organized for the kind, class or line of
business for which the filing is being made. Except as provided in sub. (6),
all rate filings shall include the following supplementary rate information:
(a)
1. At
least 3 separate and consecutive years of both Wisconsin and aggregate of all
states' experience showing:
c. Separate reserves for reported but unpaid
losses; and
d. Reserves for losses
incurred but not reported.
2. If any of the information required by
subd. 1. is omitted or less than 3 years' experience is provided, an
explanation shall be submitted.
(b) An explanation of the rate-making
procedures including a description of any statistical data and actuarial
methods utilized; or a statement of facts and other detailed information which
explain judgments used; or a statement as to how the rates of the filing
company compare with those of the competition, providing detail where the rates
are substantially higher or lower; or any combination.
(c) Explanation of the permissible or target
loss ratio, including an explanation of how any investment income has been
taken into account.
(d) When used,
any premium adjustment factors and loss adjustment factors by year and an
explanation of methods and judgments underlying each factor. Loss adjustment
factors include but are not limited to loss development factors, frequency
trend factors, and severity trend factors. Premium adjustment factors include
but are not limited to rate level factors.
(6) OTHER SUPPLEMENTAL RATE INFORMATION. The
commissioner may accept supplemental information other than that required by
sub. (5) if the insurer or rate service organization can demonstrate to the
commissioner that this information fully supports the rate filing and complies
with s.
625.11,
Stats.
(7) USE OF RATE SERVICE
ORGANIZATION RATES. A member of or subscriber to a rate service organization
licensed under s.
625.32, Stats., shall
file supplementary rate information if its rates deviate from those filed on
its behalf by the rate service organization. Such a filing shall be as required
by subs. (5) and (6).
(8)
ADDITIONAL INFORMATION. The commissioner may require additional rate filing
information if the commissioner determines that the original filing does not
explain the proposed rate. Such additional information shall be provided within
30 days of the request.
