Florida Regulations 69O-170.0142: Ratemaking and Rate Filing Procedures for Commercial Residential Insurance and All Other Lines
Current as of: 2024 | Check for updates
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(1)(a) The procedures in this rule apply to all commercial residential insurance rates filed pursuant to Florida Statutes § 627.062, and all other lines of property and casualty insurance as defined in Sections 624.604 and 624.605, F.S.
(b) This rule does not apply to medical malpractice coverage which is subject to Fl. Admin. Code R. 69O-170.0143 or workers’ compensation insurance as defined in Section 624.605(1)(c), F.S.
(c) For purposes of this rule, reference to commercial residential insurance shall include insurance on the following types of risks:
1. Condominium associations;
2. Homeowners associations;
3. Apartment buildings;
4. Hotels and motels;
5. Dormitories (including sorority and fraternity houses);
6. Boarding houses; and
7. Rooming houses.
(2) The filing submittal requirements in this rule are in addition to the information required by subsection 69O-170.013(3), F.A.C., and shall be included as a required component of the filing made pursuant to subsection 69O-170.013(3), F.A.C.
(3)(a) Each rate filing shall contain either:
1. Separate rate level indications and support for such indications on a statewide basis for each type of coverage which the insurer writes in Florida; or
2. If a series of policy types bear a uniform statewide factor relationship to each other, combined rate level indications and support for such indications on a statewide basis for the total program, together with the supporting data for the proposed factor relationships between each type of policy.
(b)1. The provisions of this subsection shall apply to all rate filings regardless of whether a filing requests rate changes for one, more than one, or all of the types of policies written.
2. This subsection shall not apply if a rate change is filed in response to law changes which relate to specific types of policies.
(4)(a) If the filing adopts a rating organization’s prospective loss costs, the filing shall include Form OIR-B1-583 (pages 1 and 2), “”Florida Expense Supplement Calculation of Insurer Loss Cost Multiplier”” as adopted in Fl. Admin. Code R. 69O-170.0155
(b) An independent rate filing shall include Form OIR-B1-595, “”Florida Expense Supplement for Independent Rate Filings”” as adopted in Fl. Admin. Code R. 69O-170.015
(c) The data shall be on a direct basis.
(d) The data shall identify whether the loss data includes LAE (Loss Adjustment Expense) and/or IBNR (Incurred But Not Reported).
(5)(a) Each rate filing which changes base rates as to any policy for which rates vary by territory shall contain either:
1. Separate support by territory for each type of policy for which a proposed rate change is filed; or
2. If a series of policy types include identical territory relativities, support by territory for all types of policies combined.
(b) The provisions of this subsection shall apply to each territory regardless of whether the rate filing requests rate changes for one, more than one, or all territories.
(6)(a) The earned premiums and incurred losses included in the rate level indications shall include Florida-only data.
(b) An insurer shall prepare separate indications for those policies on an occurrence basis and for those policies on a claims-made basis.
(c) The premium and loss data supporting a rate level indication for policies on an occurrence basis shall be stated on an accident year basis.
(d) The premium and loss data supporting a rate level indication for policies on a claims-made basis shall be stated on a report year basis.
(7) Each rate filing shall include a direct rate based on direct expense factors for the following categories:
(a) Commissions and brokerage;
(b) Other acquisitions expenses;
(c) General expenses;
(d) Premium taxes;
(e) Other taxes, miscellaneous licenses, and fees; and
(f) Any other expenses.
(8)(a) In addition to the direct rate determined in subsection (8), an insurer may elect to include the costs of reinsurance in a rate filing.
(b) Where the insurer elects to do so, the cost of reinsurance shall consider:
1. Reinsurance contracts related to the subject matter of the filing;
2. The amount to be paid to the reinsurer;
3. Ceding commissions to be paid to the insurer by the reinsurer;
4. Expected reinsurance recoveries; and
5. Other relevant information specifically relating to cost such as a retrospective profit sharing agreement between the insurer and the reinsurer.
(9) The use of contingent commissions as supporting data for rate changes is prohibited unless:
(a) There is a contractual arrangement between the insurer and its agents concerning the payment of contingent commissions; and
(b) The insurer demonstrates that it is not paying contingent commissions from profits higher than anticipated in its filings.
Rulemaking Authority Florida Statutes § 624.308(1). Law Implemented 624.307, 627.062, 624.604, 624.605 FS. History-New 10-2-96, Amended 6-19-03, Formerly 4-170.0142, Amended 9-5-07.
(b) This rule does not apply to medical malpractice coverage which is subject to Fl. Admin. Code R. 69O-170.0143 or workers’ compensation insurance as defined in Section 624.605(1)(c), F.S.
(c) For purposes of this rule, reference to commercial residential insurance shall include insurance on the following types of risks:
1. Condominium associations;
2. Homeowners associations;
3. Apartment buildings;
4. Hotels and motels;
5. Dormitories (including sorority and fraternity houses);
6. Boarding houses; and
7. Rooming houses.
(2) The filing submittal requirements in this rule are in addition to the information required by subsection 69O-170.013(3), F.A.C., and shall be included as a required component of the filing made pursuant to subsection 69O-170.013(3), F.A.C.
(3)(a) Each rate filing shall contain either:
1. Separate rate level indications and support for such indications on a statewide basis for each type of coverage which the insurer writes in Florida; or
2. If a series of policy types bear a uniform statewide factor relationship to each other, combined rate level indications and support for such indications on a statewide basis for the total program, together with the supporting data for the proposed factor relationships between each type of policy.
(b)1. The provisions of this subsection shall apply to all rate filings regardless of whether a filing requests rate changes for one, more than one, or all of the types of policies written.
2. This subsection shall not apply if a rate change is filed in response to law changes which relate to specific types of policies.
(4)(a) If the filing adopts a rating organization’s prospective loss costs, the filing shall include Form OIR-B1-583 (pages 1 and 2), “”Florida Expense Supplement Calculation of Insurer Loss Cost Multiplier”” as adopted in Fl. Admin. Code R. 69O-170.0155
(b) An independent rate filing shall include Form OIR-B1-595, “”Florida Expense Supplement for Independent Rate Filings”” as adopted in Fl. Admin. Code R. 69O-170.015
(c) The data shall be on a direct basis.
(d) The data shall identify whether the loss data includes LAE (Loss Adjustment Expense) and/or IBNR (Incurred But Not Reported).
(5)(a) Each rate filing which changes base rates as to any policy for which rates vary by territory shall contain either:
1. Separate support by territory for each type of policy for which a proposed rate change is filed; or
2. If a series of policy types include identical territory relativities, support by territory for all types of policies combined.
(b) The provisions of this subsection shall apply to each territory regardless of whether the rate filing requests rate changes for one, more than one, or all territories.
(6)(a) The earned premiums and incurred losses included in the rate level indications shall include Florida-only data.
(b) An insurer shall prepare separate indications for those policies on an occurrence basis and for those policies on a claims-made basis.
(c) The premium and loss data supporting a rate level indication for policies on an occurrence basis shall be stated on an accident year basis.
(d) The premium and loss data supporting a rate level indication for policies on a claims-made basis shall be stated on a report year basis.
(7) Each rate filing shall include a direct rate based on direct expense factors for the following categories:
(a) Commissions and brokerage;
(b) Other acquisitions expenses;
(c) General expenses;
(d) Premium taxes;
(e) Other taxes, miscellaneous licenses, and fees; and
(f) Any other expenses.
(8)(a) In addition to the direct rate determined in subsection (8), an insurer may elect to include the costs of reinsurance in a rate filing.
(b) Where the insurer elects to do so, the cost of reinsurance shall consider:
1. Reinsurance contracts related to the subject matter of the filing;
2. The amount to be paid to the reinsurer;
3. Ceding commissions to be paid to the insurer by the reinsurer;
4. Expected reinsurance recoveries; and
5. Other relevant information specifically relating to cost such as a retrospective profit sharing agreement between the insurer and the reinsurer.
(9) The use of contingent commissions as supporting data for rate changes is prohibited unless:
(a) There is a contractual arrangement between the insurer and its agents concerning the payment of contingent commissions; and
(b) The insurer demonstrates that it is not paying contingent commissions from profits higher than anticipated in its filings.
Rulemaking Authority Florida Statutes § 624.308(1). Law Implemented 624.307, 627.062, 624.604, 624.605 FS. History-New 10-2-96, Amended 6-19-03, Formerly 4-170.0142, Amended 9-5-07.