1 Product Filing Review Handbook How to Use This Valuable Tool

2 Objectives of this Webinar To acquaint stakeholders in the rate & form filing process with the use of The Product Filing Review Handbook. To provide stakeholders with a broad overview of the rate and form review process. To provide stakeholders with an overview of the System for Electronic Rate and Form Filing (SERFF)

3 History of Rate and Form Regulation Philadelphia Contributionship ▬ First fire insurance company by Benjamin Franklin.

4 History of Rate and Form Regulation McCarran-Ferguson Act ▬ “The Congress hereby declares that the continued regulation and taxation by the states of the business of insurance is in the public interest… No Act of Congress shall be construed to invalidate, impair, or supersede any law enacted by any state for the purpose of regulating the business of insurance…”

5 History of Rate and Form Regulation Today: ▬ States have retained the authority to regulate the insurance industry. ▬ Federal Insurance Office created by the Dodd-Frank Bill.

6 The Filing The FilerRating Laws Rate Standards Filing Data The Reviewer The Filing Process A mechanism for an entity to use in seeking to meet certain requirements of a regulatory authority to obtain eligibility, or some other form of status or approval. Check with your state’s definition.

7 The Filing The Filer The Reviewer Rating Laws Rate Standards Filing Data The Filing Process The party making the filing such as the insurance company, advisory organization, or a third-party is referred to as the “filer.”

8 The Filer The Reviewer Rating Laws Rate Standards Filing DataThe Filing The Filing Process The reviewer analyzes the filing for completeness, compliance with laws and regulations, and any other factors applicable for the type of insurance.

9 Rating Laws Rate Standards Filing DataThe FilerThe Filing The Reviewer P&C Rate Regulation Basics Rating Laws ▬ Prior Approval ▬ File and Use ▬ Use and File ▬ No File (Open competition) ▬ Flex Rating

10 Rate Standards Filing DataThe FilerThe Filing The Reviewer Rating Laws P&C Rate Regulation Basics Rate Standards ▬ Excessive ▬ Inadequate ▬ Unfairly discriminatory

11 Rate Standards Filing Data The FilerThe Filing The Reviewer Rating Laws Filing Data Time Frame (Accident Year, Policy Year, Report Year) Earned Premiums Incurred Losses

12 Rate Standards Filing Data The FilerThe Filing The Reviewer Rating Laws Filing Data Incurred Loss Adjustment Expense Other Expenses Incurred Claims Counts Exposures

13 Regulator Questions Data: ▬ Enough for regulatory review? ▬ Is number of years of experience appropriate? ▬ How good is the quality of the data? Support & Justification: ▬ Are supporting documents reasonable and acceptable? ▬ Are assumptions used to develop the rates appropriate?

14 Glossary of Terms Do you speak “actuarial?”

15 Life and Annuity Regulation Many States do not regulate life insurance premium rates. They rely on competition and market forces. These states review contract provisions and non-forfeiture language.

16 Health Rate Regulation Three types of Health Insurance Disability Income Long Term Care Comprehensive (Major Medical)

17 Comprehensive Medical Insurance Government-sponsored Employer –sponsored Commercial insurance

18 Review Questions for Policy Form Filings Is the policy form an insurance contract? Is the policy form for a legal purpose? Does the policy form contain an acceptable risk transfer? Is the offer made by the filer to the policyholder clear?

19 Is the consideration paid by policyholder clearly spelled out? Does the policy contain clear definitions? Are coverage agreements and limits of liability clearly spelled out? Review Questions for Policy Form Filings

20 Are duties of filer and policy or claimant clearly spelled out? Are coverage limitations or exclusions clearly spelled out? Any unreasonable or deceptive transfers? Are mandated provisions or conditions included? Review Questions for Policy Form Filings

21 Are any prohibited conditions or clauses included? Have readability requirements been met? Are form and contractual language consistent with pricing? Is advertising material consistent with the policy form? Review Questions for Policy Form Filings

22 Speed To Market Tools Uniform Review Standards Checklists Product Requirements Locator Uniform Transmittal Documents Uniform Product Coding Matrices SERFF IIPRC

23 SERFF Features and Functionality My Workfolder General Instructions Submission Requirements Filing Correspondence Objections and Responses Status Options Quick Text PDF Pipeline Electronic Funds Transfer Dispositions Public Access Paper filing Tracking and Disaster Recovery Plans Training/Tutorials

24 Regulatory Data Resources Financial Data Collection ▬ Financial Annual Statements (Resources) I-Site Market Share Reports Report on Profitability by Line and By State Competition Database Report

25 You Be The Judge Has this tool helped you understand how the rate and form approval process works? Do you have a better understanding of tools that are available to make form and filing reviews easier to complete?

26 Ideas? Do you have ideas of ways you can speed insurance products to the market? If so, contact: David Keleher, ARM, CPCU, CIC, AIM Senior Property & Casualty Insurance Specialist, NAIC Office: Fax: