Commercial property and liability rate filings

Issued and entered June 30, 1994 by David J. Dykhouse, Commissioner of Insurance

By Bulletin 88-05, in an effort to streamline the filing process for insurers, the Commissioner of Insurance (Commissioner) announced the development of a property and liability insurance filing procedures manual that contains a complete set of forms with instructions for all types of property and liability insurance filings. This manual has been very useful in helping insurers understand the Bureau's filing requirements, and in allowing for the expedient processing of the numerous filings received by the Bureau on a daily basis. The Commissioner has determined, however, that there are additional ways in which the process can be made even more expedient.

FORM AND RATE FILINGS

In reviewing the current filing process it has been determined that some of the information sought in certain of the forms contained in the manual is available to the Michigan Insurance Bureau through a variety of other means. For example, the Bureau receives information from insurers through its annual surveys of the marketplace, and through requests to insurers. Information is also provided through the filing of annual financial statements pursuant to Section 438 of the Insurance Code of 1956, as amended, MCLA 500.438, and through examinations conducted by the Bureau.

Accordingly, after considering the factors identified in R 500.641 of the 1979 Administrative Code, the Commissioner has determined that certain of the information required by the property and liability insurance filing procedures manual to support filings for commercial lines is neither necessary nor desirable. The Commissioner, therefore, has determined that the following filing forms are no longer mandatory for inclusion with commercial lines filings:

INS 752 through INS 758

INS 761 through INS 771

INS 776 through INS 778

INS 780

INS 783

INS 784 through INS 788

Please note that the elimination of the filing requirement is for commercial property and casualty lines only. INS 780, 783, and 784 through 788 are still required to be filed in connection with title insurance filings as well as all personal lines filings. Further, the elimination of the filing requirement does not apply to filings submitted by rating organizations or advisory organizations.

The above changes require a change with regard to those filings consisting of both rates and forms, known as "combination filings." Effective immediately, such combination filings will no longer be accepted for the lines affected by the above change in procedure. Therefore, commercial filings which include rates and do not contain the filing forms listed above may not include policy forms in the same filing. Commercial rates and policy forms may be submitted at the same time, but must be prepared as two separate filings.

LOSS COST FILINGS

Another way in which the filing process can be improved is in the area of loss cost documents and related filings. Under current filing procedures, whenever an advisory organization files a new loss cost document with the Bureau, all companies adopting that document must make a filing to that effect, together with the multiplier they will be using.

In an effort to eliminate the paperwork involved in this requirement, the Commissioner has determined that, effective immediately, after a company's initial loss cost filing, filings will only be required if an insurer chooses not to adopt the new loss cost document or chooses not to accept the advisory organization's effective date. Further, any multiplier on file will remain on file, and will apply to any new loss cost document, until the insurer files a different multiplier.

This bulletin affects only the specific supporting documentation mentioned above for the lines specified and does not relieve insurers of their obligation to file all rates, rating plans and rules. Pursuant to the provisions of Chapters 24 and 26 of the Code, Bureau staff may consider it necessary to view supporting documentation for a particular filing and may request that the above forms be submitted. Accordingly, insurers will be expected to maintain data sufficient to provide support for their filings should they be requested to do so by the Commissioner.

THIS BULLETIN IS INCORPORATED AS A PART OF THE FILING INSTRUCTIONS CONTAINED IN THE PROPERTY AND LIABILITY INSURANCE FILING PROCEDURES MANUAL AND SHOULD BE KEPT WITH THAT MANUAL.

Any questions regarding this bulletin should be addressed to the Commercial Market Standards Division, Michigan Insurance Bureau, P.O. Box 30220, Lansing, Michigan 48909, (517) 373-0242.

The Commissioner retains the authority to issue such further orders or bulletins as he shall deem necessary and appropriate.