New York State seal

January 3, 1963

SUBJECT: INSURANCE

WITHDRAWN

Circular Letter 63-1

TO: ALL AUTHORIZED CASUALTY, SURETY, FIRE AND INLAND MARINE INSURERS.

Re: Deviations from Rating Organization Rates, Rules and Forms Under Section 185(4) of the Insurance Law.

I. Submission of Applications for Deviations and Accompanying Data.

Enclosed are copies of forms adopted by this Department to facilitate the processing of applications for approval of uniform percentage deviations from rates of rating organizations.

With respect to deviations in effect, the information indicated by the enclosed forms should be submitted to the Department no later than sixty days prior to the renewal date.

The following information should also be furnished:

1. (a) The number of states in which the applicant is transacting the kind or type of insurance for which a deviation or renewal of deviation is requested and (b) a list of the states in which the company operates at a deviation for such coverage together with the percentage deviation applicable in each state.

2. Where deviations in other states are now in effect, the weighted countrywide deviation of the company as reflected in the detailed data reported for each year and for the five year experience as a whole.

3. A statement showing New York as well as the countrywide experience at current rate levels and explaining how such determination is arrived at.

4. A statement explaining how the expense ratios for New York were derived.

5. For automobile liability insurance a separate exhibit showing for each year as well as for the five year period the loss experience separately for assigned and non-assigned risk business, and the commission ratio for non-assigned risk business.

The applicant may furnish any additional information which it deems pertinent to its application.

Section 185(4) as amended continues the requirement that a copy of the deviation application with specification of the basis for the modification shall be sent to the rating organization concerned at the time it is submitted to this Department.

II. Deviations to be Effective for Longer Than One Year.

Section 185(4) of the Law, as amended effective July 1, 1962, permits approval of deviations for a term exceeding one year.

In general, deviations relating to forms and rules will be approved for a term of years. Such deviations currently relate primarily to fire and allied lines: e.g., Deductible Plans for which deviations will be granted for a period of two years, Agreed Amount Clauses for which the period of deviations will be three years and Replacement Cost Insurance (machinery and equipment and furniture and fixtures) for which the three year period will also apply.

Percentage deviations, when approved, will be limited to one or two years, the term depending upon the past and indicated future record, with emphasis on expense indications as related to expense provisions in the formulae of rating organizations for the coverages involved.

In the event that a deviation is approved for more than one year, this Department may, from time to time during that period, require the submission of data for purposes of interim review.

Very truly yours,

[SIGNATURE]

NEWELL G. ALFORD, JR.

ATTACHMENT

DEVIATION APPLICATION - NEW YORK

Name of Company____________________

#Kind of Insurance___________________% Deviation Applied For

Rating Organization____________________

Date Prepared____________________

(Furnish data for each of last 5 years and total for period)

             
 

19__

19__

19__

 

$ Amount

Ratio

$ Amount

Ratio

$ Amount

Ratio

NET BASIS

           

Loss Experience:

           

   1. Net Premiums

____

xxx

____

xxx

____

xxx

   Written

           

   2. Net Premiums

____

xxx

____

xxx

____

xxx

   Earned

           

   3. Net Losses

____

xxx

____

xxx

____

xxx

   Incurred

           

   4. Loss Ratio

xxx

___%

xxx

___%

xxx

___%

(3/2)

           

Incurred Expenses:

           

 * 5. Loss Adjustment

________________________________________

 ** 6. Commissions

________________________________________

 * 7. Other Acquisition

________________________________________

 * 8. General

________________________________________

 ** 9. Taxes, Licenses

____

 

____

 

____

 

and Fees

           

   10. Total

____

____%

____

____%

____

____%

   Expenses

           

   Incurred ( 5-9)

           

   11. Total Loss & Exp.

xxx

_____%

xxx

_____%

xxx

_____%

   Ratio ( 4 & 10 )

           
             

DIRECT BASIS

           
             

Loss Experience:

           

   1. Direct Premiums

_____

xxx

_____

xxx

_____

xxx

   Written

           

   2. Direct Premiums

_____

xxx

_____

xxx

_____

xxx

   Earned

           

   3. Direct Losses

_____

xxx

_____

xxx

_____

xxx

   Incurred

           

   4. Loss Ratio (3/2)

xxx

_____%

xxx

_____%

xxx

_____%

Incurred Expenses:

           

 * 5. Loss Adjustment

________________________________________

 ** 6. Commissions

________________________________________

 * 7. Other Aquisition

________________________________________

 * 8. General

________________________________________

 ** 9. Taxes, Licenses and

_____

 

_____

 

_____

 

Fees

           
             

   10. Total Expenses

_____

_____%

_____

_____%

_____

_____%

   Incurred (5-9)

           

   11. Total Loss & Exp.

xxx

_____%

xxx

_____%

xxx

_____%

   Ratio (4 & 10)

           

# Indicate if limited to subdivision or class.

* Ratio to earned premiums.

** Ratio to written premiums.

NYRB - 1/3/63 A

(Furnish data for each of last 5 years and total for period)

             
 

19__

19__

5-Year Total

 

$ Amount

Ratio

$ Amount

Ratio

$ Amount

Ratio

NET BASIS

           
             

Loss Experience:

           

   1. Net Premiums

_____

xxx

_____

xxx

_____

xxx

   Written

           

   2. Net Premiums

_____

xxx

_____

xxx

_____

xxx

   Earned

           

   3. Net Losses

_____

xxx

_____

xxx

_____

xxx

   Incurred

           

   4. Loss Ratio

xxx

___%

xxx

___%

xxx

___%

   (3/2)

           
             

Incurred Expenses:

           

 * 5. Loss Adjustment

________________________________________

 ** 6. Commissions

________________________________________

 * 7. Other Acquisition

________________________________________

 * 8. General

________________________________________

 ** 9. Taxes, Licenses and

_____

 

_____

 

_____

 

 fees

           

   10. Total Expenses

_____

_____%

_____

_____%

_____

_____%

   Incurred ( 5-9 )

           

   11. Total Loss &

xxx

_____%

xxx

_____%

xxx

_____%

   Exp. Ratio

           

   ( 4 & 10 )

           
             

DIRECT BASIS

           
             

Loss Experience:

           

   1. Direct Premiums

_____

xxx

_____

xxx

_____

xxx

   Written

           

   2. Direct Premiums

_____

xxx

_____

xxx

_____

xxx

   Earned

           

   3. Direct Losses

_____

xxx

_____

xxx

_____

xxx

   Incurred

           

   4. Loss Ratio

xxx

_____%

xxx

_____%

xxx

_____%

   (3/2)

           

Incurred Expenses:

           

 * 5. Loss Adjustment

________________________________________

 ** 6. Commissions

_____________________________________________

 * 7. Other Aquisition

________________________________________

 * 8. General

________________________________________

 ** 9. Taxes, Licenses and

_____

 

_____

 

_____

 

Fees

           
             

   10. Total Expenses

_____

_____%

_____

_____%

_____

_____%

   Incurred

           

   (5-9)

           

   11. Total Loss &

xxx

_____%

xxx

_____%

xxx

_____%

   Exp. Ratio

           

   (4 & 10)

           

# Indicate if limited to subdivision or class.

* Ratio to earned premiums.

** Ratio to written premiums.

NYRB - 1/3/63 A

DEVIATION APPLICATION - NATIONWIDE EXPERINCE

Name of Company____________________

#Kind of Insurance_____________________________% Deviation Applied For

Rating Organization____________________

Date Prepared____________________

(Furnish data for each of last 5 years and total for period)

             
 

19__

19__

19__

 

$ Amount

Ratio

$ Amount

Ratio

$ Amount

Ratio

NET BASIS

           
             

Loss Experience:

           

   1. Net Premiums Written

_____

xxx

_____

xxx

_____

xxx

   2. Net Premiums Earned

_____

xxx

_____

xxx

_____

xxx

   3. Net Losses Incurred

_____

xxx

_____

xxx

_____

xxx

   4. Loss Ratio (3/2)

xxx

_____%

xxx

_____%

xxx

_____%

             

Incurred Expenses:

           

 * 5. Loss Adjustment

________________________________________

 ** 6. Commissions

________________________________________

 * 7. Other Acquisition

________________________________________

 * 8. General

________________________________________

 ** 9. Taxes, Licenses and

_____

 

_____

 

_____

 

Fees

           

   10. Total Expenses

_____

_____%

_____

_____%

_____

_____%

   Incurred (5 - 9)

           

   11. Total Loss & Exp.

xxx

_____%

xxx

_____%

xxx

_____%

   Ratio (4 & 10)

           
             

DIRECT BASIS

           
             

Loss Experience:

           

   1. Direct Premiums

_____

xxx

_____

xxx

_____

xxx

   Written

           

   2. Direct Premiums

_____

xxx

_____

xxx

_____

xxx

   2Earned

           

   3. Direct LossesIncurred

_____

xxx

_____

xxx

_____

xxx

   Incurred

           

   4. Loss Ratio

xxx

_____%

xxx

_____%

xxx

_____%

   (3/2)

           
             

Incurred Expenses:

           

 * 5. Loss Adjustment

________________________________________

 ** 6. Commissions

________________________________________

 * 7. Other Acquisition

________________________________________

 * 8. General

________________________________________

 ** 9. Taxes, Licenses and

_____

 

_____

 

_____

 

 Fees

           

   10. Total Expenses

_____

_____%

_____

_____%

_____

_____%

   Incurred (5 - 9 )

           

   11. Total Loss & Exp.

xxx

_____%

xxx

_____%

xxx

_____%

   Ratio (4 & 10)

           

# Indicate if limited to subdivision or class.

* Ratio to earned premiums.

** Ratio to written premiums.

NYRB - 1/3/63 B

(Furnish data for each of last 5 years and total for period)

             
 

19__

19__

5-Year Total

 

$ Amount

Ratio

$ Amount

Ratio

$ Amount

Ratio

NET BASIS

           
             

Loss Experience:

           

   1. Net Premiums

_____

xxx

_____

xxx

_____

xxx

   Written

           

   2. Net Premiums

_____

xxx

_____

xxx

_____

xxx

   Earned

           

   3. Net Losses

_____

xxx

_____

xxx

_____

xxx

   Incurred

           

   4. Loss Ratio

xxx

_____%

xxx

_____%

xxx

_____%

   (3/2)

           
             

Incurred Expenses:

           

 * 5. Loss Adjustment

________________________________________

 ** 6. Commissions

________________________________________

 * 7. Other Acquisition

________________________________________

 * 8. General

________________________________________

 ** 9. Taxes, Licenses and

_____

 

_____

 

_____

 

Fees

           

Fees

           

   10. Total Expenses

_____

_____%

_____

_____%

_____

_____%

   Incurred (5 - 9)

           

   11. Total Loss & Exp.

xxx

_____%

xxx

_____%

xxx

_____%

   Ratio (4 & 10)

           
             

DIRECT BASIS

           
             

Loss Experience:

           

   1. Direct Premiums

_____

xxx

_____

xxx

_____

xxx

   Written

           

   2. Direct Premiums

_____

xxx

_____

xxx

_____

xxx

   Earned

           

   3. Direct Losses

_____

xxx

_____

xxx

_____

xxx

   Incurred

           

   4. Loss Ratio

xxx

_____%

xxx

_____%

xxx

_____%

   (3/2)

           
             

Incurred Expenses:

           

 * 5. Loss Adjustment

________________________________________

 ** 6. Commissions

________________________________________

 * 7. Other Acquisition

________________________________________

 * 8. General

________________________________________

 ** 9. Taxes, Licenses and

_____

 

_____

 

_____

 

 Fees

           

   10. Total Expenses

_____

_____%

_____

_____%

_____

_____%

   Incurred (5 - 9 )

           

   11. Total Loss & Exp.

xxx

_____%

xxx

_____%

xxx

_____%

   Ratio (4 & 10)

           

# Indicate if limited to subdivision or class.

* Ratio to earned premiums.

** Ratio to written premiums.

NYRB - 1/3/63 B