Insurance Circular Letter No. 1 (1963): Deviations from Rating Organization Rates, Rules and Forms Under Section 185(4) of the Insurance Law - WITHDRAWN

January 3, 1963

SUBJECT: INSURANCE

Circular Letter 63-1

WITHDRAWN

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 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 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 Acquisition	________________________________________
* 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 Losses Incurred	_____	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

Translation Services