North Carolina Administrative Code › Title 11 - INSURANCE › Chapter 10 - PROPERTY AND CASUALTY DIVISION › Section .1600 - PROSPECTIVE LOSS COSTS FILINGS › Section 10 .1603 - RATE AND LOSS COSTS

Current through Register Vol. 39, No. 2, July 15, 2024
(a) A rating
				organization may develop and file a reference filing with the Department, which
				filing shall contain the advisory prospective loss costs, the underlying loss
				data, and other supporting statistical and actuarial information for any
				calculations or assumptions underlying those loss costs.
(b) After a reference filing has been made
				with the Department and determined by the Commissioner to be proper, the rating
				organization shall provide its participating insurers with a copy of the
				reference filing.
(c) A rating
				organization may print and distribute manuals of prospective loss costs, as
				well as supplementary rating information as described in
				11 NCAC
				10 .1604. After an initial prospective loss
				costs reference filing has been made by a rating organization and has been
				determined by the Commissioner to be proper, that rating organization shall no
				longer file any minimum premiums in this State.
(d) Each insurer must individually determine
				the final rates it will file and the effective date of any rate changes through
				an independent company decision-making process.
(e) If an insurer that is a member,
				subscriber, or service purchaser of a rating organization decides to use the
				prospective loss costs in a proper reference filing in support of its own
				filing, the insurer must submit a proper rate filing in accordance with
				11 NCAC
				10 .1107. In that filing, the insurer shall
				provide justification for the loss cost multipliers used in producing the final
				rates. The insurer's rates are the combination of the prospective loss costs
				and the insurer's loss cost multipliers.
(f) If an insurer files a modification of the
				prospective loss costs in a proper reference filing based on its own
				anticipated experience, supporting documentation shall be required.
(g) An insurer may vary expense loads by
				individual classification, grouping or subline of insurance. An insurer may use
				variable or fixed expense loadings or a combination of these to establish its
				expense loadings.
(h) If an insurer
				wishes to use a minimum premium of any type, a proper rate filing must be
				submitted to the Department.
(i) An
				insurer may file such other information that it deems to be relevant and shall
				provide such other information that is requested by the Department.
(j) An insurer may have its loss costs
				multiplier remain on file with the Department and reference all subsequent
				prospective loss costs reference filings. Upon receipt of subsequent rating
				organization reference filings, the insurer's rates shall be the combination of
				the prospective loss costs and the loss cost multiplier on file with the
				Department, and will be effective on or after the effective date of the
				prospective loss costs. The insurer need not file anything further with the
				Department.
(k) If an insurer that
				has filed to have its loss costs multiplier remain on file with the Department
				intends to delay, modify, or not adopt a particular rating organization's
				reference filing, the insurer must make a filing with the Department before the
				effective date of the reference filing.
(l) To the extent that an insurer's final
				rates are determined solely by applying its loss costs multiplier to the
				prospective loss costs contained in a rating organization's reference filing
				and printed in the rating organization's manual, the insurer need not develop
				or file its final rate pages with the Department.
(m) If an insurer has filed to have its loss
				cost multiplier remain on file, applicable to subsequent reference filings, and
				a new proper reference filing is filed:
(1)
				If the insurer decides to use the prospective loss costs and effective date as
				filed, the insurer shall not file anything with the Department. The insurer's
				rates shall be the combination of the prospective loss costs and the on-file
				loss cost multiplier. The new rates shall become effective on the effective
				date of the loss costs.
(2) If the
				insurer decides to use the prospective loss costs as filed, but with a
				different effective date, the insurer must notify the Department of its
				effective date before the effective date of the loss costs.
(3) If the insurer decides to use the
				prospective loss costs, but wishes to change its loss cost multiplier, the
				insurer must make another filing in accordance with Paragraphs (d) through (f)
				of this Rule before the effective date of the loss costs.
(4) If the insurer decides not to revise its
				rates using the prospective loss costs, the insurer must notify the Department
				before the effective date of the loss costs.