New York Codes, Rules and Regulations › Title 11 - INSURANCE › Chapter V - Rates And Rating Organizations › Subchapter D - Rate Regulation And Promotion Of Competition › Part 161 - Flexible-rating System; Rating Plans; Tort Reform Refiling Requirements › Section 161.8 - Rating plan rules and standards

Current through Register Vol. 46, No. 28, July 10, 2024
For rating plans applicable to commercial risk,
					 professional liability or public entity insurance policies, the following rules
					 and standards shall govern:
(a)
				  Experience rating, schedule rating, IRPM, loss rating, composite rating and
				  retrospective rating plans may be used in the rating of commercial risk,
				  professional liability and public entity insurance policies, and may not be
				  used in rating personal lines policies. Expense reduction plans may be used in
				  connection with commercial and personal lines policies.
(b) Such rating plans shall contain
				  reasonable internal credibility constraints and, for eligibility purposes, may
				  only be used in the rating of risks which would otherwise generate at least the
				  following basic limits premium for the type(s) of insurance addressed by the
				  particular rating plan, except that an indivisibly rated policy shall generate
				  a basic limits premium of at least $3,500 in order to qualify for application
				  of an experience rating, schedule rating or IRPM plan:
(1) Experience Rating
$ 2,500
(2) Schedule Rating
$ 2,500
(3) IRPM
$ 2,500
(4) Expense Reduction
$10,000
(5) Retrospective Rating
$25,000
(c)
				  Such rating plans may also be used in the rating of commercial motor vehicle
				  policies insuring five or more vehicles.
(d) Any rating plan designed to be applied
				  simultaneously to property, liability or other types of coverages shall contain
				  reasonable factors that give appropriate recognition to the distinct exposures
				  involved in such coverages, except that the divisible premium attributable to
				  each of the different coverages involved may not be combined for purposes of
				  determining whether such risk meets the premium thresholds set forth in
				  subdivision (b) of this section.
(e)
(1)
				  Once filed and approved in conformity with this section, the use of an
				  experience rating, schedule rating, IRPM or expense reduction plan shall become
				  mandatory, and shall be applied uniformly in a nondiscriminatory manner for all
				  eligible classes of risk, except that experience rating plans may be applied
				  only when, for the experience period specified in the plan, there is verifiable
				  experience, which the current insurer shall make a good faith effort to obtain.
				  (For example, if an insurer files an experience rating plan applicable to all
				  liability risks with manual premiums over $2,500, then all such risks for which
				  verifiable experience is in fact obtained are to be experience-rated by that
				  insurer, which could not elect to exclude an insured from the plan's provisions
				  nor disregarded the results.)
(2)
				  Every experience rating plan shall set forth the specific procedures that the
				  insurer will employ to obtain and verify experience applicable to each
				  prospective insured, and shall also set forth the specific procedures that the
				  insurer will employ to provide other authorized insurers with the verifiable
				  experience of their own insureds upon the written request of such an insured or
				  its authorized agent or broker.