Texas Administrative Code › Title 28 - INSURANCE › Part 1 - TEXAS DEPARTMENT OF INSURANCE › Chapter 5 - PROPERTY AND CASUALTY INSURANCE › Subchapter M - FILING REQUIREMENTS › Division 6 - FILINGS MADE EASY - REQUIREMENTS FOR RATE AND RULE FILINGS › Section 5.9332 - Categories of Supporting Information

Current through Reg. 49, No. 28; July 12, 2024
The categories of supporting information addressed in
						this section describe the different items that may be required or requested in
						a rate and rule filing. Section
						5.9334 of this title (relating to
						Requirements for Rate and Rule Filing Submissions) lists the categories of
						supporting information that different rate and rule filings require. Categories
						of supporting information include:
(1)
					 Rate filing checklists. These are found in the Filings Made Easy Guide and show
					 the information filers need to include with the filing.
(2) Actuarial memorandum. This memorandum
					 describes the methodologies for determining each component used in developing
					 the actuarial support, and a qualitative discussion on the selections for each
					 component. It includes an explanation for any changes in methodologies or any
					 changes to the component selections from the previous analysis.
(3) Actuarial support. This type of support
					 consists of sufficient documentation and analysis to allow a qualified actuary
					 to understand and evaluate the rates, each component used in developing the
					 rates, and the appropriateness of each material assumption. Actuarial support
					 is divided into the following subcategories:
(A) Rate indications consist of the analyses
					 the insurer relies on to support its filed rates, each component used to
					 develop the rate indications, and support for each of these components,
					 including the data and methodologies used by the insurer. Rate indications may
					 be on an overall basis or by coverage, class, form, or peril when appropriate.
					 Rate indications must include each of the following with documentation in
					 support of each, to the extent applicable:
(i)
					 premiums, on-level factors, and premiums at current rate level;
(ii) incurred and paid losses;
(iii) loss and claim development
					 factors;
(iv) premium and loss
					 trend factors;
(v) hurricane and
					 nonhurricane catastrophe factors or loss provisions, including the definition
					 of a catastrophe and how the definition has changed over the experience period
					 used to calculate the provisions;
(vi) off-balance factors if there are changes
					 in relativities, for example: discounts, surcharges, or territorial
					 definitions;
(vii) the measure of
					 credibility, the complement of credibility, the criteria for full credibility,
					 and the method for determining partial credibility;
(viii) expenses, including: general expenses;
					 other acquisition expenses; commissions and brokerage expenses; taxes,
					 licenses, and fees; loss adjustment expenses; and expense offsets from fee
					 income;
(ix) the net cost of
					 reinsurance;
(x) for rates filed
					 under Insurance Code Chapter 2251, concerning Rates, profit provisions,
					 including risk loads;
(xi) for
					 rates filed under Insurance Code Chapters 2053, concerning Rates for Workers'
					 Compensation Insurance, and 3502, concerning Mortgage Guaranty Insurance,
					 profit and contingency provisions, including risk loads;
(xii) the effect on premiums of individual
					 risk variations based on loss or expense considerations; and
(xiii) any other component used in developing
					 a rate indication.