Personal Automobile Insurance
The Personal Automobile Rate Filing Instructions detail specific requirements unique to submitting a personal automobile insurance rate filing. Note that these revised instructions apply to all personal automobile insurance rate filings – i.e., all filings of NAIC type of insurance (TOI) 19.0. This includes the following sub-types of insurance (sub-TOIs):
- 19.0000: Personal Auto Combinations
- 19.0001: Private Passenger Auto (PPA)
- 19.0002: Motorcycle
- 19.0003: Recreational Vehicle (RV)
- 19.0004: Other
Rate filings received without complete information or with information missing from its requested places within the filing will be deemed incomplete pending submission of all required information. Filings will be disapproved if missing information is not submitted within 45 days.
For each of the following items, if the company has filed the item via SERFF after January 5, 2011, and the item has not changed since the time of its filing, the company may refer to the Nevada state tracking number and approval date of the relevant filing and state that nothing has changed. If any changes have occurred to the information in the following items, the company should describe the changes.
- Credit Scoring Statement (See Item J below.)
- Chargeable Accidents Statement (See Item K below.)
- Stacking/Non-Stacking Statement (See Item L below.)
- Coverage Limitations (See Item M below.)
- Alternative Dispute Resolution (ADR) Statement (See Item N below.)
- Nevada Evidence of Motor Vehicle Liability Insurance Card (See Item O below.)
- Notice Explaining Premium Increases (See Item P below.)
Any filing of rates for personal automobile insurance must be submitted to the Division with the following information.
All insurers are required to submit these filings electronically through SERFF.
- Cover letter and/or filing memorandum which summarizes the filing or a complete description within the “Filing Description” field in SERFF.
- Index of all exhibits and an explanation of their purpose.
- Balance of filing. See Nevada Bulletin 10-010 for additional requirements.
- Rate Filing Data Summary Worksheets. Note that these have been recently revised to allow for the more convenient reporting of information that will expedite filing review.
- Rate Disruption Analysis. Give the number of insureds receiving rate increases and decreases in 5% increments (e.g., 20 insureds will receive a 0%-5% increase, 30 insureds will receive a 5%-10% increase, etc.). Include the dollar amount of the largest increase and the characteristics of the insured who would receive that increase. Also include the largest percentage increase and the characteristics of the insured who would receive that increase.
- Profitability Report. Provide a Profitability Report containing information pertaining to the past 3 to 5 years of Nevada experience only. The report must state the valuation date of losses and define the experience period as ending month, date, and year. Please refer to an Example here.
- Investment Income Report. The report needs to translate investment income on policyholder funds into a percentage of earned premium, with separate derivations for liability coverages and physical damage coverages. Policyholder funds are defined as the unearned premium reserve and the loss reserve.
- Discounts. Companies need to list all discounts and a reference to the manual page describing the discount. Example: Passive restraint is rule number 7 found on page 23 and gives a 10% discount for vehicles equipped with automatic seatbelts.
- Credit Scoring Statement. If the company uses credit-based insurance scoring (CBIS) in any manner relating to this program, please provide the following:
- The name of the CBIS model being used and the name of the entity that developed the model;
- If the CBIS model has previously been filed by the company via SERFF during or after June 2009, the Nevada state tracking number and approval date of the SERFF filing in which the model was submitted;
- If the model has not been previously filed via SERFF or was filed prior to June 2009, a copy of the CBIS model and all relevant explanatory documentation (note that this also applies in cases where the model was previously submitted in a paper filing);
- A statement on the number of rating tiers and the approximate rating difference from one tier to the next;
- If any rating factors rely on both credit and non-credit variables, an explanation of what items besides credit are included and the manner in which these items are treated;
- If any score is considered unacceptable and will result in an initial refusal or nonrenewal, an explanation of the criteria on which such a decision would be made.
- Chargeable-Accidents Statement. Attach a copy of the current chargeable-accident rule filed pursuant to NAC 687B.850. Include a statement to justify the dollar-amount threshold for a chargeable accident.
- Stacking/Non-Stacking Statement. State whether UM/UIM and Medical Payments coverage limits are stacked or non-stacked. If the limits are non-stacked, supply the date when the rates and forms introducing non-stacking were first filed. Also, verify whether any stacked claims have been paid between the initial filing date mentioned above and the date of the current filing.
- Coverage Limitations. A list of coverage limitations by time limit and by inter-coverage offset. Examples:
- Medical payments expenses are for services actually rendered within 3 years from the date of accident.
- Non-duplication of benefits under medical payments and UM-UIM coverages.
- A statement on the use of Alternative Dispute Resolution (ADR) programs, such as mediation and arbitration, including:
- A copy of your current NEVADA EVIDENCE OF MOTOR VEHICLE LIABILITY INSURANCE card. Please note: Evidence of Insurance cards must meet the requirements in NRS 690B.023 and NAC 690B.060.
- UM/UIM and Medical Payments Selection/Rejection Form. A copy of the form(s) used to offer uninsured/underinsured motorists and medical payments coverage.
If your company's UM/UIM and Medical Payments Selection/Rejection Form has previously been filed within SERFF, and has not changed since the time of its filing, the company may refer to the Nevada state tracking number and approval date of the relevant filing and state that nothing has changed. Note that this applies to forms previously filed in SERFF only. Any form previously only filed in paper format must be submitted in the filing. If the company is proposing any changes to the form with this filing, then the proposed new version of the form must also be submitted in the filing.
- Notice Explaining Premium Increases. Notice sent to insureds pursuant to NAC 690B.240, explaining the manner in which the rating plan provides for an increase in premium based on incidents or claims. At the minimum, this notice should include the items outlined in the attached example. The notice should include specific quantitative information and/or a thorough qualitative description regarding how incidents and claims may impact auto insurance premium.
NOTE: Sample tables are included for reference purposes only.
This requirement is only applicable to private passenger automobile (PPA) insurance (sub-TOI 19.0001) and any programs incorporating PPA insurance (some programs under sub-TOI 19.0000).
- Other Exhibits. Exhibits should include, but are not limited to, actuarial models utilized; models of credibility; development of trend factors, relativities, loss development triangles, loss development factors, permissible loss ratios, indications, etc.
- The Company Rate Information section of the Rate/Rule Schedule within SERFF should be filled out for every personal automobile rate filing which is not a new program filing, even if the overall rate change due to the filing is 0%.
- If you have any questions or concerns with regard to the rate filing instructions, please call the Division's Property and Casualty Section at (775) 687-0773 or send an e-mail to firstname.lastname@example.org.
NOTE: These instructions represent the minimum requirements by the Division for a rate filing. Many companies currently provide more detail in several of the required exhibits, and the Division would like this to continue. The Division urges companies that are not sure about a particular form or exhibit to call or email for more explicit instructions.
Recommendations to Expedite Filing Review
In addition to the Property and Casualty Section's filing requirements, there are measures that insurers can take to structure a filing so as to increase the speed of its review and reduce the need for reviewers to ask clarification questions and make requests of a clerical nature. These measures include the following:
- Submit searchable PDF files in SERFF. Do not submit scanned PDF documents where individual words and phrases cannot be located via a search function.
- Give names and page numbers to all exhibits created by the company. This allows for fast, easy referencing of these exhibits in filing correspondence.
- DYA. YWBAQIYDN.*
* Define your acronyms. You will be asked questions if you do not.
- If information within a form or a rate/rule manual is changing, it is recommended that the company provide a red-lined version of the form or manual and/or a side-by-side comparison of the current and proposed versions of each document. This enables reviewers to focus on the aspects of the documents that the company intends to change as a result of the filing.
- Any exhibits showing relativities derived on the basis of loss ratios, pure premium, or similar figures should also show the underlying loss/premium and/or frequency/severity figures that led to the derivation of the relativities. If the company can provide figures derived from direct empirical observation (e.g., actual written and earned premium, actual reported and paid losses, actual numbers of exposures and claims), this lends additional credence to the exhibits in which such figures are employed as part of actuarial techniques used to arrive at the company's rate recommendation.
- Any figures which were derived via multivariate analysis should be accompanied by an explanation of the multivariate technique(s) used. This may include, but is not limited to, the name(s) of the technique(s), the underlying formulas, a description of the steps involved, and a discussion of the intended effects of the technique(s).
- Where feasible, provide the underlying formulas used in the calculation or derivation of various exhibit columns.
- The company should double-check all calculations in the filing for accuracy. Also, if the same figures are used in multiple exhibits, it is important that the figures reconcile with one another. An internally inconsistent filing will result in questions from the reviewer.
- The company should ensure that all filings are free from substantive typographical or grammatical errors that could result in misinterpretation of the intent behind any document in the filing.
- In filing correspondence, providing specific answers for specific questions will expedite the resolution of Division staff's concerns.
- Companies with specific information technology (IT) or other deadlines may want to consider submitting their filings well in advance of such deadlines, to ensure sufficient time for addressing any concerns and requests regarding the filings. It would also be useful for such timelines to be mentioned within the initial filing documentation.
- When submitting revised or corrected documents, the company should ensure that the attachments being submitted actually incorporate the revisions.