A.I. 23 (2001-2002)
IN THE MATTER OF THE AUTOMOBILE
INSURANCE ACT, CHAPTER A - 22,
R.S.N. 1990
AND
IN THE MATTER OF AN APPLICATION BY
Traders
General Insurance Company
TO IMPLEMENT REVISED RATES FOR ITS
PRIVATE PASSENGER CLASS OF BUSINESS.
WHEREAS,
by application received February 1, 2001, Traders General Insurance Company
applied to the Board for approval to implement a revised rating program for its
Private Passenger class of business, and
WHEREAS
upon preliminary review, it was determined that a number of the proposed or
adjusted proposed base rates did not conform with the 2001 benchmark rate
ranges of acceptable rates, and
WHEREAS the applicant has submitted actuarial analysis in support of the establishment of rates which do not conform with the benchmark rate ranges of acceptable rates, and
WHEREAS the Board has submitted the filing to its
actuaries for review and analysis and a report on the actuarial analysis
submitted in support of the establishment of rates that do not conform with the
benchmark rate ranges of acceptable rates, and
WHEREAS, on May 7, 2001, the Board received the report
from its actuaries with respect to the filing of Traders General Insurance
Company, and
WHEREAS the report concludes for those rates outside
the benchmarks, the proposed rates are equal to the indicated rate
changes. However, the indicated rate
changes may be understated due to the application of a 25% group adjustment
factor to the industry indications in the filing, and
WHEREAS the company used a group adjustment factor of
90% in its previous rate filing and
WHEREAS the Board is not satisfied that a 25% group
adjustment factor is appropriate, and
WHEREAS the Board, having permitted the use of a 90%
group adjustment factor in Traders’ previous rate filing, will allow the use of
the same factor in the current rate filing, and
WHEREAS the requirements set out in the Board’s 2001
Filing Instructions issued November 2000 require companies to justify those
rates not conforming with the Benchmarks with reasonable actuarial analysis of
the company’s experience in Newfoundland and Labrador, and
WHEREAS the Board’s actuaries have advised the Board
of the rates outside the Benchmarks supported by the filing, and the use of a
90% group adjustment factor, and
WHEREAS the Board, after due examination and analysis
of the proposed rating program, and after consideration of the Actuarial
Consultants’ report on the filing and advice of staff, finds that it should not
be approved as submitted, and
WHEREAS the Board requires all companies to file rates
in accordance with the 2001 Benchmark ranges and Filing Instructions and to
justify those rates not conforming with the 2001 Benchmarks.
IT
IS THEREFORE ORDERED THAT:
1.
Order No. A.I. 59 (1998-99) be
and it is hereby rescinded.
2.
The
non-Benchmark rates proposed in the filing by Traders General Insurance Company
are not approved.
3.
The following base rates are hereby approved
for use by the company:
|
Territory |
1 |
2 |
3 |
|
Third
Party |
$ 966.00 |
$ 516.00 |
$ 359.00 |
|
Collision |
214.00 |
225.00 |
222.00 |
|
Comprehensive |
122.00 |
97.00 |
116.00 |
|
All
Perils |
293.00 |
288.00 |
297.00 |
|
Specified
Perils |
40.00 |
23.00 |
19.00 |
|
Accident
Benefits |
105.00 |
105.00 |
105.00 |
|
Uninsured
Motorist |
21.00 |
12.00 |
8.00 |
and differentials as submitted
with this filing.
4. The following discounts are approved
for use subject to the eligibility criteria set out in the company=s underwriting manual:
|
i. |
multi-vehicle |
10% |
third party liability, collision, accident
benefits, & uninsured motorist |
|
ii. |
mature driver |
10% |
third party liability, collision, accident
benefits, uninsured motorist, comprehensive, & specified perils |
|
iii. |
student |
50% |
third party liability & collision, |
|
iv. |
package |
10% |
third party liability, collision, comprehensive,
specified perils, & accident benefits |
|
v. |
short-commute |
10% |
class 02: third
party liability, collision, uninsured motorist, & accident benefits |
|
vi. |
preferred driver |
10% |
third party liability, collision, comprehensive,
specified perils, uninsured motorist, & accident benefits |
5.
The
rates established by way of this Order are to be
implemented on June
1, 2001 for new business and no later than August 1, 2001 for renewals.
6.
Traders General Insurance Company shall file
with the Board no later than June 15, 2001 revised rate pages developed
utilizing the base rates approved in this order and the differentials as
submitted with the filing received February 1, 2001.
Dated at St. John's, Newfoundland, this 16th day of May, 2001.
Robert Noseworthy
Chairperson &
Chief Executive Officer
Darlene Whalen,
P.Eng.
Vice-Chairperson
Barbara Thistle
Assistant Board Secretary