A.I. 71 (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
THE FACILITY ASSOCIATION
FOR
APPROVAL OF REVISED PRIVATE PASSENGER,
SNOW
VEHICLE, MOTORCYCLE, AND ATV RATING PROGRAMS
WHEREAS
by application, received May 15, 2001, the Facility Association applied to the
Board for approval of revised rating
programs for its Private Passenger, Snow Vehicle, Motorcycle, and ATV classes
of business, and
WHEREAS, on May 15, 2001, a copy of the rating programs were provided to the Board’s Actuarial Consultants, MMC Enterprise Risk Consulting Limited of Toronto, Ontario, who were asked to express an actuarial opinion as to the reasonableness of the rates established, on the basis of the actuarial information supplied in support of the rating programs, and
WHEREAS, on October 17, 2001, the Board received the report of its Actuarial Consultants advising that the proposed rating programs for Snow Vehicle, Motorcycle, and ATV classes of business were reasonably supported, and that the requested rate change of 13.2% for the Private Passenger automobile insurance rating program would exceed the overall rate-level needs of The Facility Association, and
WHEREAS,
the report further found that the rate-level change supported by the filing
information was 8.1%, broken down as follows by coverage:
|
Third
Party Liability |
+ 11.2% |
|
Accident
Benefits |
-35.3% |
|
Uninsured
Automobile |
100.0% |
|
Collision |
0.3% |
|
Comprehensive |
-29.0% |
|
Specified
Perils |
-33.1% |
and,
WHEREAS, following receipt
of comments by the Facility Association on the actuarial report, the Board
deemed it appropriate that the rate change be adjusted to reflect the time
interval between the making of the application and the implementation date of
the proposed
rating programs, and that this time interval
necessitated an adjustment of +1.9% to the overall rate change with indicated
rate changes as follows:
|
Third
Party Liability |
+ 13.6% |
|
Accident
Benefits |
-34.2% |
|
Uninsured
Automobile |
100.0% |
|
Collision |
-0.2% |
|
Comprehensive |
-30.2% |
|
Specified
Perils |
-33.1% |
|
Overall
Rate Change |
+10.0% |
and,
WHEREAS, the Board has reviewed the remaining comments of The Facility Association, and is of the opinion that the issues addressed therein have been adequately addressed by the Actuarial Consultants in response to the inquiries, and in response to general inquires and comments respecting the 2002 Benchmark analysis, and
WHEREAS, the Board has considered all information before it and the advice of staff.
IT IS THEREFORE ORDERED THAT:
1.
The rating program proposed by The Facility
Association on May 15, 2001 in relation to its Snow Vehicle, Motorcycle, and
ATV Class of business be and it is hereby approved.
2.
The Private Passenger automobile insurance
rating program submitted by The Facility Association on May 15, 2001 be and it
is hereby amended to reflect an overall rate increase of 10%, comprised of the
following:
|
Third
Party Liability |
+ 13.6% |
|
Accident
Benefits |
-34.2% |
|
Uninsured
Automobile |
100.0% |
|
Collision |
-0.2% |
|
Comprehensive |
-30.2% |
|
Specified
Perils |
-33.1% |
with distribution across the three rating territories using the same distribution weights as contained in the May 15, 2001 filing.
3.
The rates established for the Snow Vehicle,
Motorcycle, and ATV classes of business and the rating program for Private
Passenger vehicle, as adjusted by this Order, are to be effective May 1, 2002
for both new business and renewals.
Dated at St. John's, Newfoundland, this 13th day of December, 2001.
Robert Noseworthy
Chairperson &
Chief Executive Officer
Darlene Whalen,
P.Eng.
Vice-Chairperson
Cheryl Blundon
Board Secretary