1 Robert Lindquist- President Lindquist and Associates Casualty Actuarial Society Ratemaking Seminar March Tampa Fla. Regulatory Topic #37 Rate Filing Requirements

2 Property and Casualty Rates From Florida Perspective Rates/Rules/Forms/ Underwriting Guide Personal Property- H.O., M.H.O., D.F.

3 Structure/Environment Insurance Commissioner- Currently Elected. Also Treasurer, State Fire Marshall, Cabinet. –Future, merged with Comptroller. Head will be State Chief Financial Officer

4 Major Companies/Results –See Attached- MRKT Share by Line, L/R Results, Complaint Ratio –DI Attached, Direct Profit/Loss Statement by Line Detailed

5 Structure/Environment F.I.C.-Lobbying, Rade Musulin F.H.C.F.- Florida Hurricane Catastrophe Fund –Personal Property, Commercial Residential –90%, 75%, 45% –Cov. A+B+C, D? –Payout 1 out of 7 yrs. –Andy Rappaport –Jack Nicholson

6 Primary Statutes 1. Personal Automobile F.S. 2. Workers Compensation F.S. 3. All Other F.S.

F.S.- Rate Standards -Accepted Actuarial Techniques -90 day Deemer -Components -File/Use or Use/File -Excessive/Inadequate/Unfairly Discriminatory -Catastrophe -Underwriting Expenses -Indications, 5 yrs. Cal./Acc. Yr. data -Recourse (s)

8 Supporting Statutes ; F.H.C.F., Use of Models ; Construction; 3/03 - ; Building Code - ; Separate Hurricane /Non-Hurr. Rates ; Sprinkler Credits ; Hurricane Deductibles ; Annual Rate Filings

9 Supporting Ad. Rules Filing Procedures Rate Manual Filings Annual Rate Filings Investment Income

10 Supporting Ad. Rules- Cont Homeowners Rate Making (Attached) - Direct - Fla. Data - # Filing Copies - Applicable Forms - Indications vs. Support

11 Filing Format - 3 copies to the Fla. D.O.I. - Cover page Memo/Shirley Kerns Bureau Chief - Consultant, Letter of Authorization

12 Filing Forms DI4-582 (Basic) Separate coverage forms from Rules/Rates/U.W. One (1) Line per filing. File/Use or Use/File Proposed Effective date(s) –45 days Renewal

13 Filing Forms- cont. DI4-583; Use for adoption of I.S.O. Loss Costs (Not Rules) ; Calculation of Deviation ; Calculation of L.C.M. ; Minimum Premium/Return Premium

14 Filing Forms- cont. DI4-585-Certification DI4-586-Annual Rate Filing Certification DI4-584-Exemption to Annual Rate Filing

15 Filing Forms- cont. DI Expense Supplement for Independent Filings - E.L.R. - U.W. profit - Net cost of reinsurance - Private - F.H.C.F.

16 Detailed Filing Memorandum Summarize Indexed Filing Material. Cross Reference Exhibits

17 Indexed Filing Material (i.e.) - Indications - I.B.N.R. Factors - Catastrophe Factor(s) Development - Rate Comparisons (Attached)

18 Indexed Filing Material – cont. - Other filings “me too” - U.L.A.E. Support (Sch. P.) - Support for C.R.L. - Support for Premium Trend and Loss Trend (Fast Track?)

19 Indexed Filing Material- cont. - New Manual Pages (Highlight) - Non- F.H.C.F. Reinsurance Agreements - M.G.A. Agreement

20 Indexed Filing Material- cont. - DI4-1102, Rating Example by county Split Hurricane/Non-Hurr. - DI4-1103, Summary of overall % change by Form - DI4-1104, By Form by County % change (Example)

21 Indexed Filing Material- cont. -If applicable the F.I.G.A. Recoupment (Invoice, check) -7 Exhibits on Credits, Exhibit 7* “Cat Factor consistent with Ex Wind credits” *- 1÷ (1-Ex Wind % Credit/ Load)= Cat Factor Ex Wind Cat Factor= 1.00

22 Computer Disks Homeowners (H.R.C.S.) Dwelling (D.R.C.S.) Automobile (A.R.C.S.) Mobile Home (M.R.C.S.)

23 Some Frequently asked Questions - F.H.C.F. is tax exempt - Credibility Formula,Consistency - Complement of Credibility (95’ Joe Boor) - Support of credits that are not I.S.O. -Modeling, Black Box

24 Some Key D.O.I. Employees Area Code 850 Shirley Kerns Richard Koon Ken Ritzenthaler Vern Ivarson Tim Bazer Kay Cleary Jack Swisher Srinivasa Ramanujam Bill Bodiford

25 Tim Rundle Howard Eaglefeld Doug Haseltine Jim Watford Jack Nicholson (F.H.C.F.)