1. “What Makes a Good Rate Filing?”
Chuck Romberger, ACAS, MAAA, CPCU
Pennsylvania Insurance Department
CAS Ratemaking Seminar – March 11-12, 2004

2. Overview Know the Filing Environment
Consider Reasonability - Different Perspectives
Explore the Soundness of Data Sources

3. Know the Filing Environment
Review the state’s Filing Requirements’ Checklist (Part 1 of 3)
In PA, our Checklists are available on our website at:
Alternatively, me at and I’ll send you the link.

4. Know the Filing Environment
Review the state’s Filing Requirements’ Checklist (Part 2 of 3) – various requirements:
Submission Package
Transmittal Letter
General Form
Policy Provisions
Rate & Rule (Pricing) Provisions – next slide

5. Know the Filing Environment
Review the state’s Filing Requirements’ Checklist (Part 3 of 3) – various requirements:
Rate & Rule (Pricing) Provisions
Coverage requirements
Filing Review (Waiting) Periods
Filing Review Requirement
Statutory Pricing Requirements
Statutory Pricing Prohibitions

6. Know the Filing Environment
Call or meet with the insurance department
In PA, we continue to welcome and encourage this type of dialogue.
We meet with 20 to 30 companies annually to discuss either initial filing plans or plans to materially revise existing rating structures prior to the submission of a filing.

7. Know the Filing Environment
Review the state’s Filing Requirements and consider contacting the insurance department before performing an analysis or preparing a filing
Keep current on the filing activity of other companies -- check-out our website:

8. Know the Filing Environment
Know the statutory review (waiting) period and plan for an effective date that you can easily implement
Expect a review period generally consistent with the level of significance of the proposed changes

9. Consider Reasonability
Take-on the policyholder’s perspective
Magnitude of change
- After several years of “no change”
- At the First Renewal
Consistency of current v. prior changes
How well are your agents or customer service representatives prepared to explain changes?

10. Consider Reasonability
Now, take-on the regulator’s perspective (a.k.a. Identifying common pitfalls)
Unsupported / Judgment-based Selections
- Loss Development Factors
- Loss or Premium Trend Factors
- Territory / Class relativities

11. Consider Reasonability
Now, take-on the regulator’s perspective (a.k.a. Identifying common pitfalls)
Consistency or Reconciliation to Prior Filings
- Overall rate level change
- Coverage changes & estimated effects
- Rating structure changes
- Change in methodology

12. Consider Reasonability
Now, take-on the regulator’s perspective (a.k.a. Identifying common pitfalls)
Establishing Territorial Relativities – things that diminish the credibility of a territory
- Creating “small” territories
- Imposing narrow territorial swing limits
- Competitors as the complement

13. Explore the Soundness of Data
Reconciliation – by the insurance company
Within the current filing
With prior filings
With other external data sources

14. Explore the Soundness of Data
Statistical Reports
NAII – Statistical Reports
- Accuracy & Timeliness
Fast Track Monitoring System (PPA)
- Concerns with Pennsylvania PIP data
- See letter reproduced on next slide…

16. Question & Answers The end