A.I. 22 (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
PriceWaterhouseCoopers
on
behalf of
Cumis
General Insurance Company
TO IMPLEMENT REVISED RATES FOR ITS
PRIVATE PASSENGER CLASS OF BUSINESS.
WHEREAS,
by application received January 31, 2001, PriceWaterhouse Coopers on
behalf of Cumis 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 application was forwarded to the Board’s Actuarial Consultants for review and report as to the adequacy of those rates not in accordance with the Benchmark rate ranges, and
WHEREAS, on May
7, 2001, the Board’s Actuarial Consultants provided their report to the Board
with respect to the adequacy of the rates as submitted in the filing, and
WHEREAS the
findings of the Actuarial Consultants are that while the filing as presented
reasonably supports the proposed rate, the proposed rates may be understated
due to the use of certain inputs underlying the rate level indicators and, more
specifically, the selected return-on-investment assumption and the use of a 3
to 1 premium-to-surplus ratio, and
WHEREAS the Board has reviewed all information before it, with respect to this filing.
IT
IS THEREFORE ORDERED THAT:
1.
The application of Cumis General Insurance
Company for a revised private-passenger automobile insurance rating program to
be effective June 1, 2001 for new business and July 1, 2001 for renewals will
be deferred pending resolution of the issues raised by the Board’s Actuarial
Consultants.
2.
Cumis General Insurance Company shall continue
to utilize the automobile insurance rating program approved for use by Board
Order A.I. 11 (1999-2000) issued by the Board on July 9, 1999.
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