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        


 

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