TITLE 13 INSURANCE
CHAPTER 8 INSURANCE
POLICIES AND RATES
PART 2 RATE
FILINGS BY INSURERS AND RATE SERVICE ORGANIZATIONS
13.8.2.1 ISSUING
AGENCY: New Mexico Public Regulation Commission
Insurance Division.
[7-1-97;
13.8.2.1 NMAC - Rn & A, 13 NMAC 8.2.1, 1-15-02; A, 3-1-06]
13.8.2.2 SCOPE:
This rule applies to all rate and rate-related rules filings made on or
after the effective date of this rule pursuant to Chapter 59A, Article 17 NMSA
1978, including but not limited to rate filings applicable to risks covered
through assigned risk pools and similar residual market plans.
[7-1-97;
13.8.2.2 NMAC - Rn & A, 13 NMAC 8.2.2, 1-15-02; A, 3-1-06]
13.8.2.3 STATUTORY
AUTHORITY: Sections 59A-2-9, 59A-17-2, 59A-17-3,
59A-17-4, 59A-17-5, 59A-17-6.1, 59A-17-6.2, 59A-17-16, 59A-17-17, 59A-17-28,
59A-17-29 and 59A-32-13 NMSA 1978.
[7-1-97;
13.8.2.3 NMAC - Rn & A, 13 NMAC 8.2.3, 1-15-02; A, 3-1-06; A, 10-1-07]
13.8.2.4 DURATION: Sections
1 through 27 and 29 of 13.8.2 NMAC are permanent. 13.8.2.28 NMAC shall expire
on October 1, 2010.
[7-1-97;
13.8.2.4 NMAC - Rn, 13 NMAC 8.2.4, 1-15-02; A, 10-1-07]
13.8.2.5 EFFECTIVE
DATE: July 1, 1997, unless a later date is cited at
the end of a section.
[7-1-97;
13.8.2.5 NMAC - Rn, 13 NMAC 8.2.5, 1-15-02; A, 3-1-06]
13.8.2.6 OBJECTIVE:
The purpose of this rule is to provide standards, procedures, and
methods which fairly and appropriately meet the statutory mandates.
[7-1-97;
13.8.2.6 NMAC - Rn, 13 NMAC 8.2.6, 1-15-02]
13.8.2.7 DEFINITIONS:
A. Advisory filing
means any filing by a licensed advisory organization within the scope of its
license, solely for informational purposes and such limited uses as provided in
13.8.2.20 NMAC. The term includes a rate filing limited to pure premium rates,
supplementary rates, and supporting data developed and trended as appropriate.
B. Advisory
organization has the meaning given in Section 59A-17-4 NMSA 1978.
C. Credible
or credibility
in connection with statistical data is used in conformance with
generally-accepted actuarial standards.
D. Commercial insurance has the meaning given in Section 59A-17-4 NMSA 1978.
E. Expenses include
acquisition expenses, field supervision and collection expenses, general
expenses, taxes, licenses and fees.
F. Filing
means any submission to the superintendent to establish or revise rates.
G. Line of business
means a line of business as shown in the annual statement to the
superintendent.
H. Pure premium rate means that portion of a rate which represents the loss cost
per unit of exposure, and may include loss adjustment expense.
I. Regular business day means every day except Saturday, Sunday and official state
government holidays.
J. Regular business hours are 8:00 a.m. to 5:00 p.m., mountain standard or mountain
daylight time, whichever is applicable, on regular business days; provided that
regular business hours may be shortened on certain days without notice by
official action of the governor or the public regulation commission.
K. Supplementary rate information has the meaning given in Section 59A-17-4
NMSA 1978.
L. Supporting data
means data and information which justifies, supports, interprets, describes,
explains or underlies any rate or supplementary rate information, including but
not limited to data the superintendent requires or may require pursuant to this
rule.
M. Reference
filing as used in 13.8.2 NMAC and in Paragraph C of Section 59A-17-9
NMSA 1978 means a filing by an insurer to adopt a legally effective filing by
an advisory organization to which the insurer is a member, a subscriber or an
affiliate.
[7-1-97;
13.8.2.7 NMAC - Rn & A, 13 NMAC 8.2.7, 1-15-02; A, 3-1-06; A, 10-1-07]
[See Section
59A-17-4 NMSA 1978 for additional definitions]
13.8.2.8 FILING PROCEDURES:
A. Every
filing shall be made by submitting it to the superintendent in accordance with
13.8.2.8 NMAC.
B. Filings
shall be made separately from policy form filings.
C. Filings
may be made by mail, courier, the national association of insurance
commissioners’ system for electronic rate and forms filing (SERFF) or in person
and shall be addressed to the superintendent.
D. Paper
filings shall be submitted in an original and one copy, along with a
self-addressed stamped envelope.
E. All
filings shall be submitted with the appropriate current completed transmittal
documents in substantially the format of the national association of insurance
commissioners’ uniform transmittal documents, which are available online at
www.naic.org.
(1)
The property and casualty
transmittal document shall include:
(a)
group name and “NAIC” number;
(b)
company name, domicile, “NAIC” number and “FEIN” number;
(c)
company tracking number;
(d)
contact information of filer or corporate officer, including: name and
address; title; telephone numbers; fax numbers and e-mail address;
(e)
signature and printed name of authorized filer;
(f) type and sub-type
of insurance;
(g)
state specific product code, if applicable;
(h) company
program title;
(i) filing
type;
(j) effective
date requested, including: new or renewal;
(k)
a statement indicating whether the filing is a reference filing,
including the reference organization name and reference organization number and
title, if applicable;
(l)
company’s date of filing;
(m)
status of filing in domicile;
(n)
company tracking number;
(o) filing
description; and
(p)
the appropriate filing fees, including check number and fee amount, if
applicable.
(2)
The rate/rule filing schedule
document shall include:
(a)
company tracking number;
(b)
corresponding company tracking number of form filing, if applicable;
(c)
a statement indicating whether the filing is for a rate increase or rate
decrease or is rate neutral;
(d)
a description of the filing method;
(e)
a description of the rate change proposed by the company,
including: company name, overall indicated
change, when applicable, overall percentage rate impact; written premium change
for the program; number of policyholders affected for the program; written
premium for the program; maximum percentage change and minimum percentage
change;
(f)
overall percentage of last rate revision;
(g) effective
date of last rate revision;
(h)
a description of the filing method of the company’s last filing; and
(i)
a statement of the rule number or page number submitted for review,
including whether the filing is new, a replacement or a withdrawal and the
previous state filing number.
F. If the filing
includes a loss cost multiplier, the filer shall also submit the appropriate
current completed national association of insurance commissioners’ loss cost
transmittal documents which are available online at www.naic.org.
(1) The lost cost
data entry document shall
include:
(a) company tracking number;
(b) name of advisory
organization and reference or item filing number if the filing is an adoption
of an advisory organization loss cost filing;
(c) company name and
“NAIC” number;
(d) product coding
matrix for line of business (type of insurance) and line of insurance (sub-type
of insurance);
(e) a statement
describing coverage, indicated percentage rate level change, requested
percentage rate level change, and for loss costs only: expected loss ratio;
loss cost modification factor; selected loss cost multiplier; expense constant,
if applicable; and company current loss cost multiplier;
(f)
a five year rate
change history, including: year; policy count; percentage of change; effective
date; state earned premium; incurred losses, state loss ratio and countrywide
loss ratio;
(g) a
statement of selected provisions for expense constants, including: total
production expense; general expense; taxes, license and fees; underwriting
profit and contingencies; other expenses; and the total of all figures listed;
(h) a statement of whether the company will
apply lost cost factors to future filings; and
(i) a statement of
the estimated maximum rate increase for any insured.
(2)
The expense constant supplement document
shall include:
(a) company tracking
number;
(b) corresponding
company tracking number of form filing, if applicable;
(c) a description of development of expected loss
ratio;
(d) a statement of
selected overall, variable, and fixed provisions for total production expense;
general expense; taxes, license and fees; underwriting profit and contingencies;
other expenses; and the total of all figures listed;
(e) a statement of
the expected loss ratio and the variable expected loss ratio;
(f)
a statement of the formula expense constant and the formula variable
loss cost multiplier;
(g)
a statement of the selected expense constant and the selected variable
loss cost multiplier;
(h) an explanation of any differences between
Subparagraphs (f) and (g) of Paragraph (2) of Subsection F of 13.8.2.8 NMAC;
and
(i) a statement of
the rate level change for the coverage to which the expense constant supplement document applies.
(3) The loss
cost filing for other than workers’ compensation document shall
include:
(a) company tracking
number;
(b) corresponding company tracking number of
form filing, if applicable;
(c) loss cost
reference filing number or a statement that the filing is an independent rate
filing;
(d) a statement that:
(i)
the insurer files to have its loss cost multipliers and, if utilized,
expense constants be applicable to future revisions of the advisory
organization’s prospective loss costs for this line of insurance; the insurer’s
rates will be the combination of the advisory organization’s prospective loss
costs and the insurer’s loss cost multipliers and if utilized, expense
constants specified in the attachments; the rates will apply to policies
written on or after the effective date of the advisory organization’s prospective
loss costs; this authorization is effective until disapproved by the
commissioner, or until amended or withdrawn by the insurer; or
(ii)
the insurer files to have its loss cost multipliers and, if utilized,
expense constants be applicable only to the identified advisory organization
reference filing;
(e) a statement of
the line, sub line, coverage, territory, class or combination thereof to which
the loss cost filing document
applies;
(f) a description of
loss cost modification;
(g)
if expense constants are utilized, the filer shall attach expense constant supplement or other
supporting information and shall not include the items listed in Subparagraphs
(h) through (l) of Paragraph (3) of Subsection F of 13.8.2.8 NMAC;
(h)
a description of development of
expected loss ratio, including selected provisions for:
(i)
total production expense;
(ii)
general expense;
(iii)
taxes, licenses and fees;
(iv)
underwriting profit and contingencies;
(v)
other expense, and
(vi)
total of all figures listed;
(i)
a statement of expected loss ratio;
(j)
a statement of the company formula loss cost multiplier;
(k)
a statement of the company
selected loss cost multiplier; and
(l)
a statement of the rate level change for the coverage(s) to which the loss cost filing document applies.
(4) The loss
cost filing for workers’ compensation document shall include:
(a) company tracking
number;
(b)
corresponding form filing number;
(c) loss cost
reference filing number or a statement that the filing is an independent rate
filing;
(d) a statement that:
(i) the insurer files to have its loss cost
multipliers and, if utilized, expense constants be applicable to future
revisions of the advisory organization’s prospective loss costs for this line
of insurance; the insurer’s rates will be the combination of the advisory
organization’s prospective loss costs and the insurer’s loss cost multipliers
and if utilized, expense constants specified in the attachments; the rates will
apply to policies written on or after the effective date of the advisory
organization’s prospective loss costs; this authorization is effective until
disapproved by the commissioner, or until amended or withdrawn by the insurer;
or
(ii)
the insurer files to have its loss cost multipliers and, if utilized,
expense constants be applicable only to the identified advisory organization
reference filing;
(e) applicable class
codes;
(f) description of
loss cost modification;
(g)
if expense constants are utilized, the filer shall attach expense constant supplement or other
supporting information and shall not include the items listed in Subparagraphs
(h) through (o) of Paragraph (4) of Subsection F of 13.8.2.8 NMAC;
(h)
a description of development of expected
loss and loss adjustment expense ratio, including selected provisions
for:
(i)
total production expense;
(ii)
general expense;
(iii)
taxes, licenses and fees;
(iv)
underwriting profit and contingencies;
(v)
other expenses, and
(vi)
total of all figures listed;
(i)
a statement of expected loss ratio;
(j)
a statement of the overall impact of expense constant and minimum
premiums;
(k)
a statement of the overall impact of size-of-risk discounts plus expense
graduation recognition in retrospective rating;
(l) a statement of the company formula loss cost
multiplier;
(m)
a statement of the company selected loss cost multiplier;
(n)
a statement disclosing whether the filer is amending its minimum premium
formula; and
(o)
a statement disclosing whether the filer is changing its premium
discount schedules.
(5)
If a filer desires acknowledgment of receipt, a suitable receipt shall
be submitted together with a second self-addressed, stamped envelope. Such
receipts are returned as a courtesy and accommodation to the filer. Failure to
return a receipt, even though requested in accordance with Paragraph (5) of
Subsection A of 13.8.2.8 NMAC, shall not stay, toll, extend or otherwise affect
any time period, or limit or otherwise affect any action the superintendent may
take.
(6)
Filings shall be date stamped as of the date received. Each filing shall
be reviewed upon receipt for compliance with procedural requirements. If found
to comply, the filing shall be accepted as of the date received. If found not
to comply, the filing shall be returned to the filer or the filer shall be
otherwise notified.
(7)
Filings not received during regular business hours on a regular business
day shall be deemed received on the next regular business day.
G. In
computing periods of time, the last day shall be counted and the first day
shall not be counted. Saturdays, Sundays and holidays shall be counted. If the
last day of a time period falls on a day which is not a regular business day,
the time period shall be extended to the close of business on the next regular
business day.
H. Every
filing shall be open to public inspection during regular business hours. A copy
of any filing or a designated portion thereof may be obtained by making request
to the superintendent and paying the charge he shall prescribe.
I. Any filing may be withdrawn at any time
prior to the time it becomes effective. In the interest of efficiency, filers
should notify the superintendent of withdrawals at the earliest possible date.
J. Filings
subject to prior approval may contain a request to become effective on any
specified date on or after their date of filing.
[7-1-97;
13.8.2.8 NMAC - Rn, 13 NMAC 8.2.8, 1-15-02; A, 3-1-06; A, 10-1-07]
13.8.2.9 AMENDING FILINGS: Any
pending filing may be amended, provided that the entire filing, including the
amendment, shall be deemed made as of the date the amendment was filed, unless
waived by the superintendent.
[7-1-97;
13.8.2.9 NMAC - Rn, 13 NMAC 8.2.9, 1-15-02; A, 3-1-06]
13.8.2.10 FILINGS OF CONFIDENTIAL MATERIAL: Materials
that are required by statute to be kept confidential or that are considered by
the filer to be trade secrets shall be filed separately from materials that are
required to be open to public inspection.
A. Filings of underwriting guidelines
pursuant to Section 59A-17-5.1 NMSA 1978 shall be submitted with the following
words in bold uppercase type on the heading of the cover letter: CONFIDENTIAL UNDERWRITING GUIDELINES.
B. Filings
of materials other than underwriting guidelines or insurance scoring models
that the filer considers to be a trade secret shall be submitted with the
following words in bold uppercase type on the heading of the cover letter: REQUESTED CONFIDENTIAL MATERIALS. The superintendent shall advise the filer
within 30 days whether such material shall be open to public inspection. The superintendent shall keep such materials
closed from public inspection prior to his determination on their
confidentiality.
[7-1-97;
13.8.2.10 NMAC - Rn, 13 NMAC 8.2.10, 1-15-02; A, 3-1-06; A, 10-1-07]
13.8.2.11 NOTIFICATION:
The superintendent shall notify by mail or electronic media the filer
and each other party of his approval or disapproval of each filing. Where a
filing is disapproved, the superintendent shall state the reasons for
disapproval.
[7-1-97;
13.8.2.11 NMAC - Rn, 13 NMAC 8.2.11, 1-15-02; A, 3-1-06]
13.8.2.12 RIGHT TO HEARING:
Any person aggrieved by any action, threatened action or failure to act
of the superintendent in connection with a filing has the right to request a
hearing pursuant to Section 59A-17-34A NMSA 1978. The superintendent may grant
or deny the request.
[7-1-97;
13.8.2.12 NMAC - Rn, 13 NMAC 8.2.12, 1-15-02]
13.8.2.13 REVIEW OF FINAL ORDER:
A. Reconsideration. The filer or any other party aggrieved by the
superintendent's final order deciding the issues following a hearing, or
refusing to grant a hearing, pursuant to13.8.2.12 NMAC, may, in addition to
other remedies provided by law, move for reconsideration, stating in detail the
basis therefor. Any motion for reconsideration shall be filed within fifteen
days of the superintendent's final order, and is barred thereafter. A motion
for reconsideration is an optional remedy, and need not be exhausted as a
condition of further administrative appeal.
B. Appeal. The filer or any party aggrieved by the
superintendent's final order deciding the issues following hearing, or refusing
to grant a hearing, pursuant to 13.8.2.12 NMAC, may request a review by the public
regulation commission pursuant to this section.
(1) Following exhaustion of any right to
hearing before the superintendent, the filer or any other aggrieved party may
request the public regulation commission to review any final order of the
superintendent made pursuant to13.8.2.12 NMAC.
(2) Every such request for review shall be
made within thirty days after the superintendent's final order, and is barred
thereafter; provided, that if a motion for reconsideration is timely filed with
the superintendent, a request for review shall be made within thirty days after
the date the motion is filed.
(3)
The public regulation commission's review shall be on the record before
the superintendent, unless the public regulation commission in its discretion
deems it necessary or appropriate to supplement the evidence through public
hearing or otherwise; provided, that the scope of review shall be limited to
the issues raised before the superintendent; and further provided, that the public
regulation commission may summarily affirm or reverse the superintendent
without hearing.
(4) Every request for review shall state with
particularity the grounds upon which review is sought, and shall itemize each
alleged error with citations to the applicable portions of the official record.
If the transcript of record is not available despite appellant's prompt request
therefor, citations shall be filed within ten days after the transcript first
becomes available in substantially complete form. In any event, the request for
review, with or without record citations must be timely filed within the time
period specified in Paragraph (2) of Subsection B of 13.8.2.13 NMAC.
(5) The costs of transcribing the record shall
be borne by the appellant.
[7-1-97;
13.8.2.13 NMAC - Rn & A, 13 NMAC 8.2.13, 1-15-02]
13.8.2.14 COMPANY FILINGS:
A. Any
insurer may make rates and rate filings on its own behalf in accordance with
this section and other applicable portions of this rule.
B. Any
insurer may file at any time any rate or supplementary rate information
applicable to any line or part of a line of property and casualty insurance
business for which the insurer is certificated.
C. Every
company filing shall be accompanied by the exhibits required under 13.8.2.17
NMAC.
D. Every
company filing, except filings pursuant to 13.8.2.16 NMAC, shall comply with
13.8.2.18 NMAC.
E. The
review period for a company filing begins when the filing is received by the
superintendent, unless delayed for amendment or lack of sufficient information
pursuant to Chapter 59A, Article 17 NMSA 1978 and 13.8.2 NMAC.
F. Except
as provided in 13.8.2.25 NMAC, company filings based on an advisory organization
advisory loss cost filing may not be used until either the superintendent has
notified the advisory organization that the advisory filing is acceptable or the
statutory review period has expired with no action, whichever is sooner.
[7-1-97;
13.8.2.14 NMAC - Rn & A, 13 NMAC 8.2.14, 1-15-02; A, 3-1-06; A, 10-1-07]
13.8.2.15 PERMISSIBLE BASES FOR COMPANY
FILINGS: Company filings shall meet all statutory rate
standards and take into consideration all applicable rate factors. Subject to
the foregoing sentence, an insurer may base a company rate filing on:
A. the
insurer's own experience in the particular line of business, including but not
limited to premiums, investment income, loss experience and actual expenses;
B. average
pure premium rates and supporting data, such as loss experience, developed and
trended as appropriate, from an advisory organization advisory filing, together
with the insurer's own experience in the particular line of business, including
but not limited to premiums, investment income and actual expenses, as provided
in 13.8.2.20 NMAC;
C. other
company ratemaking methods, for limited markets, as provided in 13.8.2.16 NMAC;
or
D. any
other method meeting statutory standards which has been submitted to and
approved by the superintendent prior to the rate filing.
[7-1-97;
13.8.2.15 NMAC - Rn, 13 NMAC 8.2.15, 1-15-02; A, 10-1-07]
13.8.2.16 OTHER COMPANY FILING METHODS FOR
LIMITED MARKETS: The superintendent may authorize an insurer
to make a company rate filing on any basis meeting statutory rate standards,
including but not limited to ratemaking by reference to an approved New Mexico
filing of another company, or any other appropriate method, where the insurer
demonstrates to the superintendent's satisfaction that:
A. the
predicted New Mexico premium volume for the line or part of a line of business
is so minimal that development of a rate is economically unfeasible; and
B. there
is a need or demand for such coverage in New Mexico which will be inadequately
or uneconomically served if the filer does not file a rate and make a market in
the line or part of a line of business.
[7-1-97;
13.8.2.16 NMAC - Rn, 13 NMAC 8.2.16, 1-15-02]
13.8.2.17 REQUIRED EXHIBITS:
A. Rate
filings that require supporting information shall include the following
exhibits for each line of business, showing by individual insurer for the three
most recently-completed consecutive calendar or calendar-accident years:
(1) actual direct written premiums;
(2)
actual direct earned
premiums;
(3)
actual direct paid
losses;
(4)
the change in direct
loss reserves during the year, including:
(a) reported reserves, based on actual
reserves; and
(b) incurred but not reported reserves, based
on separate calculations or equivalent to the change in reported reserves;
(5) incurred
losses, derived from the foregoing;
(6)
underlying data used
to calculate any loss development factors and trend factors included in the
filing, including but not limited to a description of the basis for and methods
used to establish such factors;
(7)
actual expenses for
each of the following categories:
(a) commissions;
(b) other acquisition expenses;
(c) general expenses; and
(d) taxes, licenses and fees;
(8)
investment income
from each of the following sources, including method of calculation, allocated
to the specific line of business:
(a) unearned premium reserves;
(b) loss reserves, including but not limited
to IBNR;
(c) loss adjustment expense reserves;
(d) any contingency reserves; and
(e) surplus held in conjunction with the line
of business; and
(9)
average credit or
debit written in conjunction with any schedule rating plan or similar plan.
B. If not
shown in the transmittal documents, the filing shall contain an exhibit which
displays the maximum percentage of rate increase that any policyholder may
experience as a result of the filing.
[7-1-97;
13.8.2.17 NMAC - Rn, 13 NMAC 8.2.17, 1-15-02; A, 3-1-06; A, 10-1-07]
13.8.2.18 RATEMAKING REQUIREMENTS:
Rate filings are subject to the following ratemaking requirements, in
addition to all other requirements prescribed by law.
A. Rate
filings may be based on any reasonable base period of at least three recent
consecutive calendar, calendar-accident or policy years, or any combination of
these, developed and trended as appropriate, unless the Superintendent finds
such base to be inadequate or unreliable, in which case he shall specify the
base to be used.
B. Expense
data shall be derived from insurers' actual New Mexico expenses where available
by line. Expenses and expense trending
shall reflect actual expenses adjusted for anticipated increases or decreases
on a company-by-company or other basis which accurately reflects differences in
insurers' modes of operation and expense levels.
C. Rate
filings shall reflect investment income allocated to the line or part of a line
of New Mexico business. Investment income shall track each insurer's overall
investment rate of return, including but not limited to realized capital gains.
Investment income shall include income from each and every source specified in
Subsection H of 13.8.2.17 NMAC.
D. Premiums,
investment income, loss experience, actual expenses and all other applicable
rate factors shall be adjusted to the level anticipated during the period to
which the rates will apply.
[7-1-97;
13.8.2.18 NMAC - Rn, 13 NMAC 8.2.18, 1-15-02; A, 3-1-06]
13.8.2.19 RATE MODIFICATION:
A. Filings
made to modify rates shall be made pursuant to 13.8.5 NMAC, Rate Modification
Plans.
B. If
requested by an insured, experience modifiers shall be developed and applied
separately and individually to each insured legal entity in New Mexico;
provided, that if past experience is unavailable for individual legal entities,
and cannot be developed at reasonable cost, such request shall apply on a
prospective basis only. Such request shall be made not less than 120 days prior
to the proposed effective date of the individual entity rating, and shall
remain in effect for at least two full rating periods.
[7-1-97;
13.8.2.19 NMAC - Rn, 13 NMAC 8.2.19, 1-15-02]
13.8.2.20 ADVISORY ORGANIZATION FILINGS:
A. Any
licensed advisory organization may make advisory filings within the scope of
its license as provided in 13.8.2 NMAC.
B. Advisory
filings shall be made for informational purposes and such uses as permitted in
13.8.2 NMAC. Advisory rate filings are limited to pure premium rates,
supplementary rate information and supporting data, including loss experience,
developed and trended as appropriate. Advisory rate filings shall not contain
data on premiums, investment income, expenses, profit factor, dividend
allowance permissible loss ratio or other factors or supporting data which
could be used to develop a full rate, other than loss experience.
C. The
superintendent shall review all advisory filings. The superintendent shall determine if the
filing is made by a properly licensed advisory organization within the scope of
its license, and if the scope of such filing is limited in accordance with
13.8.2 NMAC, and if not, shall reject the filing. The superintendent shall also consider the
rate standards contained in Section 59A-17-6 NMSA 1978 in determining whether
advisory filings are acceptable.
D. An
insurer may seek the superintendent's permission to base its own independent
filing, or portions thereof, on information, data, statistics or pure premium
rates contained in an advisory filing upon making a showing satisfactory to the
superintendent that:
(1) the insurer lacks credible loss data of
its own on which to base rates;
(2) the insurer's use of a uniform system of
statistics, classifications, rating schedules, rating rules, underwriting rules
or other similar information makes use of such supplementary rate information
from an advisory filing both necessary and appropriate; provided, that
Paragraph (2) of Subsection D of 13.8.2.20 NMAC applies only to statistical supplementary
rate information, and does not apply to nor permit adoption of any rate, rate
manual, minimum premium or policy fee; and
(3) with regard to Paragraph (1) of Subsection
D of 13.8.2.20 NMAC, that such use of the advisory filing or portions thereof
is appropriate because the loss experience contained in the advisory filing
reasonably and accurately applies to the insurer, and will not result in rates
which are excessive, inadequate or unfairly discriminatory.
[7-1-97;
13.8.2.20 NMAC - Rn, 13 NMAC 8.2.20, 1-15-02; A, 3-1-06; A, 10-1-07]
13.8.2.21 ASSIGNED RISK POOL FILINGS:
A. For
purposes of rate filings, assigned risk plans and similar residual market plans
applicable to risks not insurable through the voluntary market shall be
considered and treated as if the plan were a single insurer.
B. Rates
for assigned risk plans and other residual market plans may be based on:
(1) the plan's own premiums, investment
income, loss and expense data, and other statutory factors;
(2) premiums, investment income, loss and
expense data, and other statutory factors for all New Mexico risks in the line
of business as a whole; provided, that if this option is used, a reasonable,
actuarially-justified surcharge may be provided to reflect any demonstrated
difference between projected loss and expense experience for the plan and for
the line of business as a whole. Such surcharge shall be justified on the basis
of comparative loss and expense experience for at least two recent consecutive
years; or
(3) any other reasonable method meeting
statutory standards and approved by the superintendent.
[7-1-97;
13.8.2.21 NMAC - Rn, 13 NMAC 8.2.21, 1-15-02; A, 3-1-06]
13.8.2.22 RATES FOR GOVERNMENTAL ENTITIES:
Rate filings need not be followed in connection with policies bid or to
be issued to state or local governmental entities in New Mexico; provided, that
no rate to any such governmental entity shall exceed the filed rate or rates
which would be applicable to the entity but for the provisions of 13.8.2
NMAC. 13.8.2 NMAC does not authorize
bidding or issuance to governmental entities of lines or types of insurance for
which an insurer has not otherwise filed and obtained approval of a rate, nor
does it relieve any insurer of any duty to comply with the Insurance Code or
laws related to bidding, sale or issuance of insurance to governmental
entities.
[7-1-97;
13.8.2.22 NMAC - Rn, 13 NMAC 8.2.22, 1-15-02; A, 3-1-06]
13.8.2.23 ADVISORY ORGANIZATION MEMBERS'
RIGHT OF NONADHESION TO FILINGS: No advisory organization shall require any
member or subscriber insurer to adhere to the organization's New Mexico
filings, whether made on behalf of the insurer or otherwise. No advisory organization
shall in any manner limit or refuse to grant any insurer any right or
privilege, including but not limited to full membership rights granted other
insurers, or otherwise discriminate against any insurer, on the basis that the
insurer has not adhered to or does not adhere to the organization's filings.
[7-1-97;
13.8.2.23 NMAC - Rn, 13 NMAC 8.2.23, 1-15-02; A, 10-1-07]
13.8.2.24 STATISTICAL SERVICES;
INFORMATION: The superintendent may require insurers to
provide statistical information in a standard format. The superintendent may
designate an advisory organization to receive such information and tabulate it.
The superintendent may act pursuant to this section by notifying affected
insurers in writing.
[7-1-97;
13.8.2.24 NMAC - Rn, 13 NMAC 8.2.24, 1-15-02; A, 10-1-07]
13.8.2.25 WORKERS
COMPENSATION REFERENCE FILINGS: An insurer that wishes to adopt an approved
advisory workers compensation filing that has been filed on its behalf by the
workers compensation advisory organization designated by the superintendent,
with no deviation other than effective date, shall do so in accordance with
Paragraph C of Section 59A-17-9 NMSA 1978.
[7-1-97;
13.8.2.25 NMAC, Rn, 13 NMAC 8.2.25, 1-15-02; Repealed, 3-1-06 - Rn, 13.8.2.26
NMAC & A, 3-1-06; A, 10-1-07]
13.8.2.26 AUTOMATIC
ADOPTION OF ADVISORY LOSS COST FILINGS: An insurer may
satisfy its obligation to make a rate filing by authorizing the superintendent
of insurance to have its loss cost multipliers and, if utilized, expense
constants be applicable to future revisions of the advisory organization’s
advisory prospective loss costs.
However, an insurer that proposes to revise its loss cost multipliers,
or deviate from the effective date or any other component of the advisory organization
loss cost filing, or which fails to file with the superintendent of insurance
to accept future advisory prospective loss cost filings of the specified
advisory organization, must submit a filing in accordance with the provisions
of 13.8.2 NMAC.
[13.8.2.26 NMAC
- N, 10-1-07]
13.8.2.27 MAINTENANCE
OF RATE INFORMATION: Regardless of whether an insurer is required
to file its rates with the superintendent, an insurer shall maintain a copy of
its rates and supplementary rate information currently in effect in sufficient
detail to produce the premium charged on a policy. This information shall be available for
immediate inspection by the superintendent.
[13.8.2.27 NMAC
- N, 10-1-07]
13.8.2.28 NONCOMPETITIVE
MARKETS:
A. The following markets lack a reasonable degree of
competition and are therefore subject to the filing and prior approval
requirements of Paragraph B of Section 59A-17-9 NMSA 1978:
(1) farmowners multiple
peril, due to the concentration of market share within a relatively small
number of competitors as well as the increasing dominance of its largest
writer;
(2) medical professional
liability, due to its concentration of market share among relatively few
competitors as well as the increasing dominance in recent years of its largest writer;
(3) credit, due to its
concentration of market share among relatively few competitors; or
(4) mortgage guaranty,
due to the dominance of market share maintained by two competitors, the
infrequent entry and exit of competitors, and the relatively low number of
competitors for the market’s premium volume.
B. The
determination of noncompetitive markets in Subsection A of 13.8.2.28 NMAC shall
expire on October 1, 2010.
[13.8.2.28 NMAC -
N, 10-1-07]
13.8.2.29 REVERSE
COMPETITIVE MARKETS: The following factors are likely
indicators of a reverse competitive market:
A. insurance
products sold or solicited in point-of-sale conjunction with purchases of
consumer goods;
B. insurance
products sold or solicited by individuals other than professional insurance
agents;
C. products that
insurers market primarily to parties other than prospective policyholders or to
the parties that will pay the premium;
D. low loss ratios;
or
E. high commission
ratios.
[13.8.2.29 NMAC
- N, 10-1-07]
HISTORY OF 13.8.2
NMAC:
Pre-NMAC Regulatory Filing History:
Material in the
part was derived from that previously filed with the commission of public
records - state records center and archives:
ID 67-1,
Sections 10-1-1 through 10-1-13, New Mexico Official Administrative Rules and
Regulations Code, on December 1, 1967
ID 70-1,
Regulations Governing the Filing of Casualty, Fidelity, Surety, Property, Title
and Vehicle Insurance Rates (Article 10, Chapter 58, Rule 1 Section 10-1-1 to
Section 10-1-13), on June 3, 1970
SCC 87-3-IN,
Rate Filings By Insurers And Rate Service Organizations, Insurance Department
Regulation 17, Rule 1, on October 6, 1987.
History of Repealed Material: [RESERVED]
Other History:
That applicable
portion of ID 70-1, Regulations Governing the Filing of Casualty, Fidelity,
Surety, Property, Title and Vehicle Insurance Rates (Article 10, Chapter 58,
Rule 1 Section 10-1-1 to Section 10-1-13) (filed 6-03-70); and
SCC 87-3-IN,
Rate Filings By Insurers And Rate Service Organizations, Insurance Department
Regulation 17, Rule 1 (filed 10-06-87) were renumbered, reformatted, amended,
and replaced by 13 NMAC 8.2, Rate Filings by Insurers and Rate Service
Organizations, effective 7-01-97.
13 NMAC 8.2,
Rate Filings by Insurers and Rate Service Organizations (filed 12-18-01) was
renumbered, reformatted, amended, and replaced by 13.8.2 NMAC, Rate Filings by
Insurers and Rate Service Organizations, effective 1-15-02.