Section Ins 1406.10 - Cessions(a) When a policy of insurance is ceded to the facility, a member shall cede all terms and provisions of the policy covering private passenger automobile(s).(b) Coverages up to the following limits shall be eligible for cession to the facility: (1) Bodily injury liability $250,000 each person, $500,000 each accident;(2) Property damage liability $100,000 each accident;(3) Single limit bodily injury and property damage liability $500,000 each accident;(4) Medical payments $10,000 each person;(5) Uninsured motorists at least equal to bodily injury liability limits;(6) Physical damage, loss of use, or damage to automobiles on an actual cash value basis subject to the policy deductible provisions;(7) Towing and labor $25 per disablement; and(8) Any other automobile insurance or limits required by law.(c) Cessions to the facility with respect to a policy written on business which is new to a member and which is new to the group of insurers under common management or control to which the member belongs shall be as follows:(1) A policy may be ceded by a member as of the policy effective date, provided the policy meets the cession eligibility requirements and the following criteria: a. The notice of cession is received by the facility within 20 days after the policy effective date; orb. The notice of cession is received by the facility from 21 to 60 days after the policy effective date and either: 1. The company provides documentation to the facility that the policy was ceded as a result of misinformation provided by the insured; or2. The company provides documentation to the facility that the policy was originally written as a facility policy, at the facility rate, indicating that the company or producer initially intended to cede the policy. Otherwise, the cession shall be effective on the date the notice of cession is received by the facility;(2) No loss incurred within the 60-day retroactive period shall be covered by the facility unless the member provides reliable information to the board that the policy was ceded as a result of misinformation provided by the insured not merely because of the loss;(3) With respect to a policy written on business which is new to a member and which is new to the group of insurers under common management or control to which the member belongs, if any, the premium for such a policy ceded subsequent to the policy effective date shall be the facility premium retroactive to the policy effective date;(4) Notwithstanding (2) above, if the insured elects not to accept the offer made in the notification of change as required by Ins 1406.10(i), any earned premium charged to the insured shall be at the originally quoted rate, unless the cession or movement to a new company or tier is based upon misinformation provided by the insured;(5) Any return premium from this cancellation request pursuant to (4) above shall be calculated pro rata and returned within 30 days pursuant to RSA 402:81;(6) With respect to a replacement policy as defined in Ins 1406.02(w), the cession shall be effective as of the effective date of the replacement policy, provided the notice of cession is received by the facility within 20 days of the replacement policy effective date. Otherwise, the cession shall be effective on the date the notice of cession is received by the facility;(7) With respect to a renewal policy as defined in Ins 1406.02(v), on the renewal date of an expiring policy, provided written notice is received by the facility before the effective date of the renewal policy. Otherwise, the cession shall be effective on the date written notice is received by the facility;(8) With respect to a policy ceded at other times, on receipt by the facility of the required notice, but such acceptance shall not be retroactive; and(9) No renewal policy shall be ceded to the facility unless a 45-day written notice of such action is delivered to the policyholder.(d) The facility charge for members on ceded policies shall be the facility gross premium less 15 percent facility gross premium and less commission allowance for the cedable limits, regardless of the date of cession, except that a pro rata credit against the charge shall be allowed in the event of cancellation of the policy.(e) Policies ceded shall remain in the facility until the expiration date or cancellation date of the policy.(f) No policy shall be ceded to the facility unless such policy has at least one SDIP point. In addition, a motor vehicle report shall be ordered on all licensed members of the household on all policies ceded to the facility as new business and at least every 3 years thereafter on renewal business for the purpose of determining SDIP points.(g) No policy shall be ceded to the facility solely because of age, place, or area or residence, race, color, creed, national origin, marital status, lawful occupation including military service, or credit information pursuant to RSA 417:4, VIII(e).(h) Each member shall have the following limitations on its cessions to the facility: (1) Each member shall cede no more than 10 percent of its business;(2) Each member shall pay to the facility 2 dollars for each dollar of premium over the limitation that it has ceded to the facility;(3) Each member's cessions shall be calculated based on a fiscal year of January 1 to December 31; and(4) The cession date shall be determined by the effective date of the policy ceded.(i) No cession of a new policy to the facility shall be initiated after the 60th day following the effective date of the new policy and shall not be effective unless written notice is mailed to the insured. Such notice shall include the terms and premiums for coverage.(j) Once no SDIP point(s) is included in the experience period for a renewal policy, the insurer shall offer the renewal policy in the voluntary market.N.H. Admin. Code § Ins 1406.10
(See Revision Note #1 at chapter heading for Ins 1400)
Derived from Volume XLI Number 6, Filed February 11, 2021, Proposed by # 13162, Effective 1/25/2021, Expires 1/25/2031.Amended by Number 6, Filed February 9, 2023, Proposed by #13534, Effective 1/24/2023, Expires 1/24/2033.