N.J. Admin. Code § 11:4-9.4

Current through Register Vol. 56, No. 24, December 18, 2024

Section 11:4-9.4 - Prospective loss costs filing requirements for insurers

(a) In order for an insurer to incorporate a rating organization's or advisory organization's approved prospective loss costs to establish its own rates, an insurer shall:

1. Be a participating insurer in the rating organization; and

2. File its loss costs multiplier using the Filing Adoption Form (as set forth in Appendix A to this subchapter and incorporated herein by reference). An insurer's loss costs multiplier shall be filed and become effective in accordance with N.J.S.A. 17:29A-1 et seq. and N.J.A.C. 11:1-2. An insurer's final rates shall be a combination of the approved prospective loss costs and the approved loss costs multiplier.

i. An insurer may file modifications to the rating organization's approved prospective loss costs filing based on its own anticipated experience by using the Filing Adoption Form. Supporting documentation shall be filed for any modification (upwards or downwards) to the rating organization's prospective loss cost filings.

ii. An insurer's approved loss costs multiplier shall remain in effect until the insurer withdraws the multiplier or until a revised Filing Adoption Form is filed by the insurer and approved by the Department.

(b) An insurer may vary expense loads by individual lines, sublines or classifications of insurance. An insurer may use variable or fixed expense loads or a combination of these to establish its expense loadings by using the Filing Adoption Form, items 17-21.

1. An insurer shall provide documentation to support its profit loading, which shall demonstrate how the insurer reflects investment income.

2. An insurer shall provide the overall dollar impact and the number of New Jersey policies affected by the filing.

(c) Any participating insurer of a rating organization or advisory organization shall continue to use all rates and deviations currently in effect for its use until disapproved pursuant to N.J.S.A. 17:29A-14 or until the insurer revises its rates, either upon approval of an independent filing or upon approval of a Filing Adoption Form.

(d) Once an insurer has an approved loss costs multiplier on file with the Department, such multiplier shall be deemed to be automatically applicable to subsequent rating organization or advisory organization prospective loss costs filings, subject to the following requirements:

1. An insurer intending to use a subsequent revision of approved prospective loss costs as of the effective date of the rating organization or advisory organization shall file with the Department new rate pages to reflect the revision only if final printed rate pages were previously submitted;

2. An insurer intending to use a subsequent revision of approved prospective loss costs but with a different effective date, shall file with the Department its proposed effective date prior to the effective date of the rating organization's or advisory organization's prospective loss costs;

3. An insurer intending to use a subsequent revision of approved prospective loss costs and to change its loss costs multiplier shall file a revised Filing Adoption Form for approval in accordance with N.J.S.A. 17:29A-1 et seq. and N.J.A.C. 11:1-2 prior to the effective date of the rating organization's or advisory organization's prospective loss costs filing; and

4. An insurer not intending to use a subsequent revision of approved prospective loss costs, shall notify the Department prior to the effective date of the rating organization's or advisory organization's prospective loss costs filing. The insurer shall file a Non-Adoption of Prospective Loss Cost Form (as set forth in Appendix B to this subchapter and incorporated herein by reference) with the Department.

(e) When filing to adopt a rating organization's or advisory organization's prospective loss cost filing, the insurer shall also file with the Department, within 30 days of the effective date of the insurer's rates, either:

1. A final printed manual page indicating the loss cost multiplier to be applied to the rating organization's or advisory organization's prospective loss costs, including its effective date; or

2. Final printed manual pages indicating the final rates developed by application of the loss cost multiplier to the rating organization's or advisory organization's loss costs, including the effective date.

(f) Insurers shall provide consumer notification of the insurance rate increase in accordance with N.J.A.C. 11:1-45, Notification to Policyholders of Consumer Insurance Rate Increases.

N.J. Admin. Code § 11:4-9.4

Amended by R.2006 d.132, effective 4/17/2006.
See: 37 N.J.R. 4859(a), 38 N.J.R. 1743(a).
Added the term "advisory organization" and made minor grammatical changes throughout; deleted former (b)1; recodified former (b)2 and 3 as (b)1 and 2; added (f).