11 N.C. Admin. Code 10.1106

Current through Register Vol. 39, No. 11, December 2, 2024

Section 10 .1106 - DEVIATIONS FROM RATES OF THE NORTH CAROLINA RATE BUREAU

(a) Definitions:

(1) Rate deviation refers to the entire collection of differences from the Rate Bureau rates and rating plan that a company has implemented or proposes to implement. Deviation and aggregate deviation are used synonymously. A company shall have only one rate deviation from each Rate Bureau filing and rating plan.

(2) Deviation component refers to any individual part of the aggregate deviation. A deviation component may involve a coverage difference, a different territorial relativity, a different class relativity, a different rate for a particular type of insured, etc. Proposed differences in territorial and class relativities (and other similarly related sets of rating factors) shall be treated as one deviation component.

(3) Introduction of a deviation means that a company has no current rate deviation on file for the particular line but is proposing to implement one.

(4) Modification of a deviation means that a company has a current rate deviation on file for the particular line and that the company proposes to add, change, or eliminate one of the components of the deviation.

(5) Withdrawal of a deviation means that a company has a rate deviation on file that it proposes to withdraw in its entirety.

(b) Filing Guidelines:

(1) All rate deviation filings must be made in triplicate.

(A) The original and one copy shall be sent to the Department.

(B) The second copy shall be sent to the North Carolina Rate Bureau.

(2) A rate deviation shall be introduced, modified, or withdrawn on an individual company basis even if the company is part of a group.

(3) All proposed rate deviations shall be expressed in terms of North Carolina Rate Bureau rates, either as percentages or as dollar amounts.

(4) Filing requirements differ by type of deviation action:

(A) To introduce a deviation, see Paragraph (d) of this Rule.

(B) To modify a deviation, see Paragraph (e) of this Rule.

(C) To withdraw a deviation, see Paragraph (f) of this Rule.

(c) Application of Deviations:

(1) On approval of the introduction, modification, or withdrawal of one or more rate deviations, the department shall transmit to the company a letter of approval listing all the components in effect for that line and company.

(2) All deviation components listed shall be applied to all eligible insureds and deviation components not listed shall not be applied to any insured.

(3) Rate deviations remain in effect until modified or withdrawn.

(4) Modifications of existing rate deviations are permitted at any time.

(5) An unmodified rate deviation may be withdrawn only if both of the following conditions have been met:

(A) The deviation has been in effect for at least six months.

(B) Application for withdrawal is submitted to the department 15 days before the proposed withdrawal date.

(6) A modified rate deviation may be withdrawn only if both of the following conditions have been met:

(A) The deviation has been in effect for at least six months since the date of the last modification.

(B) Application for withdrawal is submitted to the department 15 days before the proposed withdrawal date.

(d) Filings to introduce rate deviations shall contain only the following information:

(1) A cover letter containing the following:

(A) Company name;

(B) Company's Federal Employer's Number;

(C) Line of business involved.

(2) A completed deviation questionnaire obtained from the Property and Casualty Division.

(e) Filings to modify rate deviations shall contain only the following information:

(1) A cover letter containing the following:

(A) Company name;

(B) Company's Federal Employer's Number;

(C) Line of business involved;

(D) Department file number.

(2) A completed deviation questionnaire obtained from the Property and Casualty Division.

(f) Filing letters for withdrawals of rate deviations. Filing letters for withdrawal shall contain only the following information:

(1) A cover letter including the following information:

(A) Company name;

(B) Company's Federal Employer's Number;

(C) Line of business involved;

(D) Department file number.

(2) A statement that the deviation has been in effect for at least six months.

(g) Deviation questionnaires shall contain the following information (if applicable):

(1) Company Name;

(2) Company's Federal Employer's Number;

(3) Company's file number;

(4) Line of insurance;

(5) Subline/Program title;

(6) Previous Department file number, if applicable;

(7) Proposed effective date and rules of implementation;

(8) Company's N.C. volume of business;

(9) Company's N.C. market share;

(10) Company's countrywide volume of business;

(11) Number of N.C. insureds affected;

(12) Percentage of N.C. insureds affected;

(13) Total dollar amount of premiums that will not be collected on an annual basis as a result of this deviation;

(14) Average dollar difference per exposure from manual rates;

(15) Maximum deviation;

(16) If the deviation produces a premium greater than manual for an individual insured, explain;

(17) List of individual deviation components and the proposed action;

(18) Certification by a company officer or filings department head; and

(19) Actuarial certification.

11 N.C. Admin. Code 10 .1106

Authority G.S. 58-2-190; 58-36-30(a) and (c);
Eff. January 1, 1989;
Amended Eff. October 1, 2004; April 1, 2003; February 1, 1991; January 1, 1990;
Pursuant to G.S. 150B-21.3A, rule is necessary without substantive public interest Eff. January 3, 2017.

Authority G.S. 58-2-190; 58-36-30(a) and (c);
Eff. January 1, 1989;
Amended Eff. October 1, 2004; April 1, 2003; February 1, 1991; January 1, 1990.