Section R590-127-5 - (a) Rates(1) An (a) rate shall be exempt from the filing requirements of Section 31A-19a-203.(2) When an (a) rate is used, the underwriting file shall contain full and supporting factual documentation verifying that the rate is an (a) rate and showing the development of the (a) rate assigned by the underwriter.(a) If the insurer has a guide (a) Manual, the underwriter shall: (i) start rate development with the guide (a) rate suggested in the manual ;(ii) document the steps in the development of an adjusted rate; and(iii) show that the insurer's established procedure in the (a) rate development has been followed.(b) If the insurer does not have a guide (a) rate , the underwriter shall document the steps in the development of the (a) rate, including: (i) an analysis of the specific definable loss potential characteristics;(ii) a comparison to similar risks and their manual rates;(iii) available loss frequency and severity data;(iv) an analysis of current engineering reports; and(v) a discussion of any other pertinent underwriting criteria.(3) As individual risk experience and characteristics are considered by the underwriter in developing the (a) rate, the only rate modification factors that may be applied to an (a) rate are: (a) increased limits factors;(c) premium size factors;(d) expense modification factors; and(4) If automated rating procedures automatically apply other modification factors, the underwriter should consider this fact when developing the initial rate.(5) If an underwriter uses an increased limits factor that is different from the guide (a) increased limits factor in the Commercial Lines Manual, the underwriting file shall contain full and supporting factual data justifying the change in the guide (a) increased limits fa c t o r.(6)(a) When an insurer renews a risk that contains an (a) rate, the underwriting file shall contain the following documentation : (i) the underwriter's reevaluation of the (a) rate assigned; and(ii) justification for the continuation of the (a) rate or the development of any new (a) rate.(b) If the (a) rate previously assigned is revised more than plus or minus 25%, the underwriter's file documenting the (a) rate development for the prior year and the development and explanation for the new (a) rate shall be made available to the commissioner upon request.Utah Admin. Code R590-127-5
Amended by Utah State Bulletin Number 2021-21, effective 10/25/2021