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A property and casualty rate filing is a package, not a single document. The exact contents depend on the state, the line, the filing type and whether the company is filing its own rates or adopting an advisory organization's loss costs. The structure, though, is consistent enough across states that most filings can be assembled from the same set of components and then adjusted to each state's checklist.
The NAIC created Uniform Review Standards Checklists so filers can verify a state's requirements before filing. Some states post them on their websites; others build the contents into SERFF's state-specific filing requirements. Either way, the state's current instructions control.
How the package is organized in SERFF
A SERFF filing is entered in a few places, and reviewers read them together.
- General information. Filing type, product coding (type of insurance and sub-type from the NAIC Uniform Property and Casualty Product Coding Matrix), companies, effective dates and the filing description.
- Transmittal fields. The NAIC Property & Casualty Transmittal Document was designed to collect essential information about a filing in a uniform way. The handbook notes that all Uniform Transmittal Document fields are built into SERFF and are part of every SERFF filing.
- Rate/Rule schedule. The rate and rule pages being filed, each identified as new, replacement or withdrawn, with a reference to the previous filing where applicable.
- Supporting documentation. The memoranda, actuarial exhibits, certifications and any state-specific forms.
- Form schedule. Present only when forms are filed together with the rates.
Rate summary data
States collect a standard set of summary figures for each rate filing, now largely through SERFF fields. New Mexico's rule 13.8.2.8 is a representative list: the company tracking number; any corresponding form filing; whether the filing is an increase, decrease or rate neutral; the filing method; the overall indicated change; the overall rate impact; the written premium change and total written premium for the program; the number of policyholders affected; the maximum and minimum percentage changes; and the percentage and effective date of the last rate revision.
These figures have to agree with the actuarial memorandum and exhibits. A mismatch between the SERFF rate summary and the memo is one of the most common and most avoidable objections.
Rate and rule manual pages
The rate and rule pages are what the company is asking to use. Most filings include:
- Clean pages. The final manual pages as they will be used.
- Comparison pages. A redline or side-by-side version showing what changed. New Hampshire, for example, requires a side-by-side comparison that clearly shows the changes, additions or deletions to the rating manual, filed on the Rate/Rule schedule with the final copy.
- Rules and rating algorithm. Rating rules, the order of calculation, rounding, minimum premiums and any premium capping or transition rules.
Where a company relies on an advisory organization's manual, the company-specific pages (such as its loss cost multipliers, deviations, minimum premiums and exceptions) are filed alongside a reference to the advisory filing.
Explanatory memorandum
The explanatory memorandum, sometimes called the filing memorandum or cover letter, describes the filing in plain terms for the reviewer. New Hampshire's Ins 5001.04 is a good model of what states expect: a description of the program and its intent; a description of each rate or rate change, including new or unusual features and changes to prior methodology; a prominent statement if the filing includes a new or changed predictive or telematics model; and proposed effective dates for new and renewal business.
Actuarial memorandum and exhibits
The actuarial memorandum explains the development of the rates. The exhibits behind it typically include the following.
| Exhibit | What it shows |
|---|---|
| Rate level indication | The calculation of the overall indicated change by year and in total |
| Premium on-level | Rate change history and current-level factors applied to historical premium |
| Loss development | Triangles of paid or incurred losses (and often counts), age-to-age factors, averages, selections and tail |
| Trend | Frequency, severity or pure premium data, fitted trends, selected trends and trend periods |
| Catastrophe and large loss | Removed losses and the replacement provision, including modeled results where used |
| Loss adjustment expense | DCC and A&O provisions and their support |
| Expenses and profit | Several years of expense ratios by category, selected fixed and variable provisions, profit and contingency provision and investment income |
| Credibility | Credibility standard, weights and complement |
| Rating factors | Support for base rates and relativity changes, including model documentation where relevant |
| Rate impact | Distribution of changes by policyholder, by rating variable and by territory, plus the largest increases |
Some states prescribe exhibits by rule. New Mexico's 13.8.2.17 lists, for rate filings that require supporting information, three consecutive years of direct written and earned premium, paid losses, changes in loss reserves including IBNR, incurred losses, the underlying data for loss development and trend factors, actual expenses by category, investment income by source and allocation, and the average schedule rating credit or debit. It also requires an exhibit showing the maximum rate increase any policyholder may experience if the transmittal does not show it.
Loss cost adoption forms
When a company adopts an advisory organization's prospective loss costs, the filing usually includes the NAIC Loss Cost Filing Document (or the state's version of it), which calculates the company's loss cost multiplier from its loss cost modification and expense and profit provisions. If expense constants are used, a separate expense constant supplement applies. See advisory organizations and loss costs.
Company rates or adopted loss costs
Company rates
- An actuarial memorandum explaining how the rates were developed
- Exhibits such as the rate level indication, loss development, trend and rate impact
- Rate and rule pages, clean and with comparison pages
Adopted advisory loss costs
- A reference to the advisory organization's filing
- Company-specific pages such as loss cost multipliers, deviations, minimum premiums and exceptions
- The NAIC Loss Cost Filing Document, or the state's version, calculating the loss cost multiplier
- An expense constant supplement if expense constants are used
Certifications and authorizations
Requirements differ widely, so treat this list as a prompt to check the state's instructions rather than a rule:
- Identification of the responsible actuary and, where required, an actuarial certification.
- Officer certifications required by state law for particular lines or filing types.
- A third-party filer authorization when a consultant or filing service submits on the company's behalf. New Hampshire, for example, requires a signed and dated letter from the insurer authorizing the third-party filer, and states that the insurer cannot delegate responsibility for the filing's content.
- State-specific forms and supplements listed on the state's checklist.
Before you submit
- Confirm the figures in the SERFF rate summary, the explanatory memorandum, the actuarial memorandum and the exhibits are identical.
- Check that every rate page on the Rate/Rule schedule has a comparison version and that page identifiers and editions match the manual index.
- Cross-reference related filings. New Hampshire requires forms, rates and rules filed separately to be cross-referenced by SERFF tracking number, and a corrected resubmission to cite the previous tracking number.
- Run the state checklist line by line, including state forms and certifications.
- Read the package as the reviewer will: memo first, then exhibits, then pages.
A complete first submission is the most reliable way to shorten review. The NAIC handbook notes that much review time is lost to correspondence that a complete filing would have avoided.
Sources
- NAIC, Product Filing Review Handbook (2024)
- New Mexico Administrative Code 13.8.2: Rate Filings by Insurers and Rate Service Organizations
- New Hampshire Code of Administrative Rules, Ins 5000: Standards and Procedures for the Filing of Property and Casualty Insurance Forms and Rates
- NAIC, Loss Cost Filing Document (Other Than Workers' Compensation): Calculation of Company Loss Cost Multiplier
General information about regulatory practice, not legal or actuarial advice. Requirements differ by state, line and filing; check the current rules with the department of insurance before you file.