Fla. Admin. Code Ann. R. 69O-189.004 - Deviation Filing Information

F.S., authorize the filing of premium deviations which automatically expire after a period of one year unless refiled and reapproved. Any such premium deviation filing shall include the following information:

(1) Proposed effective date of deviation.

(2) Proposed deviation percentage.

(3) The basis for the proposed deviation including all relevant factors to explain the justification for the deviation request.

(4) Calendar year earned premium, accident year incurred losses, accident year loss adjustment expense, and loss ratios of the preceding three years. Show the ratio of accident year loss adjustment expense to accident year incurred losses for each year, including Florida experience for the company filing for the deviation. If no Florida experience is available for part of the experience period requested, so state and show the experience in the group as a whole.

(5) Provide an exhibit showing anticipated expenses for the period of the deviation. This exhibit should show production expenses and general expenses. All companies are generally expected to have the same taxes and profit and contingencies as included in National Council on Compensation Insurance (hereinafter referred to as NCCI) filings. Do not include taxes or profit and contingencies unless justification for such factors is provided.

(6) As support for expense exhibits, show actual expenses for the latest three years for production and general expenses.

(7) Pursuant to section 627.211(3), F.S., the Office shall consider the following areas when evaluating each company requesting a deviation:

(a) Applicable principles for ratemaking as set forth in sections 627.062 and 627.072, F.S.;

(b) The financial condition of the insurer.

(8) In order to evaluate the financial condition of the company, the following information shall be provided, accompanied by justification, support and explanations where appropriate:

(a) Indicate whether the company's audited financial statements provide unqualified opinions or contain significant qualifications or "subject to" provisions. Yes responses must be explained;

(b) Indicate whether there has been any independent or other actuarial certification of loss reserves shown on the annual statements;

(c) Indicate whether the company's workers' compensation and employer's liability reserves are above the midpoint or best estimate of the actuary's reserve range estimate;

(d) Indicate whether the proposed deviation will have any detrimental affect on the financial status of the company;

(e) Provide historical experience demonstrating the profitability of the company;

(f) Statements, and documentation if necessary, confirming the existence of excess or other reinsurance that contains a sufficiently low attachment point and maximums that provide adequate protection to the company;

(g) Provide any other factors that are considered relevant to the financial condition of the company.

(9) In order for the Office to complete its review of a request for a deviation, the company shall indicate whether the deviation will constitute predatory pricing, including justification for its response.

(10) Pursuant to section 627.211(3), F.S., the Office shall disapprove the request for a deviation if it finds that any of the following conditions exist:

(a) The resulting premiums would be excessive, inadequate, or unfairly discriminatory;

(b) The deviation would endanger the financial condition of the company;

(c) The deviation would result in predatory pricing.

(11) Section 627.211, F.S., states that the deviation is to be applied to the premiums produced by the rating system. Since minimum premiums, expense constants, and premium discounts have been filed based on industrywide experience, no deviation will be allowed to these unless specific justification is provided. Indicate in the filing where the uniform premium deviation will be applied and provide a copy of your manual page showing how the deviation will be applied.

(12) A copy of the filing shall be submitted to the NCCI. To assure that premium deviation filings are acted upon on a timely basis, such filings should be submitted electronically to http://www.floir.com/iportal, 90 days in advance of the proposed effective date.

Notes

Fla. Admin. Code Ann. R. 69O-189.004

Rulemaking Authority 624.308(1) FS. Law Implemented 624.307(1), 624.424(1)(c), 627.211 FS.

New 6-4-92, Formerly 4-189.004, Amended 3-29-05.

New 6-4-92, Formerly 4-189.004, Amended 3-29-05.