211 CMR 79.02 - Definitions

Current through Register 1466, April 1, 2022

As used in 211 CMR 79.00, the following words and phrases shall mean:

Advisory Filing. A filing of Rates, Rating Factors or relativities, Classification Plans, or Rating Manuals, together with Supporting Information, prepared in accordance with 211 CMR 79.09 by a Rating Organization. An Advisory Filing shall not be deemed a Rate Filing under M.G.L. c. 175E, § 7 until a filer submits a Rate Filing to adopt an Advisory Filing, in whole or in part, as of a specified effective date.

CAR or Commonwealth Automobile Reinsurers. The operator of the plan established pursuant to M.G.L. c. 175, § 113H that serves as the Residual Market mechanism for motor vehicle insurance.

CAR ID Codes. The codes as defined in the Commissioner of Insurance's statistical plan for private passenger motor vehicle insurance required by M.G.L. c. 175A.

Classification. The process of grouping risks with similar risk characteristics so that differences in costs may be recognized.

Classification Plan. Any plan, definition or rule for the classification of risks including, without limitation, Classification by territory, driver or vehicle characteristics or use, and experience rating or Merit Rating plans.

Commissioner. The Commissioner of Insurance, appointed pursuant to M.G.L. c. 26, § 6, or his or her designee.

Competitive Market. A market where private passenger motor vehicle insurance rates are not fixed and established pursuant to M.G.L. c. 175, § 113B.

Division. The Division of Insurance created pursuant to M.G.L. c. 26, § 1.

Expenses. That portion of a rate attributable to acquisition, field supervision, collection expenses, general expenses, taxes, licenses, commissions, residual market loads and fees.

Filer. The Insurer, Insurance Company Group or Rating Organization that files the Rate or Advisory Filing at issue.

Insurance Company Group. Two or more Insurers under the same ownership or control, as defined in M.G.L. c. 175, § 206.

Insurer. Any corporation, association, partnership, group or individual authorized to write private passenger motor vehicle insurance in Massachusetts.

Merit Rating. A rating procedure utilizing past motor vehicle accident and traffic violation experience of the operators insured under the policy to forecast future losses by measuring their loss experience against the loss experience of operators in the same Classification to produce a prospective premium credit, debit or unity modification.

Party. The Filer of a Rate Filing that is the subject of a hearing, or has a statutory right to request a hearing pursuant to M.G.L. c. 175E, § 7.

Premium. The final cost of a policy, or coverage within a policy, to an individual policyholder based on the particular drivers and motor vehicles insured under the policy.

Presiding Officer. The Commissioner or any person designated by the Commissioner to conduct hearings and related proceedings and to render findings, rulings and decisions.

Rate. The cost of insurance per exposure unit, whether expressed as a single number or as a prospective loss cost with a factor to incorporate an individual Insurer's Expenses, profit, and variation in loss experience, prior to any application of individual risk variations based on loss or expense considerations, and does not include minimum Premium.

Rate Filing. A filing of Rates, Rating Factors or relativities, Classification Plans, or Rating Manuals, together with Supporting Information, prepared by an Insurer Insurance Company Group or Rating Organization and filed in accordance with M.G.L. c. 175E, § 7.

Rating Factor. A number that is greater than zero that is applied to a Rate to reflect the specific characteristics of the risk, including but not limited to, rating territory, driver or vehicle characteristics, Merit Rating plan, coverage level, and deductible option.

Rating Manual. Any manual of rules and rating procedures applicable to any insurance coverage subject to M.G.L. c. 175E. A Rating Manual shall not include final Rates for any Classification Plan or coverage, but may include rules for the calculation of Premiums from information outside the manual.

Rating Organization. A rating organization duly licensed under M.G.L. c. 175A, § 8.

Residual Market. The private passenger motor vehicles that are insured through policies issued pursuant to M.G.L. c. 175, § 113H and assigned to an Insurer through the Massachusetts Automobile Insurance Plan.

Residual Market Rate Filing. A filing of Rates, Rating Factors or relativities, Classification Plans, or Rating Manuals, together with Supporting Information prepared or submitted by or on behalf of CAR and filed in accordance with M.G.L. c. 175, § 113H(D).

Statistical Information. Loss and expense experience including, but not limited to, data filed in accordance with statistical plans or reporting requirements approved or promulgated by the Commissioner and any compilation or display of such data. For purposes of M.G.L. c. 175E, § 6(a)(2), Statistical Information includes, but is not limited to, Premiums, exposures, loss pure premiums, development factors, average claim cost and frequency trend factors, claim adjustment expense factors, company and commission expense pure premiums, expense trend factors, and miscellaneous Rate level factors including, but not limited to, increased limits, deductible and minor coverage factors, and territorial, class and model year/symbol relativities.

Supporting Information.

(a) the experience and judgment of the Filer and the experience or data of other Insurers or others relied upon by the Filer;

(b) the interpretation of any other data relied upon by the Filer;

(c) descriptions of methods used in making the Rates; and

(d) any other information relied on by the Filer in support of its Filing, as the Commissioner may require to be filed.

Trending. Any procedure for projecting losses to the average date of loss, or Premiums or exposures to the average date of writing, for the period during which the Rates are to be effective.

Under One-percent Company. An Insurer writing less than one percent of the private passenger motor vehicle insurance in Massachusetts, as determined by comparing the total written premium of each Insurer for private passenger motor vehicle insurance, as reported in the Insurer's most recent annual statement, with the total premiums written by all Insurers for private passenger motor vehicle insurance coverage.

Voluntary Market. The private passenger motor vehicles that are not insured through policies issued in the Residual Market.

Notes

211 CMR 79.02
Amended by Mass Register Issue 1355, eff. 12/29/2017.

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