Modification to Ala. Bulletins 2010-03 and 2009-07

[LOGO] ROBERT BENTLEY GOVERNOR JIM L. RIDLING COMMISSIONER STATE OF ALABAMA DEPARTMENT OF INSURANCE 201 MONROE STREET, SUITE 502 POST OFFICE BOX 303351 MONTGOMERY, ALABAMA 36130-3351 TELEPHONE: (334) 269-3550 FACSIMILE: (334) 241-4192 INTERNET: www.aldoi.gov DEPUTY COMMISSIONER CHARLES M. ANGELL CHIEF EXAMINER RICHARD L. FORD STATE FIRE MARSHAL EDWARD S. PAULK GENERAL COUNSEL REYN NORMAN # BULLETIN NO. 2013-07 TO: All admitted insurers authorized to write property and casualty insurance in Alabama FROM: Jim L. Ridling Commissioner of Insurance JLR DATE: September 20, 2013 RE: Modification to Alabama Bulletins 2010-03 and 2009-07 – Premium discounts or rate reductions for one- or two-family dwellings EFFECTIVE: Policies issued on or after July 1, 2014 RELATED: Bulletin 2009-07 (September 18, 2009) – modified Bulletin 2010-03 (April 20, 2010) - modified This Bulletin modifies Department of Insurance Bulletin 2009-07 (September 18, 2009), as modified by Bulletin 2010-03 (April 20, 2010), relating to implementation of Ala. Code §§ 27-31D-1 et seq. (2009) (Alabama Act 2009-500). 1. Revised Wind Mitigation Discounts. Based on updated hurricane models, the Department has revised its benchmark discounts, as originally provided in the referenced 2009 and 2010 bulletins, to those stated in the table below. There are two differences in these benchmark discounts compared to those provided in the earlier bulletins: (a) The revised benchmark discounts only apply to the wind portion of the policy premium. Insurers must take the appropriate steps to apply them equitably if the insurer only provides an indivisible premium for the policy, and this adjustment must be supported in the insurer's rate filing. (b) These discounts are not to be subject to any "total maximum credits" rule filed by an insurer. If an insured retrofits an existing home or builds a new home to the IBHS FORTIFIED® standards, or builds a new home to standards in the 2006 (or later) International Residential Code®, the insured must receive the entire filed mitigation discount on the wind premium. EQUAL OPPORTUNITY EMPLOYER Bulletin No. 2013-07 September 20, 2013 Page 2 2. Effective dates. The revised benchmark discounts apply to all new and renewal policies effective on and after July 1, 2014, though an insurer may choose to adopt them earlier. 3. Filing requirements. Each insurer is required to have filed and approved discounts, specifically for each of the categories listed on the following benchmark table. If an insurer elects to file discounts different from the benchmark discounts, the filing shall include actuarial justification for the proposed discounts. Insurers are permitted to file additional construction component discounts (e.g., for opening protections, roof shape, etc.) that apply in addition to, but not in place of, the discounts for the above mentioned mitigation categories. An insurer must submit a SERFF™ filing indicating its new discounts, and provide a revised manual including the new discounts. No other provisions of Bulletins 2009-07 and 2010-03 are affected by this Bulletin. ### ALABAMA WIND MITIGATION BENCHMARK DISCOUNTS (Applicable to Wind Premium) These discounts are not to be subject to any "total maximum credits" rule. | Mitigation Category | EXISTING HOME ROOF > 5 Yrs. | EXISTING HOME ROOF ≤ 5 Yrs. | NEW HOME ≤ 5 Yrs. | | --- | --- | --- | --- | | FORTIFIED for Safer Living® | 50% | 60% | 60% | | FORTIFIED Home™: GOLD | 40% | 50% | 50% | | FORTIFIED Home™: SILVER | 35% | 45% | 45% | | FORTIFIED Home™: BRONZE | 20% | 35% | 35% | | 2006 IRC or later | 10% | 20% | 20% | Questions concerning this Bulletin may be directed to: Charles Angell, Deputy Commissioner 334-240-4422 charles.angell@insurance.alabama.gov - or - Craig Devitt, Insurance Rate Manager 334-240-7555 craig.devitt@insurance.alabama.gov JLR/JFM/bc