2004 Multi State Credit Scoring Data Call

STATE OF MARYLAND MARYLAND INSURANCE ADMINISTRATION 525 St. Paul Place, Baltimore, Maryland 21202-2272 To: Select Private Passenger Automobile Insurers and Homeowners Insurers Re: 2004 Multi State Credit Scoring Data Call Date: May 24, 2004 Bulletin: Property and Casualty 04-9 ***************************************************************************** The Maryland Insurance Administration (“the MIA”) is participating in the multi-state study with several other states of the National Association of Insurance Commissioners in order to determine whether credit scoring has a disparate impact on minority and low income individuals. The State of Missouri will be the lead state for purposes of this study. In order for the Commissioner to conduct this study and in accordance with §19-112 of the Insurance Article, please provide the information as requested in the attached exhibits. The requested data should be provided in the required format. (See attached) Please submit your data via email. Electronic submission is mandatory. No paper documents will be accepted. Data should be submitted to: Cruppel@mdinsurance.state.md.us or marnold@mdinsurance.state.md.us If you have any questions, please contact Fred Santiago, Supervisor, Rates and Forms by phone at (410) 468-2317 or email fsantiago@mdinsurance.state.md.us. You may contact Cathy Ruppel, Insurance Analyst, by phone at (410) 468-2316, by fax at (410) 468- 2306, or by email at cruppel@mdinsurance.state.md.us. Please provide this information no later than August 31, 2004. _________________________________________ Alfred W. Redmer, Jr. Insurance Commissioner attachments ROBERT L. EHRLICH, JR. GOVERNOR MICHAEL S. STEELE LIEUTENANT GOVERNOR ALFRED W. REDMER, JR. COMMISSIONER JAMES V. MCMAHAN, III DEPUTY COMMISSIONER P. RANDI JOHNSON ASSOCIATE COMMISSIONER P&C Proposed Data elements Homeowners and Private Passenger Automobile See “Definitions and Instructions” for parameters of data call, and formats. Motor Vehicle Data is for Liability / PIP Coverage Only Private Passenger Automobile Liability and PIP Coverage Field Name Format Description Code A Company NAIC Code PolNo A Policy Number ZIP + 4 A ZIP + 4 Code, Place of Principle Garaging, formatted XXXXX-XXXX State A Two Letter State Postal or FIPS Code Incpdt N Original policy inception date (first issued), EndDate N Policy End Date -- for policies no longer in force during the data period, including cancellations and nonrenewals Drivers N Number of drivers on policy PremAmt N Annual premium at time this data file was generated Vehs N Number of vehicles on policy CMBSL N Combined Single Limits if applicable BILmt A Bodily Injury Liability Limits (in thousands) (i.e. 100/300) PDLmt N Property damage liability limit BIBas N Liability Annual Base Premium for limits (Dollars) BILmtPA N Bodily injury limits per accident (Do not use dollar signs, decimals, or commas) BILmtPP N Bodily injury limits per person (Do not use dollar signs, decimals, or commas) PIPLmt N PIP Limits if Applicable (No-Fault or Add-On States Only) Deduct N Deductible Amount, if applicable LossRa N Premium adjustment due to prior losses (%) MajCon A The number of major violations used in the driver safety record-rating plan Private Passenger Automobile Liability and PIP Coverage Field Name Format Description MinCon A The number of minor violations used in the driver safety record-rating plan ViolRa N Premium adjustment based on driving record (excluding impact of prior claims) CredObt A “Y/N” – Y if company sought to obtain a credit score for this policy for rating or underwriting, N otherwise CredNH A “Y/N” Y if “no hit.” If company attempted to obtain a credit score, but no score was returned due to insufficient credit data, code Y for “no hit.” If score was obtained, “N” Leave blank if company did not attempt to obtain a score. CredTF A “Y/N” Y if “thin file” If the score was modified, or a different scoring algorithm was employed due to a “thin file,” code “Y” for “thin file.” Do not code “Y” if no score was obtained (i.e. if it was a “no hit”). CredURT A If a credit score was used to transfer an insured to a different company in a group, provide the NAIC code of the company the insured was transferred TO (Provide the NAIC code of this company if insured was transferred from a sister company in a group). CredURF A If an insured in your company was transferred from another sister company in you group, provide the NAIC code of the company from which the insured was transferred FROM. Score N Raw or Unmodified Credit Score ScoreCd A Code assigned to credit score product, if applicable (i.e. if company submits data for more than one product) ScoreRa N Rate Adjustment based on credit score (%) ScoreDt N Date credit score was generated ScoreIns N Insurance Score, reflecting any changes to raw credit score based on non-credit related criteria, if applicable ScInsRa N Premium adjustment based on modified insurance score, if applicable (%) Tier A Rating Tier (Use code that appears in rating manual) TierRa N Premium adjustment based on Tier placement Terr A Territory Code or Number (Use code that appears in rating manual) TerrRa N Territory Rating Factor (must be comparable across all states) AGMRa N Net premium adjustments based on age, gender, and marital status (% of base rate) Discnt N Total Other Net Discount percent of base rate (multi-line, good student, air bag, or any other discount Private Passenger Automobile Liability and PIP Coverage Field Name Format Description excluding credit related discounts, or any premium adjustments related to rating territory, prior losses, driving record, age, gender, and marital status) Surchge N Total Other Net Surcharge Amount (prior claims, etc, excluding credit related surcharges, and any premium adjustments related to territory, prior losses, driving record, age, gender, and marital status) GdrDis A Good driver discount (yes/no) GstDis A Good student discount (yes/no) MdrDis A Mature driver discount (yes/no) ProgType A Program type (i.e. Standard, Preferred, Ultra, etc) Pre N Earned Premium since policy inception Exp N Earned Exposure (Car Years) since policy inception First Named Insured Gender1 A Gender MarStat1 A Marital Status (M, S) DOB1 N Date of Birth (MMDDCCYY Clscd1 A Driver Classification code (from company rating manual) Opp1 A Principal vs occasional operator MJViol1 N Number of major violations MNViol1 N Number of minor violations Fault1 N Number of at-fault accidents MVRdt1 N Date of most recent Motor Vehicle Record (MVR) Second Named Insured Gender2 A Gender MarStat2 A Marital Status DOB2 N Date of Birth (MMDDCCYY) Clscd2 A Driver Classification code (from company rating manual) Opp2 A Principal vs. occasional operator MJViol2 N Number of major violations Private Passenger Automobile Liability and PIP Coverage Field Name Format Description MNViol2 N Number of minor violations Fault2 N Number of at-fault accidents MVRdt2 N Date of most recent Motor Vehicle Record (MVR) DRRA Any rate adjustment based on driving record Add Additional Fields for each Named Insured, replace trailing digits in variable name as appropriate For each vehicle VratCls1 A Vehicle 1 rating Class Code AnnMil1 N Vehicle 1 estimated annual mileage UseVeh1 A Vehicle 1 use (i.e. Pleasure, commute, work, etc.) VratCls2 A Vehicle 2 rating Class Code AnnMil2 N Vehicle 2 estimated annual mileage UseVeh2 A Vehicle 2 use (i.e. Pleasure, commute, work, etc.) Add additional records for each vehicle on policy BIPd N Number of paid claims since policy inception-BI Liability PDPd N Number of paid claims during data year-PD Liability BIUpd N Number of unpaid claims since policy inception –BI Liability PDUpd N Number of unpaid claims since policy inception – PD Liability BILoss N Monetary losses incurred since policy inception–BI Liability Private Passenger Automobile Liability and PIP Coverage Field Name Format Description PDLoss N Monetary losses incurred since policy inception – PD Liability AvgSet N Average claim settlement time in day (close date – report date) ClmCode A Claims reported as per occurrence or per claimant? (code O or C) CnDt N Cancellation or nonrenewal effective date (MMDDCCYY) ClmNo1 A Claim 1 -- Claim Number DrvNo1 N Claim 1 – Driver number who was at fault, consistent with data reported above LsDate1 N Claim 1 – Loss date ReptDt1 N Claim 1 – Report Date ClsDt1 N Claims 1 – Closed Date PayDt1 N Claim 1 – Payment Date if closed with payment Cov1 A Claim 1 --Coverage (BI, PD, or both) Linc1 A Claim 1 –Loss Incurred Amount Total LincBI1 A Claim 1 – Loss incurred amount—BI LincPD1 A Claim 1 – Loss incurred amount—PD Repeat for each additional claim, update variable names (ClmNo1 to ClmNo2, etc) Homeowners Code A Company NAIC Code PolNo A Policy Number Incpdt N Original policy inception date (first issued), EndDate N Policy End Date -- for policies no longer in force during the data period, including cancellations and nonrenewals PolForm A Policy Form Code CovType A Replacement or market value policy (R or M) ZIP + 4 Code A ZIP + 4 Code of Property, formatted XXXXX-XXXX ConstDt N Date of construction Constr A Dwelling construction type “Frame,” “Masonry,” etc. CovALmt N Limit for “Coverage A—Dwelling” CovBLmt N Limit for “Coverage B—Other Structures” CovCLmt N Limit for “Coverage C—Personal Property” CovDLmt N Limit for “Coverage D—Loss of Use” CovELmt N Limit for “Coverage E—Personal Liability” CovFLmt N Limit for “Coverage F—Medical Payment to Others” Pre N Premium earned since policy inception Exp N Earned exposures since policy inception (annual) PremAmt N Annual Premium Amount RCMV N Replacement cost or market value of dwelling (as relevant to policy) BasRt N Base Rate Deduct N Deductible Amount Age1 N Age – First named insured Gender1 A Gender – First Name insured DOB1 N Date of Birth – First Named insured FireCode A Fire Protection Classification Code Homeowners FireRa N Fire Protection Classification Premium Adjustment –Expressed as % increase in base rate for state TerrCode A Other Rating Territory Number or Code TerrRa N Other Rating Territory Class—Expressed as % increase in base rate for state Tier A Tier code, if applicable TierRa N Premium adjustment based on tier placement (%) LossRa N Premium adjustment based on prior losses (%) AGMRa N Premium adjustment based on age, gender, and marital status of insured(s) CondRa N Net Total Amount of surcharges / discounts based on condition and age of property (% of base premium) OthRa N Net Total Amount any other surcharges / discounts, excluding credit score, protection class, or territory, or age, gender, marital status, or prior losses of insured (% of base premium) CredObt A “Y/N” – Y if company sought to obtain a credit score for this policy for rating or underwriting, N otherwise CredNH A “Y/N” Y if “no hit.” If company attempted to obtain a credit score, but no score was returned due to insufficient credit data, code Y for “no hit.” If score was obtained, “N” Leave blank if company did not attempt to obtain a score. CredTF A “Y/N” Y if “thin file” If the score was modified, or a different scoring algorithm was employed due to a “thin file,” code “Y” for “thin file.” Do not code “Y” if no score was obtained (i.e. if it was a “no hit”). CredURT A If a credit score was used to transfer an insured to a different company in a group, provide the NAIC code of the company the insured was transferred TO (Provide the NAIC code of this company if insured was transferred from a sister company in a group). CredURF A If an insured in your company was transferred from another sister company in you group, provide the NAIC code of the company from which the insured was transferred FROM. Score N Credit Score ScoreCd A Code assigned to credit score product, if applicable (i.e. if company submits data for more than one product) ScoreRa N Rating adjustment based on credit score (%) Scoredt N Date credit score was generated (MMDDCCYY) ScoreIns N Insurance score, reflecting any adjustment made to raw credit score based on non-credit criteria Homeowners ScrInsRa N Rate adjustment based on modified insurance score (%) Losses Summary ClmPd N Number of paid claims since policy inception ClmUnPd N Number of unpaid claims since policy inception DLI N Direct monetary losses incurred since policy inception AvgSet N Average claim settlement time in days (report date – paid date) Individual Loss Records ClmNo1 A Claim 1 Claim number LossCode1 A Claim 1 Cause of Loss CovCode1 Claim 1 Coverage (Coverages A-F) LsDate1 Claim 1 Loss Date ReptDt1 Claim 1 Report Date ClsDt1 Claim 1 Close Date PayDt1 Claim 1 Paid Date (or close date if no payment) Linc1 Claim 1 Amount incurred loss LPd1 Claim 1 Amount paid loss Repeat for each claim separately, replace trailing “1” with 2, 3…n. Contact Form Please provide the following information for the individual who will be responsible for answering the data call for you company. Separate forms should be completed for each individual company. Forms should be postmarked no later than June 15th, 2004, and returned to Fred Santiago, Supervisor, Rates & Forms Maryland Insurance Administration 525 St. Paul Place Baltimore, Maryland 21202 410-468-2317 Name of Company (NAIC Number) (Group Number) Name_____________________________________________ Title ______________________________________________ Address ____________________________________________ _____________________________________________ _____________________________________________ Telephone__________________________________________ Fax _______________________________________________ Email______________________________________________ Instructions and Definitions Scope Data is requested for each policy with an inception date no earlier than 1999. The data should include both current and prior insureds. Each automobile and homeowners policy will constitute a separate data record. These data should include both insureds for which a credit score was obtained, and insureds that were not “scored.” All data should be relevant to the insured at the time the file is generated (i.e. current premium levels, rating factors, and so forth). Acceptable File Formats All files must include the variable names indicated in the data call (attached). Acceptable formats include SAS, delimited text, MS Excel, and MS Access. If a different format is desired, please contact the (State) Department of Insurance. All submissions must include a completed survey, plus other materials indicated in the survey. Business Lines Private Passenger Automobile coverage excludes motorcycles, motorhomes, and antique vehicles. Homeowners Coverage excludes mobile homes. Overview of file Each file is designed to allow the user to assess the impact on base rates of various rating variables. Variables ending in “ra” (for “rate adjustment”) should indicate the total rate adjustment as follows: Private Passenger Automobile Insurance Premium Amount = Base Rate + AGMRA (impact of age, gender, and marital status) + TerrRa (Territory rate adjustment) + LossRa (prior loss adjustment) + ViolRa (driving record, violations, etc) +ScoreRa (rate adjustment based on credit score) +Discnt (total of all other discounts, such as good student, etc) +Surchge (total of all other surcharges) Base rate is the rate for given limits, coverages, deductible amount, miles driven, and vehicle characteristics and class. Homeowners Insurance Premium Amount = Base Rate + AGMRa (impact of age, gender, and marital status) + FireRa (Fire protection class) + TerrRa (any other Territory) + LossRa (prior losses) + CondRa (age and condition of insured property) +OthRa (net impact of all other rating variables) + ScoreRa (Credit or insurance Score) Base rate is rate for type of dwelling, coverages, deductible, and limits If an “insurance score” is used in lieu of the raw credit score (in which the insurance score represents the modification of a credit score based on non-credit related factors, then the insurance score should be substituted in the above formulas. So that rate adjustments are comparable across all states, the base rate should be “normalized” to 100, and adjustment expressed as % deviations from 100. Credit-based underwriting / rating other than scores If credit is used, but is not transformed into score, submit the corresponding code representing underwriting / rating based on the credit characteristics. Reporting rate adjustment factors. Several variables (those ending in “ra”) express the premium impact of various factors. These should be reported as percents, with up to two decimals as applicable. Other formats Currency - Do not include the dollar ($) symbol, report to 2 decimals as applicable Dates – All dates must be report as numeric date formats, and as MMDDCCYY Codes – Codes such as territory ID, credit score product code, driver class code, must correspond to those reported in the survey, and reflected in the company’s rating manual. ZIP + 4 Code – is the ZIP + 4 Code for the place of principle garaging or the insured property. The ZIP + 4 Code should correspond with the territory code. Homeowners Cause of Loss – Report as Follows Code Description 1 Fire and Lightning 2 Wind and Hail 3 Burglary and Theft 4 All Other Multistate Study on Insurance-Based Credit Scores Survey Submit completed survey, and a current copy of rating manual, along with the data. 1. Name, title, e-mail address, phone number, fax number, and mailing address for the insurer contact person(s) responsible for fulfilling data call. 2. This survey is for Home / Auto (circle one). Complete separate survey for each line. 3. Provide a complete description of credit score products in use by this company. Include a description of the origin of product (i.e. third party vendor or company) and the dates each product was used. Include all products included in data, and identify with corresponding code. Include a table similar to the following: Credit Score Product Code (matching that used in data) Full name of product Vendor of product Dates Used A B C 4. For each product identified above, include a complete description of how the score is (was) used in underwriting and rating. Include a table of rating factors associated with score ranges, if applicable. If a “raw” credit score is not used, provide the same information for the modified “insurance score.” Also indicate who is scored (“head of household,” “first name insured,” etc). Example Table Score Rate Adjustment Range 1 X% Range 2 . . . . Range N 5. If credit characteristics are used in rating and underwriting, but do not result in a “score,” explain the credit characteristics and underwriting/rating categories used. 6. Provide a table of the decile distribution of scores as follows: Example Decile Number of Insureds Best 10% Second 10% . . . Bottom 10% 7. Provide a table of fire protection classification code and premium adjustment factors. Example Fire Protection District Adjustment Factor 1 X% 2 . . . N 8. Provide a table of rating territory codes and premium adjustment factors. Example Territory Code Adjustment Factor 1 X% 2 . . . N 9. Provide a complete description of rating tiers, including tier code (as reported in data), factors used for tier placement, and rate, coverage, and payment plan differentials between tiers. You can attach relevant sections from your company’s rating manual. 10. Describe the driver classifications used by company (auto only), and explain how insureds are assigned to each driver classification. Display class codes as reported in the data submission. 11. For residential property, provide a table and description of structure types used for underwriting / rating (such a brick, frame), and the codes reported in the data.