Rate and Supplementary Rates Informa

tion Filings PURPOSE: Under the Missouri Insurance Code, rate filings made by individual insurers may include the experience of rating organizations. This experience includes the statistical data, prospective loss costs, and supporting information as defined in this regulation. This rule sets forth rules and procedural requirements which the director deems necessary to carry out the provisions of sections 379.321 and 379.888.2., RSMo, as to rate and supporting information filings of property and casualty insurers that refer to and incorporate in whole or in part filings made by rating organizations. (1) Applicability and Scope. This rule applies to the types of insurance described in sections 379.316 and 379.882, RSMo and to insurers making filings under sections 379.321 and 379.888.2., RSMo. (2) Definitions. (A) Expenses means that portion of a rate attributable to acquisition, field supervision, collection expenses, general expenses, taxes, licenses, and fees. (B) The term prospective loss costs means that portion of a rate that does not include provisions for expenses (other than loss adjustment expenses) or profit, and are based on historical aggregate losses and loss adjustment expenses adjusted through development to their ultimate value and projected through trending to a future point in time. (C) Rate means the cost of insurance per exposure unit, whether expressed as a single number or as prospective loss cost and an adjustment to account for the treatment of expenses, profit and variations in loss experience, prior to any application of individual risk variations based on loss or expense considerations, and does not include minimum premiums. (D) Rating organization is an organization licensed pursuant to sections 379.323 and 379.440, RSMo. (E) Supplementary rating information means any manual, minimum premium, rating schedule or plan of policy writing rules, rating rules, classification system, territory codes and descriptions, rating plans, and any other similar information needed to determine the applicable premium for an insured. Supplementary rating information includes factors and relativities, such as increased limits factors, classification relativities, deductible relativities, or similar factors. (F) Supporting information means information, including supporting actuarial data, which includes: i) the experience and judgment of the insurer and the experience or data of other insurers or rating organizations relied upon by the insurer, ii) the interpretation of any statistical data relied upon by the insurer, iii) descriptions of methods used in making the rates, and iv) actuarial, technical or other services made available by a rating organization, or other similar information required to be filed by the director. (3) Rating Organization Reference Filings of Advisory Prospective Loss Costs. (A) Rating organizations may develop and make reference filings containing advisory prospective loss costs. These filings shall contain the statistical data and supporting information for any calculations or assumptions underlying those prospective loss costs. The reference filings shall be filed and made effective in accordance with the provisions of sections 379.321 and 379.888.2., RSMo. (B) An insurer may satisfy its obligation to make rate filings by—i) becoming a participating insurer of a licensed rating organization which makes reference filings of advisory prospective loss costs, ii) filing with the director the information required in section (4), and iii) authorizing the director to accept the reference filing(s) on its behalf. The insurer’s rates shall be the prospective loss costs filed by the rating organization which have been put into effect in accordance with the provisions of subsection (3)(A), combined with the loss cost adjustments which are filed in accordance with section (4) and are in effect for the insurer. (C) The insurer’s loss cost adjustment filing shall become effective in accordance with the provisions of sections 379.321 and 379.888.2., RSMo that apply to the filing and effective date of rates. (4) Required Filing Documents. All insurer filings which refer to a rating organization prospective loss costs reference filing shall include, in the order listed, the following documents: (A) Reference Filing Adoption Form (Exhibit A); (B) Summary of Supporting Information Form (Exhibit B); (C) Expense Constant Supplement Form (Exhibit C, if needed); and (D) To the extent that an insurer’s final rates are determined solely by applying its loss cost adjustments, as presented in the Reference Filing Adoption Form, to the prospective loss costs contained in a rating organization’s reference filing and printed in the rating organization’s rating manual, the insurer need not develop or file its final rate pages with the director. If an insurer chooses to print and distribute final rate pages for its own use, based solely upon the application of its filed loss cost adjustments to a rating organization’s prospective loss costs, the insurer need not file those pages with the director. If the rating organization does not print the loss costs in its rating manual, the insurer must submit its rates to the director. (5) Rating Organization Filings of Advisory Supplementary Rating Information. (A) Rating organizations may develop and make filings of supplementary rating information. These filings shall be made in accordance with sections 379.321 and 379.888.2., RSMo. (B) Any insurer may satisfy its obligations to make filings of supplementary rating information by becoming a participating insurer of a licensed rating organization and by authorizing the director to accept these filings on its behalf. The insurer’s supplementary rating information shall be that filed by the rating organization, subject to any modifications filed by the insurer. (6) Existing Rates and Deviations Remain in Effect Until Disapproved, Replaced, and Modified. Nothing in these procedures shall be construed to require rating organizations or their participating insurers to immediately refile rates in effect. Any participating insurer of a rating organization is authorized to continue to use all rates and deviations in effect until the rates are disapproved or until the insurer makes its own filing to change its rates, either by making an independent filing or by filing a reference filing form adopting the rating organization’s prospective loss costs or modification of those costs. AND INSURANCE AND INSURANCE AUTHORITY: sections 374.045, 379.316, 379.882, and 379.888, RSMo 2016, and section 379.321, RSMo Supp. 2020.* This rule was previously filed as 4 CSR 190-16.045. Original rule filed Jan. 17, 1990, effective May 1, 1990. Amended: Filed Aug. 21, 2020, effective Feb. 28, 2021. *Original authority: 374.045, RSMo 1967, amended 1993, 1995, 2008; 379.316, RSMo 1972, amended 1999, 2001; 379.321, RSMo 1972, amended 1999, 2001, 2002, 2018; 379.882, RSMo 1987; and 379.888, RSMo 1987, amended 1998, 1999, 2001.