Deviations from rating organization Section 2339(c) rates, rules and forms (Old Law under Section 185(4)).

January 3, 1963 SUBJECT: INSURANCE Circular Letter 63-1 WITHDRAWN TO: ALL AUTHORIZED CASUALTY, SURETY, FIRE AND INLAND MARINE INSURERS. Re: Deviations from Rating Organization Rates, Rules and Forms Under Section 185(4) of the Insurance Law. I. Submission of Applications for Deviations and Accompanying Data. Enclosed are copies of forms adopted by this Department to facilitate the processing of applications for approval of uniform percentage deviations from rates of rating organizations. With respect to deviations in effect, the information indicated by the enclosed forms should be submitted to the Department no later than sixty days prior to the renewal date. The following information should also be furnished: 1. (a) The number of states in which the applicant is transacting the kind or type of insurance for which a deviation or renewal of deviation is requested and (b) a list of the states in which the company operates at a deviation for such coverage together with the percentage deviation applicable in each state. 2. Where deviations in other states are now in effect, the weighted countrywide deviation of the company as reflected in the detailed data reported for each year and for the five year experience as a whole. 3. A statement showing New York as well as the countrywide experience at current rate levels and explaining how such determination is arrived at. 4. A statement explaining how the expense ratios for New York were derived. 5. For automobile liability insurance a separate exhibit showing for each year as well as for the five year period the loss experience separately for assigned and non-assigned risk business, and the commission ratio for non-assigned risk business. The applicant may furnish any additional information which it deems pertinent to its application. Section 185(4) as amended continues the requirement that a copy of the deviation application with specification of the basis for the modification shall be sent to the rating organization concerned at the time it is submitted to this Department. II. Deviations to be Effective for Longer Than One Year. Section 185(4) of the Law, as amended effective July 1, 1962, permits approval of deviations for a term exceeding one year. In general, deviations relating to forms and rules will be approved for a term of years. Such deviations currently relate primarily to fire and allied lines: e.g., Deductible Plans for which deviations will be granted for a period of two years, Agreed Amount Clauses for which the period of deviations will be three years and Replacement Cost Insurance (machinery and equipment and furniture and fixtures) for which the three year period will also apply. Percentage deviations, when approved, will be limited to one or two years, the term depending upon the past and indicated future record, with emphasis on expense indications as related to expense provisions in the formulae of rating organizations for the coverages involved. In the event that a deviation is approved for more than one year, this Department may, from time to time during that period, require the submission of data for purposes of interim review. Very truly yours, [SIGNATURE] NEWELL G. ALFORD, JR. ATTACHMENT DEVIATION APPLICATION - NEW YORK Name of Company____________________ #Kind of Insurance___________________% Deviation Applied For Rating Organization____________________ Date Prepared____________________ (Furnish data for each of last 5 years and total for period) 19__ 19__ 19__ $ Amount Ratio $ Amount Ratio $ Amount Ratio NET BASIS Loss Experience: 1. Net Premiums ____ xxx ____ xxx ____ xxx Written 2. Net Premiums ____ xxx ____ xxx ____ xxx Earned 3. Net Losses ____ xxx ____ xxx ____ xxx Incurred 4. Loss Ratio xxx ___% xxx ___% xxx ___% (3/2) Incurred Expenses: * 5. Loss Adjustment ________________________________________ ** 6. Commissions ________________________________________ * 7. Other Acquisition ________________________________________ * 8. General ________________________________________ ** 9. Taxes, Licenses ____ ____ ____ and Fees 10. Total ____ ____% ____ ____% ____ ____% Expenses Incurred ( 5-9) 11. Total Loss & Exp. xxx _____% xxx _____% xxx _____% Ratio ( 4 & 10 ) DIRECT BASIS Loss Experience: 1. Direct Premiums _____ xxx _____ xxx _____ xxx Written 2. Direct Premiums _____ xxx _____ xxx _____ xxx Earned 3. Direct Losses _____ xxx _____ xxx _____ xxx Incurred 4. Loss Ratio (3/2) xxx _____% xxx _____% xxx _____% Incurred Expenses: * 5. Loss Adjustment ________________________________________ ** 6. Commissions ________________________________________ * 7. Other Acquisition ________________________________________ * 8. General ________________________________________ ** 9. Taxes, Licenses and _____ _____ _____ Fees 10. Total Expenses _____ _____% _____ _____% _____ _____% Incurred (5-9) 11. Total Loss & Exp. xxx _____% xxx _____% xxx _____% Ratio (4 & 10) # Indicate if limited to subdivision or class. * Ratio to earned premiums. ** Ratio to written premiums. NYRB - 1/3/63 A (Furnish data for each of last 5 years and total for period) 19__ 19__ 5-Year Total $ Amount Ratio $ Amount Ratio $ Amount Ratio NET BASIS Loss Experience: 1. Net Premiums _____ xxx _____ xxx _____ xxx Written 2. Net Premiums _____ xxx _____ xxx _____ xxx Earned 3. Net Losses _____ xxx _____ xxx _____ xxx Incurred 4. Loss Ratio xxx ___% xxx ___% xxx ___% (3/2) Incurred Expenses: * 5. Loss Adjustment ________________________________________ ** 6. Commissions ________________________________________ * 7. Other Acquisition ________________________________________ * 8. General ________________________________________ ** 9. Taxes, Licenses and _____ _____ _____ fees 10. Total Expenses _____ _____% _____ _____% _____ _____% Incurred ( 5-9 ) 11. Total Loss & xxx _____% xxx _____% xxx _____% Exp. Ratio ( 4 & 10 ) DIRECT BASIS Loss Experience: 1. Direct Premiums _____ xxx _____ xxx _____ xxx Written 2. Direct Premiums _____ xxx _____ xxx _____ xxx Earned 3. Direct Losses _____ xxx _____ xxx _____ xxx Incurred 4. Loss Ratio xxx _____% xxx _____% xxx _____% (3/2) Incurred Expenses: * 5. Loss Adjustment ________________________________________ ** 6. Commissions _____________________________________________ * 7. Other Acquisition ________________________________________ * 8. General ________________________________________ ** 9. Taxes, Licenses and _____ _____ _____ Fees 10. Total Expenses _____ _____% _____ _____% _____ _____% Incurred (5-9) 11. Total Loss & xxx _____% xxx _____% xxx _____% Exp. Ratio (4 & 10) # Indicate if limited to subdivision or class. * Ratio to earned premiums. ** Ratio to written premiums. NYRB - 1/3/63 A DEVIATION APPLICATION - NATIONWIDE EXPERINCE Name of Company____________________ #Kind of Insurance_____________________________% Deviation Applied For Rating Organization____________________ Date Prepared____________________ (Furnish data for each of last 5 years and total for period) 19__ 19__ 19__ $ Amount Ratio $ Amount Ratio $ Amount Ratio NET BASIS Loss Experience: 1. Net Premiums Written _____ xxx _____ xxx _____ xxx 2. Net Premiums Earned _____ xxx _____ xxx _____ xxx 3. Net Losses Incurred _____ xxx _____ xxx _____ xxx 4. Loss Ratio (3/2) xxx _____% xxx _____% xxx _____% Incurred Expenses: * 5. Loss Adjustment ________________________________________ ** 6. Commissions ________________________________________ * 7. Other Acquisition ________________________________________ * 8. General ________________________________________ ** 9. Taxes, Licenses and _____ _____ _____ Fees 10. Total Expenses _____ _____% _____ _____% _____ _____% Incurred (5 - 9) 11. Total Loss & Exp. xxx _____% xxx _____% xxx _____% Ratio (4 & 10) DIRECT BASIS Loss Experience: 1. Direct Premiums _____ xxx _____ xxx _____ xxx Written 2. Direct Premiums _____ xxx _____ xxx _____ xxx 2Earned 3. Direct Losses Incurred _____ xxx _____ xxx _____ xxx Incurred 4. Loss Ratio xxx _____% xxx _____% xxx _____% (3/2) Incurred Expenses: * 5. Loss Adjustment ________________________________________ ** 6. Commissions ________________________________________ * 7. Other Acquisition ________________________________________ * 8. General ________________________________________ ** 9. Taxes, Licenses and _____ _____ _____ Fees 10. Total Expenses _____ _____% _____ _____% _____ _____% Incurred (5 - 9 ) 11. Total Loss & Exp. xxx _____% xxx _____% xxx _____% Ratio (4 & 10) # Indicate if limited to subdivision or class. * Ratio to earned premiums. ** Ratio to written premiums. NYRB - 1/3/63 B (Furnish data for each of last 5 years and total for period) 19__ 19__ 5-Year Total $ Amount Ratio $ Amount Ratio $ Amount Ratio NET BASIS Loss Experience: 1. Net Premiums _____ xxx _____ xxx _____ xxx Written 2. Net Premiums _____ xxx _____ xxx _____ xxx Earned 3. Net Losses _____ xxx _____ xxx _____ xxx Incurred 4. Loss Ratio xxx _____% xxx _____% xxx _____% (3/2) Incurred Expenses: * 5. Loss Adjustment ________________________________________ ** 6. Commissions ________________________________________ * 7. Other Acquisition ________________________________________ * 8. General ________________________________________ ** 9. Taxes, Licenses and _____ _____ _____ Fees Fees 10. Total Expenses _____ _____% _____ _____% _____ _____% Incurred (5 - 9) 11. Total Loss & Exp. xxx _____% xxx _____% xxx _____% Ratio (4 & 10) DIRECT BASIS Loss Experience: 1. Direct Premiums _____ xxx _____ xxx _____ xxx Written 2. Direct Premiums _____ xxx _____ xxx _____ xxx Earned 3. Direct Losses _____ xxx _____ xxx _____ xxx Incurred 4. Loss Ratio xxx _____% xxx _____% xxx _____% (3/2) Incurred Expenses: * 5. Loss Adjustment ________________________________________ ** 6. Commissions ________________________________________ * 7. Other Acquisition ________________________________________ * 8. General ________________________________________ ** 9. Taxes, Licenses and _____ _____ _____ Fees 10. Total Expenses _____ _____% _____ _____% _____ _____% Incurred (5 - 9 ) 11. Total Loss & Exp. xxx _____% xxx _____% xxx _____% Ratio (4 & 10) # Indicate if limited to subdivision or class. * Ratio to earned premiums. ** Ratio to written premiums. NYRB - 1/3/63 B