Bulletin Number 2023-05 Notice of Tentative 2024 Credit Property Ins. Rates and Opportunity to Request a Hearing

South Carolina Department of Insurance Capitol Center 1201 Main Street, Suite 1000 Columbia, South Carolina 29201 Mailing Address: P.O. Box 100105, Columbia, S.C. 29202-3105 Telephone: (803) 737-6160 BULLETIN NUMBER 2023-05 HENRY MCMASTER Governor MICHAEL WISE Director TO: Insurers Writing Credit Property Insurance in South Carolina in Conjunction with Consumer Credit Transactions subject to 1966 S.C. Act No. 988, Consumer Finance Law FROM: Michael Wise /ttJ..J /4_)~ Director SUBJECT: Notice of Tentative 2024 Credit Property Insurance Rates and Opportunity to Request a Hearing DA TE: August 1, 2023 I. NOTICE OF TENTATIVE CREDIT PROPERTY INSURANCE RATES Regulation 69-11 .1, Regulation of Credit Insurance, requires the South Carolina Department of Insurance to promulgate tentative rates for credit property insurance by August 1 of each year. The tentative rates are those the Department believes may reasonably be expected to produce a loss ratio of not less than fifty percent (50%) in the following calendar year. This bulletin constitutes official notice of the tentative rates for 2024. The Department has reviewed past loss experience for credit property insurance written in conjunction with consumer credit transactions subject to the Consumer Finance Law. The aggregate 2022 loss ratio at prima facie rates is nineteen and nine tenths percent (19.9%). The aggregate 2021 loss ratio at prima facie rates was thirty-two and four tenths percent (32.4%). Generally, it appears that previous rate decreases are causing increases to the aggregate loss ratio, though year-to-year fluctuations do occur. Since there is a statutory minimum premium of $3, we will continue to monitor the results to be assured that further reductions in rates will effectively increase the aggregate loss ratio. The average loss ratios from 2007 to 2022 by coverage are as follows: Coverage Automobile, Fire and Theft - Single Interest Automobile Collision - Single Interest Loss Ratio 42.5 percent 42.5 percent ) Household Goods - Single Interest Household Goods - Dual Interest 84.5 percent 5.3 percent We propose to hold the rate for Household Goods - Single Interest coverage at the 2023 level and to decrease the other rates ten percent from their current levels. The tentative rates expressed as a percentage of the total amount of the loan are as follows: Coverage Automobile, Fire and Theft - Single Interest Automobile Collision - Single Interest Household Goods - Single Interest Household Goods - Dual Interest Tentative Rate 0.55 percent 2.06 percent 5.81 percent 0.61 percent Based on premiums earned in 2022, the overall impact resulting from these tentative rates would be a decrease of nine and eight tenths percent (-9.8%). II. OPPORTUNITY FOR A HEARING Regulation 69-11.1.C.( 4) provides that "every insurer which feels aggrieved by any of the rates so promulgated shall have fifteen days to request a public hearing with respect to such rate or rates." Accordingly, all requests for a hearing must be submitted to the Department in writing on or before August 16, 2023. Please direct any requests for a hearing to the attention of: Gwendolyn McGriff South Carolina Department of Insurance Post Office Box 100105 Columbia, South Carolina 29202-3105 All requests must include documentation supporting your position that the tentative rates for credit property insurance need to be changed. After any requested hearings have been held, the final rate or an affirmation of the tentative rate shall be sent to all companies before October l, 2023. III. QUESTIONS Any questions or concerns about this Bulletin should be submitted in writing to the attention of: Will Davis, FCAS, MAAA South Carolina Department of Insurance 1201 Main Street, Suite 1000 Columbia, South Carolina 29201 Facsimile: (803) 737-6145 E-mail: WDavis@doi.sc.gov } }