Subject 120-2-41 MODIFICATIONS TO CLASSIFICATIONS OF RISKS
This Regulation is made and promulgated by the Commissioner of Insurance pursuant to the authority set forth in O.C.G.A. Section 33-2-9 and Act 669, Ga. L. 1987, p. 911.
The purpose of this Regulation is to establish guidelines and limitations for premium modification rating plans.
|(1)||"Commissioner" shall mean the Commissioner of Insurance of the State of Georgia.|
|(2)||"Line of coverage" shall mean each separate line from the annual statement "Exhibit of Premiums and Losses" required to be filed by Rule 120-2-18-.04 of the Rules and Regulations of the Georgia Insurance Department.|
|(3)||"Plans" or "Rating Plans" shall mean rating plans which modify classification rates to produce rates for individual risks.|
|(4)||"Regulation" shall mean Chapter 120-2-41 of the Rules and Regulations of the Georgia Insurance Department.|
|(1)||The standards and limitations of this Rule apply to rating plans which establish standards to modify classification rates to produce rates for individual risks.|
|(2)|| For plans based on the past loss
experience of the individual risk, the insured must furnish proof of the loss
record from the previous insurer or insurers for the lesser of:
requirements of paragraph (2) of this Rule do not apply to an experience rating
modifier published by the National Council on Compensation Insurance or by the
Surety Association of America and otherwise may be waived if the loss record is
not available due to:
|(4)||It shall be permissible for an insurer to quote, bind coverage, and issue a policy based on the insured's statement of the previous loss record. However, the policy must be endorsed to eliminate the experience rating modification if proper proof of the loss record is not furnished within sixty (60) days of the effective date of the policy.|
|(5)||Except as provided in Rule 120-2-41-.05, for plans based on factors other than past loss experience, the maximum debit shall be fifteen percent (15%) and the maximum credit shall be fifteen percent (15%).|
|(1)||Notwithstanding paragraph (5) of Rule 120-2-41-.04, plans based on factors other than past loss experience to which this Regulation applies may utilize a maximum debit of forty percent (40%) and a maximum credit of fifty percent (50%) if the insurer shows to the satisfaction of the Commissioner that the amount collected on an annualized basis from all insureds under the line of coverage of the rating plan of the insurer is not less than ninety-five percent (95%) but not more than one hundred five percent (105%) of an amount represented by the product of the filed rate amount on the line of coverage of the rating plan multiplied by the annualized number of insureds.|
|(2)||For purposes of implementation of this Regulation, an insurer is deemed to be in compliance, as of January 1, 1988, with paragraph (1) of this Rule.|
|(3)||Reporting of compliance for continued usage of the debit and credit percentages under paragraph (1) of this Rule shall be on an annual basis which shall coincide with the expiration date of policies, if such policies issued have a uniform annual expiration date. Otherwise, reporting shall be made as of December 31 of each year. Reports shall be due in the Office of the Commissioner on the reporting date of the annual statement as provided by law.|
|(4)||If a report shows a failure to comply with paragraph (1) of this Rule regarding collected amounts, the insurer shall use the percentages specified under paragraph (5) of Rule 120-2-41-.04 for one (1) year following the reporting date specified in paragraph (3) of this Rule upon all policies issued or renewed under such rating plan, unless the insurer files new rates for such rating plan which, under such submission, will achieve compliance. Additionally, a failure to file new rates shall be analyzed for a failure to comply with paragraphs (1) through (6) of O.C.G.A. Section 33-9-4.|
This Regulation shall not apply to:
|(a)||automobile insurance rating plans based on the driving record of insured drivers;|
|(b)||retrospective rating plans; or|
|(c)||individual risk filings.|
Plans and modifications not subject to this Regulation or exempted from this Regulation under paragraph (3) of Rule 120-2-41-.04 or Rule 120-2-41-.06 shall be subject to such limitations as are contained in the rate filing accepted by the Commissioner.
All plans on file with the Commissioner not in compliance with this Regulation will be considered withdrawn as of the effective date of this Regulation. New filings of such plans will be subject to prior approval.
Any insurer, agent, representative, officer or employee of such insurer failing to comply with the requirements of this Regulation shall be subject to such penalties as may be appropriate under the insurance laws of this State.
If any provision of this Regulation, or the application thereof to any person or circumstance, is held invalid by a court of competent jurisdiction, the remainder of the Regulation or the applicability of such provision to the persons or circumstances shall not be affected.
This Regulation shall become effective January 1, 1988.