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Rules and Regulations of the State of Georgia
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Subject 120-2-77 LARGE COMMERCIAL INSURANCE RISK RATING

Rule 120-2-77-.01 Purpose

The purpose and intent of this Regulation Chapter is to specifically recognize that the adherence to manual rules may not adequately service the unique needs of certain large commercial insurance risks and to permit, but not mandate, negotiated departure from manual rates for certain large commercial insurance risks. Nothing contained herein authorizes noncompliance with the rate making standards codified in O.C.G.A. § 33-9-4.

Rule 120-2-77-.02 Compliance

Classifications, rates, and premiums developed in full compliance with this Regulation Chapter shall not be considered as filed and approved for the purpose of interpreting O.C.G.A. § 33-6-5(6)(B).

Rule 120-2-77-.03 Definitions

For purposes of this Regulation Chapter:

(1) "Commissioner" shall mean the Commissioner of Insurance of the State of Georgia.
(2) "Large Commercial Risk" shall mean a single legal entity (or a combination of legal entities controlled by the same person or group of persons by majority interest in such entities) that meets all of the following criteria:
(a) 25 or more full-time employees at the time of application;
(b) assets in excess of $1,500,000 at the time of application;
(c) annual revenues in excess of $2,500,000; and
(d)
(i) annual property and casualty premium threshold from Georgia operations in excess of $50,000; or
(ii) an annual written property and casualty premium threshold for risks having multistate locations or operations in excess of $250,000.

Rule 120-2-77-.04 Determining Premium Threshold

(1) When determining annual premium threshold, all premiums shall be calculated by the use of filed manual rates or rating systems including all objective discounts (credits) or surcharges (debits), but not including any discretionary rating.
(2) When determining the thresholds referred to in Section 120-2-77-.03(2)(d)(i) and (ii), the following premiums shall be excluded:
(a) premiums written by unauthorized insurers;
(b) primary and/or excess workers compensation premiums, including all premiums derived from policies which lawfully satisfy O.C.G.A. § 34-9-1et seq.;
(c) premiums from any type of coverage which lawfully utilizes uncontrolled rates including certain inland marine, ocean marine, and aviation;
(d) employee benefits premiums;
(e) premiums from errors and omissions coverages including medical malpractice;
(f) accident and sickness premiums; and
(g) any premiums for coverage provided by residual market mechanisms.

Rule 120-2-77-.05 Filed Manual Rates, Rating Plans, Rating Systems or Underwriting Rules

(1) Insurers are not required to adhere to filed manual rates, rating plans, rating systems, or underwriting rules to price a large commercial risk. However, this section shall not apply with respect to:
(a) primary or excess workers compensation, including any alternative products which lawfully satisfy O.C.G.A. § 34-9-1et seq., and
(b) all errors and omissions insurance including medical malpractice.

Rule 120-2-77-.06 Statistical Reporting Requirement

(1) Each insurer shall maintain records concerning all data, statistics, or underwriting rules so that the Commissioner is able to determine whether that insurer is in compliance with applicable laws and Rules and Regulations. Such information shall also be reported through a recognized statistical agency or advisory organization pursuant to O.C.G.A. § 33-9-20. As a minimum requirement, an insurer shall maintain annual experience on number of risks, written premiums, written premiums at manual level, paid losses, and outstanding losses.
(2) The Commissioner may request an insurer to provide the data referenced in paragraph (1) at any time. Any insurer which fails to produce the data within thirty (30) days of such request shall forfeit the privilege afforded by this Regulation for a period of no less than eighteen (18) months.
(3) Reports submitted to demonstrate compliance with the Rules and Regulation of the Office of Commissioner of Insurance Chapter 120-2-41 shall omit the premiums written pursuant to this Regulation Chapter.
(4) Information collected pursuant to this Rule may be requested at any time in connection with a rate filing.

Rule 120-2-77-.07 Finding by the Commissioner

With respect to large commercial risks, upon a finding by the Commissioner that a sufficient degree of competition does not exist for a particular line, class or type of insurance, he or she may suspend all or part of this Regulation Chapter.

Rule 120-2-77-.08 Disclaimer

Each policy issued to a large commercial risk rated in accordance with this Regulation Chapter shall include a disclaimer with language similar to the following: "The rates, rating plans, or resulting premiums provided for in this policy are exempt from the filing and approval requirements of the Office of Commissioner of Insurance."

Rule 120-2-77-.09 Penalties

Any insurer, or any agent, counselor, representative, officer, or employee of such insurer failing to comply with the requirements of this Regulation Chapter shall be subject to such penalties as may be appropriate under the insurance laws of this State.

Rule 120-2-77-.10 Severability

If any provision of this Regulation Chapter or the application of it to any person or circumstance is held invalid, such invalidity shall not affect the provisions or applications of the rules herein which can be given effect without the invalid portion. To that end, the provisions of this rule are declared to be severable.