FSCO PPA Filing Guidelines Flashcards
Definitions Expedited approval
Process of regulation in which insurers may have their risk classification systems or rates approved within 30 days after filing with FSCO in accordance with legislation
Definitions Prior approval
Process of regulation in which insurers must have their rates and risk classification systems approved before use in accordance with legislation. Proposed changes to rates and risk classifications can be:
• Subject to the simplified filing guidelines
• Subject to the major filing requirement
Definitions File and use
Process of regulation in which insurers may use the risk classification systems or rates 30 days after filing them with FSCO in accordance with legislation. Filings can be:
• Subject to the major filing requirements, where the filing is the initial application for the category, or the insurer satisfies the criteria established by the supt
• Subject to the minor filing requirements in all other cases
In order for an application to be approved, insurers must have filed rates and risk classification sytems for the following:
Optional accident benefits
- Optional accident benefits (as set out in the Statutory Accident Benefits Schedule (SABS))
- Increased income replacement benefit
- Increased medical and rehabilitation benefit
- Increased caregiver and dependant care benefit
- Increased attendant benefits
- Increased death and funeral benefits
- Indexation benefit
In order for an application to be approved, insurers must have filed rates and risk classification sytems for the following:
Deductibles
- $300 for Comp, AP and SP and DCPD
- $500 for collision or upset coverage
These deductible levels must be establish for all categories of automobile insurance though an insured may choose to purchase higher/lower deductibles
In order for an application to be approved, insurers must have filed rates and risk classification sytems for the following:
A retiree’s discount
A retiree’s discount is mandatory on only the PPA. Discount must be a % of the standard accident benefits coverage rate if principal operator meets the following requirements:
• Be retired
• No income, profession or business
• Be unemployed less than 26 out of the last 52 weeks
• Be at least age 65 or receiving a pension under the CPP/QPP or a pension registered under the Income Tax Act
Filing Approval Process How submitted?
- Must be submitted using web (ARCTICS)
- Statutory time periods do not commence until the filing is deemed complete
- Once approved, need to file the rate manual, containing the revised rates and risk classification(Hard + electronic copy)
- May list pages that cie considers confidential in case of Freedom of Info requests
Importance of Appendix A
All data used in the Actuarial Support should reconcile to the info presented in Appendix A
Nature of the filed rate level or risk classification system changes
- Base rate change not due to off-balancing
- Change to class, limit, ded or other rate differentials
- Change to rating rules
- Changes involving discounts or surcharges
- Algorithm change
- Territorial definition change
- Introducing rate capping procedure
- Anniversary rate-capping report or removal
- Changes to fees
- Changes to opt accident benefit or tort deductible rates
Briefly explain Certificate of the officer/designate
• Required for each filing
• President, CEO, COO, CFO, chief agent for Canada or designate
• Items certified
1) Completeness and accuracy of the information
2) Reasonableness, adequacy, non-excessiveness rates
3) Compliance with filing guidelines
Briefly explain Certificate of the actuary
• Must be FCIA
• Required for rate level changes and for rates of a category not previously written
• Items certified:
1) Authorization by the company
2) Reliability and sufficiency of data for the determination of indicated rate change
3) Indicated rate changes have been calculated in GAAP
4) Reasonableness of the risk classification system
Actuarial Support. Common themes seen throughout majority of sections
- Description of the data used, approach, details of calculations, and support for judgments used
- Identification of outside sources used and applicability
- Exhibition of all data used
- Selection and application of credibility standards and disclosure of the complement
- Generally, use own data as much as possible
- Approaches generally can be expected to remain reasonably constant over the years
Actuarial Support. What general information regarding losses should be included? What kind of losses should be used for ratemaking?
- Whether losses include ALAE
- Type of loss data (AY, CY), valuation dates and sources
- Direct losses (excluding FA allocations) should be used for ratemaking
Actuarial Support. Specific elements/topics relating to losses and additional requirements
- Loss development
- Loss trend: Description of the trend period
- Treatment of large losses: Number of capped losses and the effects
- CAT (or excess claim) procedure
- Other adjustments
Actuarial Support. ALAE What is discussed here and when?
If considered separately from losses
• Same items as losses except large losses that are irrelevant
