To: Property/Casualty Insurance Companies writing business in Alaska
Re: Changes in Alaska Regulations 3 AAC 29.200 - .300
Changes in the Alaska Administrative Code, Sections 3 AAC 29.200 - 300 became effective on December 24, 1993. These regulations specify the framework under which insurers shall file their rates under a prospective loss cost system. The purpose of this bulletin is to:
1) distribute a copy of the new regulations
2) explain the changes in the regulations, and how they will be applied to current filings;
3) detail common errors that appear in insurers' loss cost filings, and list the proper procedures for those items; and
4) make available a reference filing adoption form to be used by insurers that are adopting advisory prospective loss costs filed by a rating organization.
An unofficial copy of the new regulations dealing with the use of loss cost rating is enclosed with this bulletin. The official text can be found in the Alaska Administrative Code and its supplements.
Changes in the Regulations:
The primary intent of the revisions to the regulations was to improve the organizational structure and to clarify their intent. For this reason, most of the changes were editorial in nature. The most substantive change is outlined below:
3 AAC 29.240(c) has been revised to read:
The prior regulation did not permit insurers to keep a loss cost adjustment "on file" for use with future loss cost filings made by a rating organization. For that reason, there are currently no insurers for which a loss cost adjustment has been approved for use with future filings.
When filing a new multiplier, an insurer may now request to have its loss cost adjustments remain on file and apply to subsequently filed prospective loss costs by a rating organization. To make this request, an insurer should mark the appropriate box in Item 10 of the Reference Filing Adoption Form.
An insurer that currently has a loss cost adjustment approved for use with a specific rating organization loss cost filing may request that those adjustments be applied to future rating organization filings that are approved by the division. Such a request must be made in writing using the attached "Updated Loss Cost Adjustment Filing Form," and must include the filing number assigned by the division to the original loss cost adjustment filing. If the original filing was made to the division before about February 1, 1993, it is possible that the division did not assign a filing number to the filing. In that case, please include the date of the original filing with your request. Requests for existing multipliers to remain on file must be made separately for each line of business.
If the division does not receive a request to have the currently approved lost cost multiplier be applied to future loss cost filings, then it will deem the multiplier to apply only to the current filing. A new multiplier must then be filed by the insurer when the rating organization makes a new loss cost filing.
Common errors made by companies when filing loss cost filings:
The division has received a number of loss cost adjustment filings containing similar errors. Following the procedures below should enable insurers to avoid common errors, and speed up the filing approval process.
Loss Cost Adjustment Filing Forms:
Attached are new versions of the loss cost filing forms that may be used in Alaska. These forms are very similar to the ones used under the old regulations. Insurers may copy these forms, or may type them into their own computer system. All loss cost adjustment filings made in Alaska must utilize these forms as applicable.
If you have any questions about the use of loss cost rating in Alaska, please contact Barbara Thurston, Actuary, Alaska Division of Insurance, P.O. Box 110805, Juneau, AK 99811-0805, phone (907) 465-2573.
Date: March 3, 1994