Michigan DIFS Bulletin 2006-05-INS

STATE OF MICHIGAN

DEPARTMENT OF LABOR AND ECONOMIC GROWTH

OFFICE OF FINANCIAL AND INSURANCE SERVICES

Bulletin 2006-05-INS

In the matter of Discount and Surcharge

Information Respecting Property and Casualty

Group Rate Filings

________________________________________/

Issued and entered

this 19th day of June 2006

by Linda A. Watters

Commissioner

This Bulletin applies to all insurers that submit rate filings or amended rate filings under

Chapters 24 and 26 of the Insurance Code, MCL 2400 et seq. and MCL 2600 et seq.,

where those filings include group rated discounts or surcharges. It supercedes Bulletin

2006-03-INS.

The Commissioner is charged with disapproving rates that are unfairly discriminatory

under MCL 500.2403(1)(d) and MCL 500.2603(1)(d). The Commissioner is authorized

to give notice to an insurer to furnish information upon which it supports its filing

pursuant to MCL 500.2406(1) and MCL 500.2606(1).

The Commissioner has determined that she needs the following information to

determine whether a rate filing meets the standards of Chapter 24 or Chapter 26:

1. A list of the groups receiving discounts or surcharges as of the effective date of

the rate filing. The list may state the actual name of each group or each group

may be identified by a number or letter.

2. For each group, the discount or surcharge factor that is applied. This may be

expressed as a percentage or as a modification factor. No additional actuarial

justification or supporting data is required with a filing, but the Commissioner may

require this information on a case-by-case basis.

3. A statement of where and how in the rating process the group discount or

surcharge is applied

2. For each group, the discount or surcharge factor that is applied. This may be

expressed as a percentage or as a modification factor. No additional actuarial

justification or supporting data is required with a filing, but the Commissioner may

require this information on a case-by-case basis.

3. A statement of where and how in the rating process the group discount or

surcharge is applied. For example, “Liability rate plus collision rate plus

comprehensive rate equals total premium times group discount/surcharge equals

modified or final premium.”

On and after July 1, 2006, where an insurer submits a filing that omits the information

specified above, the staff will give written notice to the insurer to furnish the information.

The Commissioner will have 15 days after the information is furnished to approve or

disapprove the filing.

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Any questions regarding this bulletin should be directed to:

Office of Financial and Insurance Services

Insurance Product Review Section

611 West Ottawa Street

P.O. Box 30220

Lansing, Michigan 48909-7720

Phone: (517) 373-4948

Toll Free (877) 999-6442

_____________________________________

Linda A. Watters

Commissioner of Financial and Insurance Services