News

On May 12, 2020, the New Jersey Department of Banking and Insurance (“DOBI”) issued Bulletin 20-22 ordering insurers to make an initial premium refund or other adjustment to all New Jersey policyholders adversely impacted due to overstatement or misclassification of  risk resulting from the COVID-19 pandemic. Insurers are directed to provide each affected policyholder with a notification or the amount of the refund or adjustments by June 15, 2020. Insurers who can demonstrate that its rates are not excessive, inadequate, or unfairly discriminatory, or otherwise contends it should not be subject to the terms of this Bulletin, are to provide information to the DOBI by June 1, 2020.
In addition, Order No: A 20-03 requiring various data reports was issued on the same date and is referenced in the bulletin. For insurer groups with more than $20,000,000 in 2019 written premiums, the order requires bi-weekly data reports, with the first report due by May 19, 2020. All insurer groups must provide to the Department a report containing all actions taken, and contemplated future actions, to reduce premium in response to or consistent with Bulletin No. 20-22 on a monthly basis, with the first report due by June 1, 2020.
Perr&Knight submits more filings to the DOBI than any other consulting firm. We are available to discuss any questions or unique situations with the DOBI on your behalf. We can also provide information on what other companies have done, to the extent this information is publicly available in New Jersey or other states. Finally, we can prepare and submit your required filing and reports to the New Jersey DOBI.
As we stated when the California Department of Insurance (“CDI”) Bulletin was released in April, we expected that other states may issue similar bulletins in the future. Those familiar with the CDI bulletin will see some similarities in the New Jersey bulletin. New Jersey’s Bulletin 20-22 requires the action of all companies who write the following lines of business in New Jersey:

• Private passenger automobile insurance;
• Commercial automobile insurance;
• Workers’ compensation insurance;
• Commercial multiple peril insurance;
• Commercial liability insurance;
• Medical malpractice insurance; and
• Any other line of coverage where the measures of risk have become substantially overstated as a result of the COVID-19 pandemic.

These are the same seven lines mentioned in the CDI bulletin. The DOBI bulletin is also consistent with the CDI bulletin in that it allows insurers to apply a uniform premium reduction for all policyholders in an individual line of insurance or reclassify risks in accordance with existing rating plans without prior approval. There are some key differences in the DOBI bulletin compared to the CDI bulletin:

• The CDI bulletin does not require any rate, rule or form filings to be submitted, while the DOBI bulletin requires all licensed and admitted insures to submit all components of their refund program via the System for Electronic Rates and Forms Filing (“SERFF”) no more than 15 days after implementation.
• The CDI bulletin specifies that initial premium refunds are to be made for the months of March and April while the DOBI bulletin orders the refunds “for each month that the public health emergency is in effect.”

In summary, based on Bulletin 20-22 as well as Order No: A 20-03, the following are the key dates for information required of insurers writing the lines listed above in New Jersey:
A. By May 19, 2020, insurer groups writing any of the enumerated lines with more than $20,000,000 in 2019 written premium for all property/casualty lines combined, must report the following information to the DOBI:

1. 1. New Jersey Claim data including measures of claim frequency and claim severity, and
   2. Premium collection activity including measures of premium billed or due and actual premiums collected.

This data is needed for the following three time periods:

• • • January 1, 2020 to March 21, 2020;
    • March 22, 2020 to the date of the report; and
    • the same time period as provided in b, however for 2019.

In addition to May 19, these data reports are to be provided bi-weekly on the following dates: June 2, June 16, June 30, July 14, July 28, August 4, August 18, September 1 and September 15; the data provided in each report shall be the most current available through the preceding week’s end.  For the report due May 19, 2020, the data should be through May 15, 2020.
B. By June 1, 2020, all insurer groups writing any of the enumerated lines are to submit a report containing all actions taken, and contemplated future actions, to reduce premium in response to or consistent with the bulletin. The report is to include New Jersey-specific information and an explanation and justification for the amount and duration of any premium reductions based on the company’s claim and premium data.

The report shall also provide monthly and overall totals for the following:

1. 1. 1. Aggregate premium prior to, and subject to, application of refunds or adjustments;
      2. Aggregate premium refunds and adjustments;
      3. The number of in-force policies, and
      4. Number of policyholders receiving refunds or adjustments.

In addition to June 1, the same reports are due on July 1, August 1 and September 1.  The  information provided in each report is to reflect activity through the preceding month’s end.
C. By June 1, 2020 any insurer, writing the enumerated lines, that can demonstrate its rates are not excessive, inadequate, or unfairly discriminatory, or otherwise contends it should not be subject to the terms of the bulletin, it shall submit its basis for such contention and supporting documentation to the DOBI.
D. By June 15, 2020, the following is to be provided to each affected policyholder:

1. 1. 1. A notification of the amount of the refund or adjustment.
      2. An explanation of the basis for the adjustment, including a description of the policy period that was the basis of the premium refund and any changes to the classification or exposure basis of the affected policyholder.
      3. An opportunity to provide their individual actual or estimated experience.

E. No later than 15 days after implementation, licensed and admitted insurers must submit all components of their refund program, including but not limited to, a rate, rule, and/or form filing via the SERFF documenting the refund program.
If there is anything that Perr&Knight can do to assist your company to comply with the requirements in New Jersey or any other state, please complete our contact form.

On April 13, 2020, the California Department of Insurance (“CDI”) issued a Bulletin ordering the refund of premium to drivers and businesses affected by the COVID-19 emergency. Based on our discussions with the CDI, they are expecting a report by June 12 from every company with California policyholders in any of the lines of business listed in the Bulletin.
With millions of dollars being returned to policyholders, it is important to have a thorough understanding of the CDI’s premium refund order. Perr&Knight has had multiple discussions with the CDI to gain a better understanding of the requirements, which will allow us to provide greater insight to companies on how to respond to the Bulletin. Our actuaries are assisting the insurance industry with the following:

• Estimating COVID-19 Impact on Losses:  We can estimate the impact COVID-19 is having on a company’s losses. At this point, there is often limited data available, which makes estimating the impact difficult. Although frequencies may be decreasing, some lines such as personal and commercial auto may be seeing increasing severities due other factors, such as an increase in speeding due to less traffic congestion. It is important to have a clear understanding of all risk factors that are changing.  Our actuaries are actively reviewing the trends in the marketplace for multiple carriers.
• Calculating the Premium Refund: There a number of factors that go into calculating the premium refund including the CDI’s expectations on how the refund should be calculated.  We are helping companies take all these under consideration in determining the amount that will be returned to policyholders.
• Preparing the COVID-19 Report:  Perr&Knight is assisting companies in preparing and submitting a COVID-19 Report to the CDI that meets the requirements in the Bulletin.  This includes determining whether an applicable product line is subject to the Bulletin and requires a response.

If you need assistance with responding to the California premium refund order or have any questions on the Bulletin, please let us know.
Contact:
Scott Knight
Managing Principal
Chief Sales Officer
310.889.0947
sknight@perrknight.com

On April 13, 2020, the California Department of Insurance (“CDI”) issued a Bulletin ordering the refund of premium to drivers and businesses affected by the COVID-19 emergency. The implications of the Bulletin are complex and require consideration of various aspects of an insurer’s business model. Perr&Knight is having discussions with the staff at the CDI regarding their expectations for compliance with the Bulletin. We have extensive experience with rate, rule and form filings in California as we submit more filings to the CDI than any other consulting firm and will be assisting insurers with complying with the CDI requirements to ensure that the appropriate adjustments are made for the change in risk and/or reduction in exposure.
The Bulletin requires action of all companies who write the following lines of business in California:

• Private passenger automobile insurance
• Commercial automobile insurance
• Workers’ compensation insurance
• Commercial multiple peril insurance
• Commercial liability insurance
• Medical malpractice insurance
• Any other line of coverage where the measures of risk have become substantially overstated as a result of the pandemic.

The following is required of each California insurer writing the lines above:

1. By June 12, 2020, report the following information to the CDI:

a. An explanation and justification for the amount and duration of any premium refund, and how those measures reflect the actual or expected reduction of exposure to loss.

b. Monthly and overall California-specific totals for the following:

i. Percentage of refund applied,
ii. Aggregate premium prior to, and subject to, application of refund,
iii. Aggregate premium refund,
iv. Average premium before and after refund,
v. Average percentage of refund, applied to each policyholder,
vi. Number of in-force policies, and
vii. Number of policyholders receiving refund.

2. By August 11, 2020:

a. Provide each affected policyholder, if applicable, with a notification of the amount of the refund, a check, premium credit, reduction, return of premium, or other appropriate premium adjustment.

b. Provide an explanation of the basis for the adjustment, including a description of the policy period that was the basis of the premium refund and any changes to the classification or exposure basis of the affected policyholder.

c. Offer each insured the opportunity to provide their individual actual or estimated experience. For automobile policies, this includes an invitation to provide updated mileage estimates as appropriate.

Perr&Knight is available to discuss any questions or unique situations with the CDI on your behalf. We can also provide information on what other companies have done, to the extent this information is publicly available in California or other states. Finally, we can prepare and submit your required report to the California DOI.

We expect that other states may issue similar bulletins. If there is anything that Perr&Knight can do to assist your company in California or any other state, please complete our contact form.

As you may be aware, the California Department of Insurance (“CDI”) issued regulations prohibiting the use of gender in automobile insurance rates. If insurance companies use gender in determining the rates for personal auto insurance, they will be required to submit a filing removing gender from the company’s class plan by July 1, 2019. The regulations only mention a filing deadline and do not specify a required effective date.
Companies have the option to submit a simplified revenue neutral class plan filing, which is described in Section 2632.11(c)(1) of the regulations. Companies may also comply by submitting a full class plan filing that includes a sequential analysis supporting the proposed changes and compliance with the factor weights. However, this approach has some drawbacks, which may result in most companies choosing the simplified filing approach.
If you need assistance with the class plan filing or have any questions on the new regulations, please let us know. We have discussed the regulations with the Division Chief of the Rate Regulation Branch at the CDI and understand the advantages and disadvantages of the simplified and full class plan filing approaches.
Contact us with any questions on new regulations or if you need assistance with the class plan filing.
Contact:
Scott Knight
Managing Principal
Chief Sales Officer
310.889.0947
sknight@perrknight.com

If your company is contemplating a change in the actuary that issues the Statement of Actuarial Opinion on the company’s reserves, please consider obtaining a quote from Perr&Knight. We are one of the top 10 largest property and casualty actuarial consulting firms in the United States and employ more than 100 insurance professionals, including 25 Fellows and Associates of the Casualty Actuarial Society and the Society of Actuaries. Our actuaries have experience with nearly all property and casualty and accident and health lines of business.
Perr&Knight provides the following reserving services:

• Loss reserve analyses;
• Long duration contract unearned premium reserve testing;
• Statements of actuarial opinion; and
• Schedule P preparation/review.

Our actuaries understand that each company has unique characteristics associated with their operations. We work with our clients to obtain a complete understanding of their business so that we can produce the most accurate reserve analysis.
Contact us with any questions about Perr&Knight’s services or if you would like to obtain a quote.
Contact:
Brett Horoff, ACAS, ASA, MAAA
Principal & Consulting Actuary
Director | Consulting Services
310.889.0944
bhoroff@perrknight.com

Are you getting the most out of your data? Whether it be in personal lines pricing, commercial lines underwriting, claims handling or fraud detection, your data should be helping you run an efficient, profitable organization. Through predictive analytics and your data, you can gain insights into your business, like:

• What is the most predictive rating variable?
• What policy/claim characteristics point to fraud?
• Which external data can help me better price my risks?
• On which claims should you place the most experienced claims managers?
• What variables outside the rating plan are predictive of underwriting results?
• What variables give insights to reduce litigation expense?

Let Perr&Knight’s Predictive Analytics team help you utilize your data to its fullest potential with our low-cost predictive analytics solutions using cutting edge technology and industry best practices.
Predictive Analytics: Data Science & More
Our data scientists work alongside our actuaries and other insurance experts to provide a tailored business solution. Perr&Knight is one of the top actuarial consulting firms in the United States with expertise spanning all lines of business and U.S. jurisdictions.  Our Predictive Analytics team provides clear solutions using your data along with our industry knowledge to help you stay competitive and profitable.
InsurTech
With new InsurTech products available to the insurance industry, knowing how to integrate these tools into your business takes a specialized skill. Perr&Knight has experience merging new variables with company data and analyzing for insights tailored to your book of business. We work with InsurTech innovators to review predictive models and support insurance applications with regulators.
Let Perr&Knight incorporate big data into your insurance products to help you stay relevant in the ever-changing insurance market. Contact us today to learn more.

Are your operations due for some Spring Cleaning? It’s never a bad time to make sure your insurance operations are in order and ready to face an internal audit or market conduct exam. A little Spring Cleaning, in the form of a compliance audit, can help a company avoid fines, cease and desist actions or even loss of license.

• Do you record and respond to complaints in the required timeframe?
• Are your producers properly licensed?
• Are schedule rating debits and credits sufficiently documented by your underwriters?
• Do the rates in your system match your filed rates?
• Are you utilizing approved forms?
• Are claim files reserved according to established procedures?

We Can Help

Let Perr&Knight’s consulting team help you identify and correct compliance risks. If you’re looking for a full-scale review, our team of regulatory compliance professionals and operational and technology consultants will assess your current operations through a combination of staff interviews and documentation review in each of the NAIC’s seven areas of operation: operations/management, complaint handling, marketing and sales, producer licensing, policyholder service, underwriting and rating, and claims. We’ll draft “as is” process maps that document your current processes and use them to identify compliance risks and process inefficiencies. Then, based on our extensive subjective matter expertise and knowledge of best practices, we’ll draft “to be” process maps with proposed solutions for closing gaps and streamlining processes in a compliant manner. In addition, we can support you as you implement changes to processes.
If you’re looking for a more targeted review to help remedy a risk or compliance gap that you’ve already identified, Perr&Knight can help. Our regulatory compliance consultants can perform a more limited analysis, such as a compliance audit of a single area of operation, a sample file review of claims and/or policies, a rate manual compliance review, a certificate of authority inventory, etc. We will customize our services to meet your needs.

Contact Us

Contact us online or give us a call today to discuss how Perr&Knight can help you!
+1.888.201.5123 ext. 3 // www.perrknight.com

Rob Berg, a principal and director of Perr&Knight’s Insurance Technology Group (ITG), recently lent his expertise to PropertyCasualty360.com by answering the question: “What steps need to be taken to develop a solid business case when business and IT leaders realize new systems are in order?”
Read Rob’s response here to learn which critical questions organizations must ask themselves in order to address the three components of a solid business case.

A NEW USER EXPERIENCE
The new RateFilings.com features a completely redesigned user interface, which emphasizes ease-of-use and improves the overall user experience. We will continue to make similar improvements and welcome feedback regarding your user experience.
NEW AND UPDATED APPS
New Competitor Filing apps include Quick View 100 and Hot Filings, both designed to simplify the process of tracking competitor filings. New Product Management apps, including Product Pro Desktop and Product Planner, aid in the product management process. Finally, RateWatch will be updated to deliver reports in html format, replacing pdf downloads.
PROFESSIONAL, ENTERPRISE & UNLIMITED EDITIONS
Beginning January 5, 2013, RateFilings.com will be available in Professional, Enterprise and Unlimited Editions. Existing Basic Access users will be subscribed to the Professional Edition, Premier Access users will be subscribed to the Enterprise Edition, and Premier Access Platinum users will be subscribed to the Unlimited Edition.
SUPPORT
An updated user manual will be available on the new Support page to help you navigate the new user interface, and for guidance using the various RateFilings.com apps and site features. You can also contact us directly from the Support page if you have any questions.
LEARN MORE
Please join us for a webinar to learn more about these changes. Two dates are available for your convenience:

The Supreme Court of the United States’ decision to uphold the Affordable Care Act will greatly affect the future of major medical health insurance in this country.  There is tremendous revenue opportunity for insurers in the supplemental health care market in the immediate and long-term future.  For firms considering taking advantage of this growing market, the time to act is now.
Whether you’re in the early stages of exploring the supplemental health care market, you’re interested in what your competition is doing, or you’re planning to update your accident and health (A&H) products to remain competitive, Perr&Knight can help.  We are uniquely qualified and perfectly suited to assist property & casualty (P&C) companies with their supplemental health endeavors.

• We’re a one-stop shop.  Perr&Knight is the only firm of its kind offering a complete array of actuarial consulting, forms development, competitive intelligence and state filings services in all states and for all supplemental health products.  We can provide assistance to companies throughout the entire product development cycle from competitor/market analysis and initial product pricing all the way to rate, rule and form filing support and product implementation.  We can be ‘plugged’ into any or all components of the product development process to fit your unique needs.

• Our consultants speak both P&C and A&H.  We understand and can address the unique challenges faced by P&C companies as they enter the supplemental health market, from a lack of in-house expertise to differing terminology to resource constraints.  In addition, because our staff includes both P&C and health consulting actuaries, product design consultants and state filings analysts, we are able to fully support hybrid products containing both P&C and A&H components such as Travel Insurance and Medical Excess Stop Loss.

• Our experience is wide-ranging, recent and relevant.  We have recently developed and launched several nationwide supplemental health products for our clients including Disability Income, Critical Illness, Major Medical Gap Coverage, Limited Medical Indemnity, Short Term Medical, Travel Accident, and AD&D.  As a result, we’re tuned into the current marketplace and regulatory climate.

For more information, please download the following brochure:
Accident and Health Product Development
Contact Kristy Greco for assistance with your supplemental health products, or any questions you might have.
PHONE: 352.222.0083
E-MAIL: kgreco@perrknight.com
WEB: PerrKnight.com