Does the DOI care if territorial group rates are the same?

Professional Actuarial Topics Property/Casualty
1

Suppose a new rating plan has a territorial rating factor, and two territorial groups share the same rating factor. Does it matter to the DOI that they have the same factor?

2

  1. Depends on the filing rules of the state.

  2. If approval required:
    Do they care that you have a new factor? Most likely yes.

Do they care that they are the same? Depends. If it’s a new factor and they’re the same, why have a new factor? Is it a placeholder (they might approve it if you’re going to differentiate down the road)?

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5

Yes, the plan is to differentiate down the road (or at least analyze the groups separately), but since it’s a new rating plan we think it might be better to keep the factors the same. (to clarify, it’s also a new product, so it’d be the first filing). (sorry for the multiple posts/deletions, first time using the site)

6

I don’t see an issue then. Most DOIs are pretty reasonable. They’ll need to approve it when you eventually file for differentiated rates down the road anyway. It’s a conversation to have with them.

Also, if it’s a new product, that’s even easier. Most DOIs are pretty lenient with new business rate/rule.

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7

Why should a DOI care if two territories have the same factor?