Product Filing Review Handbook - naic.org

1 Product Filing Review Handbook $XJXVW 201 . The naic is the authoritative source for insurance industry information. Our expert solutions support the efforts of regulators, insurers and researchers by providing detailed and comprehensive insurance information. The naic offers a wide range of publications in the following categories: Accounting & Reporting Special Studies Information about statutory accounting principles and the Studies, reports, handbooks and regulatory research procedures necessary for Filing financial annual statements conducted by naic members on a variety of insurance - and conducting risk-based capital calculations. related topics. Consumer Information Statistical Reports Important answers to common questions about auto, Valuable and in-demand insurance industry-wide statistical home, health and life insurance as well as buyer's data for various lines of business, including auto, home, guides on annuities, long-term care insurance and health and life insurance .

2 Medicare supplement plans. Supplementary Products Financial Regulation Guidance manuals, handbooks, surveys and research Useful handbooks, compliance guides and reports on on a wide variety of issues. financial analysis, company licensing, state audit requirements and receiverships. Capital Markets & Investment Analysis Information regarding portfolio values and procedures for Legal complying with naic reporting requirements. Comprehensive collection of naic model laws, regulations and guidelines; state laws on insurance topics; and other White Papers regulatory guidance on antifraud and consumer privacy. Relevant studies, guidance and naic policy positions on a variety of insurance topics. Market Regulation Regulatory and industry guidance on market-related issues, including antifraud, Product Filing requirements, For more information about naic .

3 Producer licensing and market analysis. publications, view our online catalog at: naic Activities naic member directories, in-depth reporting of state regulatory activities and official historical records of naic national meetings and other activities. 2012, 2016 National Association of insurance Commissioners. All rights reserved. ISBN: 978-1-59917-923-0. Printed in the United States of America No part of this book may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or any storage or retrieval system, without written permission from the naic . naic Executive Office naic Central Office naic Capital Markets 444 North Capitol Street, NW 1100 Walnut Street & Investment Analysis Office Suite 700 Suite 1500 One New York Plaza, Suite 4210.

4 Washington, DC 20001 Kansas City, MO 64106 New York, NY 10004. Product Filing Review Handbook . TABLE OF CONTENTS. INTRODUCTION .. 1. Overview .. 1. Using the Handbook .. 1. Handbook Revisions .. 1. CHAPTER ONE: A Brief History of Rate and Form Regulation .. 2. Early World History .. 2. Early History .. 2. Paul v. Virginia .. 3. Antitrust Laws .. 3. Munn v. 3. Life insurance .. 4. The Armstrong and Merritt Committee Investigations .. 4. Development of Rating 4. The Lockwood Committee Investigation .. 4. United States of America v. South-Eastern Underwriters Association .. 5. McCarran-Ferguson Act .. 5. The All-Industry Bill .. 5. insurance 5. Consumer 6. Prospective Loss 6. Notable State Uniformity Efforts in Recent Years .. 6. Today .. 7. CHAPTER TWO: The Filing Process.

5 8. The Filing .. 8. The Filer .. 9. The Reviewer .. 10. CHAPTER THREE: The Basics of Property and Casualty Rate Regulation .. 11. Introduction .. 11. Rating Laws .. 11. Rate Standards .. 12. 2012, 2016 National Association of insurance Commissioners Rate Justification and Supporting Data .. 12. Number of Years of Historical Data .. 16. Segregation of Data .. 16. Data Adjustments .. 16. Premium Adjustments .. 16. Losses and LAE (perhaps just DCC) Adjustments .. 19. Catastrophe or Large Loss Provisions .. 23. Loss Adjustment Expenses .. 23. Data Quality .. 23. Rate Justification: Overall Rate Level .. 24. Contingency Provision .. 25. 25. Calculation of Overall Rate Level Need: Methods .. 26. Rate Justification: Rating Factors .. 27. Calculation of Deductible Rating 29.

6 Calculation of Increased Limit 30. Credibility for Rating Factors .. 30. Interaction between Rating Variables (Multivariate Analysis) .. 30. Approval of Classification Systems .. 30. Rating Tiers .. 30. Rate Justification: New Products .. 31. Predictive Modeling .. 32. Advisory Organizations .. 32. Workers' Compensation Special Rules .. 34. Premium Selection Decisions .. 34. Installment Plans .. 35. Policy Fees .. 35. Potential Questions to Ask Oneself as a Regulator .. 35. Questions to Ask a Company .. 36. Additional Ratemaking Information .. 36. Other 36. Summary .. 37. Chapter Three Glossary .. 37. 2012, 2016 National Association of insurance Commissioners CHAPTER FOUR: The Basics of Life and Annuity Regulation .. 39. Introduction .. 39. Laws and 39.

7 State Regulation of Life insurance and Annuities .. 39. Interstate insurance Product Regulation Commission (IIPRC) .. 40. Cash Surrender Values and Paid-up Nonforfeiture Benefits .. 40. Credit Life and Disability 40. CHAPTER FIVE: The Basics of Health Rate 41. Introduction .. 41. Rating Laws and Guidance Manuals .. 41. Types of Health insurance .. 41. Rate Standards and Justification .. 43. Disability Income insurance .. 45. Medicare Supplement insurance .. 45. Small Group insurance .. 45. Long-Term Care insurance .. 45. CHAPTER SIX: The Federal Affordable Care Act (ACA) and Plan Management .. 47. Introduction and Key Term Definitions .. 47. History .. 48. Categories of Regulatory Health insurance Coverage Plans .. 49. Resources .. 51. Marketplace Types and Responsibilities.

8 55. Marketplace Requirements .. 58. Review Standards .. 60. Forms, Rates and Plan Reviews Under the ACA .. 61. CHAPTER SEVEN: Policy Form Filings .. 65. Public Policy and Policy Form Review .. 65. Standards for Policy Forms Review .. 65. Speed to Market Imperatives .. 66. Speed to Market in a Prior-Approval Environments .. 67. Speed to Market in Non-Prior-Approval Environments .. 69. The 70. Process 70. 2012, 2016 National Association of insurance Commissioners CHAPTER EIGHT: Speed to Market Tools .. 71. An Overview of Speed to Market .. 71. The Speed to Market Tools .. 73. Uniform Review Standards Checklists .. 73. Product Requirements Locator .. 74. Uniform Transmittal Documents .. 74. Uniform Product Coding Matrices .. 74. The Interstate insurance Product Regulation Commission (IIPRC).

9 75. SERFF .. 75. SERFF Features and Functionality .. 76. Future Expectations .. 84. CHAPTER NINE: Regulatory Data Resources .. 85. Financial 85. Disadvantages of Using Financial Data for Market Analysis .. 87. Statistical Data .. 87. Statistical Data Resources .. 88. Standard Summary Reports .. 88. Conclusion .. 90. 2012, 2016 National Association of insurance Commissioners INTRODUCTION. Overview The Product Filing Review Handbook is intended to help insurance regulators provide speed to market for insurers while maintaining a high level of consumer protection by enforcement of state laws and regulations related to the sale of insurance products. One of the reasons that insurers complain about lack of timely Review of their filings is that states, in the past, have used a wide variety of regulatory processes that might not be transparent to insurers.

10 To address this concern, the Handbook is intended to add uniformity and consistency of regulatory processes, while maintaining the benefits of the application of unique laws and regulations that address the state-specific needs of the nation's insurance consumers. Regulators have identified a need to have available for easy reference one source that compiles the latest naic speed-to- market Filing tools along with instructions on their use and other related relevant information. The Handbook has been created to be that source. In addition, the Handbook will serve as a training tool for new Product Filing reviewers. The Handbook provides basic information about the Filing and Review of rate, rule and form filings for all lines of insurance . It also explains basic ratemaking processes for those products that are subject to various forms of rate regulation.