Premium Changes Due to Emergency Rule
- Issuer
- Congressional materials
- Document type
- 2021 09 21 A29208 D236180 Oic Premium Changes Due To Emergency Rule Ppt
- Date
- 2021-09-21
- Case
- 2021 09 21 A29208 D236180 Oic Premium Changes Due To Emergency Rule Ppt
Summary
A slide presentation titled Premium Changes Due to Emergency Rule, dated September 21, 2021, from the OIC. It explains what an insurance rate is and lists common rating factors, then describes how the Emergency Rule neutralizes the use of credit history on homeowner's, renter's and personal auto insurance rates for three years after the conclusion of the public health emergency. The slides state that OIC reviewed and approved all 177 filings and that all 128 companies using credit history filed emergency rule rate filings. Charts show expected premium changes by credit-based insurance score group for Company A and premium change distributions for Company B and Company C. A final slide reports that regular rulemaking, OIC# R2021-07, is underway, with the CR 101 filed on June 22, 2021.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Cite this document
“Premium Changes Due to Emergency Rule.”
Original at app.leg.wa.gov, dated 2021-09-21. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2021-09-21-2021-09-21-a29208-d236180-oic-premium-changes-due-to-emergency-rule-ppt/
, SHA-256 cad5c9aa2f4583ca17ec66e7d637210d9ba16e83a9473b96be8962cc17c99092.Full text
Premium Changes Due to Emergency Rule
September 21, 2021
What is an insurance rate?
Insurance rate is a unit of cost that is multiplied by an exposure base, often using
multivariate statistical models, to determine an insurance premium.
Some common rating factors include:
Credit History Age Gender Marital Status Moving Violations
Education level
Claims History Occupation Prior BI limits Multi-Car
achieved
Accident Any Lapse of
Multi-Policy Paid in Full Paid in Installments
Prevention Course Coverage
Length of Tenure Length of Residency
Paperless option Number of Vehicles Annual Mileage
with Insurer at same location
Marketing Amount of
Rideshare Use Business Use Agent Service Level
Association Coverage
Home/Mobile Preferred,
Location Home Ownership Good Student Distant Student Standard, or non-
Standard Insurer
Premium Changes September 21, 2021 2
How does the Emergency Rule work?
The Emergency Rule neutralizes the use of credit history on homeowner’s, renter’s and
personal auto insurance rates for three years after the conclusion of the public health
emergency.
By requesting a neutral rating factor in place of credit score, the rule provides a premium
neutral situation. For every dollar increased for some, it is equally decreased for others.
By keeping the neutral factor filings simple, OIC was able to review and approve all 177
filings quickly.
All 128 companies that used credit history and have policies in-force provided an
emergency rule rate filing.
As soon as companies got their Emergency Rule rate filing approved, they could file an
updated rate filing to be reviewed and approved by the Commissioner to optimize their
pricing without the availability of credit history.
Premium Changes September 21, 2021 3
The expected percent change in homeowners’ premium rates for Company A by
insurance score group in response to the emergency rule.
30.0%
20.0%
20.3%
14.4% 14.7%
10.0%
9.4% 9.3%
0.0% 0.3% 4.3% 4.6%
0.0%
-3.9%
-7.5%
-10.9%
-10.0%
-14.3%
-17.2%
-20.1%
-20.0%
-25.0%
-29.5%
-30.0%
-35.2%
-40.0%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
Credit-Based Insurance Score Group (from low to high score)
Each credit-based insurance score (CBIS) group designated by a single number in the above graph represents a
range of CBIS. The numbers above are in order of lowest to highest CBIS ranges.
Premium Changes September 21, 2021 4
The expected percent change in renters’ premium rates for Company A by insurance
score group in response to the emergency rule.
16.8%
11.5%
1.5% 6.4%
-7.5% -3.1%
-12.1%
-15.8%
-19.6%
-23.2%
-26.8%
-30.1%
-36.5% -36.5%
-39.4%
-42.2%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Credit-Based Insurance Score Group (from low to high score)
Each credit-based insurance score (CBIS) group designated by a single number in the above graph represents a
range of CBIS. The numbers above are in order of lowest to highest CBIS ranges.
Premium Changes September 21, 2021 5
For Company B, 45% of policies will have a $0 to $100 change in premium because of the
emergency rule. 36% of impacted policies will have a decrease in premium.
45%
21%
15%
3% 7%
2% 2%
1% 1%
4% 0% 0%
Less than - -$500 to - -$400 to - -$300 to - -$200 to - -$100 to $0 $0 to $100 $100 to $200 to $300 to $400 to Greater
$500 $400 $300 $200 $100 $200 $300 $400 $500 than $500
Premium Changes September 21, 2021 6
Company C
The average savings for those seeing more than a 20% decrease (-$332) in their premium is
significantly more than the additional charge for those seeing more than a 20% increase ($184).
25%
23.1%
20%
18.7%
15%
12.2%
10%
10.1%
6.7% 7.3% 7.1%
5% 6.6%
4.7%
3.7%
0%
Less than -20% to - -15% to - -10% to - -5% to 5% to 10% to 15% to Greater
0% to 5%
-20% 15% 10% 5% 0% 10% 15% 20% than 20%
Percentage of Policies 6.6% 3.7% 6.7% 10.1% 12.2% 23.1% 18.7% 7.3% 4.7% 7.1%
Average Premium Change -$332.00 -$209.00 -$130.00 -$80.00 -$20.00 $31.00 $71.00 $114.00 $146.00 $184.00
Premium Changes September 21, 2021 7
Emergency Rule recap
• The Emergency Rule neutralizes the use of credit history on homeowner’s,
renter’s and personal auto insurance rates for three years after the
conclusion of the public health emergency.
• There are numerous rate factors that impact one’s insurance premium.
• The rule provides a premium neutral situation. For every dollar increased
for some relating to credit history, it is equally decreased for others.
• As soon as companies got their Emergency Rule rate filing approved, they
could file an updated rate filing to optimize their pricing without the
availability of credit history.
Premium Changes September 21, 2021 8
What about regular rulemaking?
Regular rulemaking is underway (OIC# R2021-07) with multiple comment periods open
and iterations of the rule language circulated to stakeholders.
The CR 101, the public notice of rulemaking, was filed on June 22, 2021
The first stakeholder draft was circulated on July 16th with a comment period open until
August 6th.
The rule team then reviewed comments, deliberated, and circulated a second
stakeholder draft on September 7th, with a comment period open until September 17th.
The rule team is currently reviewing comments received and working on the regular rule
language.
Premium Changes September 21, 2021 9
Premium Changes Due to Emergency Rule
September 21, 2021
File and source
- File
- 2021-09-21_a29208_d236180_oic-premium-changes-due-to-emergency-rule-ppt.pdf
- Size
- 574,014 bytes
- SHA-256
- cad5c9aa2f4583ca17ec66e7d637210d9ba16e83a9473b96be8962cc17c99092
- Original
- app.leg.wa.gov