Issued and entered February 22, 1995 by Patrick M. McQueen,
Acting Commissioner of Insurance
On June 30, 1994, Bulletin 94-5 was issued with the expressed
purpose of streamlining the process insurers use when submitting
commercial property and liability rate filings. That bulletin
contained a change in the area of loss cost documents and related
filings. Since that time, questions have arisen regarding the
lines to which this change applies and how filings are to be
made under this new process. This bulletin is intended to provide
Under current filing procedures, whenever a rating or advisory
organization files a new loss cost document with the Bureau,
all companies adopting that document must make a filing to that
effect, together with the multiplier they will be using. Effective
immediately, after a company's initial loss cost filing, filings
will only be required if an insurer chooses not to adopt the
new loss cost document or chooses not to accept the advisory
organization's effective date. Further any multiplier on file
will remain on file, and will apply to any new loss cost document
until the insurer files a different multiplier.
Filings are required by all companies who do not wish to adopt
a filing on the rating or advisory organization's effective
date. A time deviation filing consisting of a filing transmittal
letter and forms INS 700 and INS 782 submitted in duplicate
will allow a temporary delay in adoption for a period of six
months. Longer requests will be considered on a case-by-case
basis if the company documents the need for further delay. Chapter
9 of the Property and Liability Insurance Filing Procedures
Manual has instructions for filing a time deviation. A separate
time deviation filing must be made for each line of insurance
or if there are different effective dates or company implementation
dates on different advisory organization filings.
Companies that have not filed to adopt a loss costs rating
approach (still using pre-loss costs manual until January 1,
1996) do not have to file a time deviation to a loss costs reference
Companies which are members of rating or advisory organizations
have until January 1, 1996 to adopt loss costs. Therefore, any
member company that has never adopted loss costs should be using
the rules and rates last filed on their behalf prior to the
organization's first loss costs filing.
Companies which have already adopted the loss costs format
but do not wish to adopt the most recent Loss Costs Reference
Document must file the printed manual pages they intend to use,
including the old loss costs pages. The non-adoption filing
must include submission forms INS 700 and INS 705 along with
the manual pages being used.
LOSS COST CONVERSIONS
Michigan has established January 1, 1996 as the transition
date for all companies to adopt loss costs or file the complete
rating manual being used in lieu of the rating or advisory organization
loss costs rating manual filed on behalf of the company. Because
of complete ISO manual revisions in Commercial Inland Marine
and Crime, as of September 1, 1992, member companies are required
to either adopt loss costs or file a complete rating manual
for these two lines.
Companies making an initial loss costs filing must file submission
forms INS 700, INS 705 and INS 789 with a manual page containing
rules for minimum written premiums and return premium. Please
refer to Chapter 14 of the Property and Liability Insurance
Filing Procedures Manual for further information.
This bulletin applies to all lines for which loss costs are
filed. It does not supersede Bulletin 94-5 but is meant to be
read in conjunction with it. Advisory organization members/subscribers
who write private passenger auto, homeowners, or workers' compensation
insurance in Michigan are advised that complete rate pages for
those lines must still be filed with the Bureau. Further, any
deviation from rules filed on behalf of members/subscribers
must be filed on manual pages. Please remember that the National
Council on Compensation Insurance (NCCI) and the Compensation
Advisory Organization of Michigan (CAOM) do not file rates,
rules or forms on an insurer's behalf. Each insurer is responsible
for filing the manual roles, rates and forms that it will utilize.
THIS BULLETIN IS INCORPORATED AS A PART OF THE FILING INSTRUCTIONS
CONTAINED IN THE PROPERTY AND LIABILITY INSURANCE FILING PROCEDURES
MANUAL AND SHOULD BE KEPT WITH THAT MANUAL.
Any questions regarding this bulletin should be addressed
to the Commercial Market Standards Division, Michigan Insurance
Bureau, P.O. Box 30220, Lansing, MI 48909, (517) 373-0242.
The Commissioner retains the authority to issue such further
orders or bulletins as he shall deem necessary and appropriate.