Statistical Plan Reporting Initiatives

Financial Institutions Revisions – ISO has received approval in certain jurisdictions for the fourth phase in its multistate Financial Institution Crime Policy, introducing Credit Unions (Non-aggregate Form and Aggregate Form) and separating Mortgage Bankers out from Finance Companies as an independent industry classification.  These modifications are effective no earlier than September 1, 2012. Once we have finalized details, we will issue a Statistical Plan Holders circular detailing revisions, which will include new coverage codes, form codes, and classification codes at a minimum.

Additionally, the Securities and Exchange Commission (SEC) has approved Rule 4360 (Fidelity Bonds), filed by the Financial Industry Regulatory Authority, Inc., (FINRA), which took effect on January 1, 2012.  In support of FINRA 4360, ISO has obtained all necessary approvals and acknowledgements for a multistate revision to Financial Institutions Policy rules.  We are in the process of reviewing these revisions and will be releasing a Statistical Plan Holders circular detailing these statistical reporting changes as well.

Commercial Property Multistate Revisions — ISO is in the process of filing a multistate revision to the Commercial Lines Manual Division Five - Fire and Allied Lines. The proposed effective date is April 1, 2013.  At a minimum, we will create additional classification codes. You can find ISO's forms, rules and loss cost information in circulars LI-CF-2012-001, LI-CF-2012-002, and LI-CF-2012-003, respectively, all dated January 3, 2012.  We will issue a Statistical Plan Holders circular detailing revisions once we have received approval of the filing  in at least one jurisdiction.

Commercial Property Basic Group II Specific Wind Rating — ISO has developed a Commercial Property enhanced wind rating program for Basic Group II risks. Detailed information on this wind-specific program can be found in circular LI-CF-2011-136 (10/21/2011), and filing has begun in 37 states/jurisdictions especially prone to wind exposure.  We will issue a Statistical Plan Holders circular detailing revisions to both the Commercial Statistical Plan (CSP) and the Commercial Statistical Plan-Intermediate (CSP-i) once we have received approval of the filing in at least one jurisdiction. We anticipate reporting enhancements to the Rating Identification field as a result.

Dwelling Property Deductible Rule Revised — ISO is in the process of filing multistate revisions to its Dwelling Property Deductible Insurance Rules. New Jersey is the first state to approve these revisions. Among other things, ISO has introduced flat dollar and percentage hurricane-only deductibles in certain wind-prone areas, mostly along the coastline. The dwelling property filing follows a similar filing ISO made in 2009 for its Homeowners Policy Program, which resulted in the establishment of state-specific statistical coding requirements. Statistical Plan Holders circular SP-DP-2012-002/SP-HO-2012-002 (4/26/2012) details the New Jersey revisions. Additional Statistical Plan Holders circulars will be released upon receipt of approval from additional affected states.

Personal Automobile Classification Plan Revisions — ISO has developed a refined rating system for personal automobile that revises various rating structures in the current Revised 202 Classification Plan. The revision includes, among other things, refinements to the current age group and the Safe Driver Insurance Plan (SDIP) regarding violation/accident surcharges. ISO plans to start filing in the second quarter of 2012. The proposed effective date is April 1, 2013. As a result, ISO will sunset the current class plan in conjunction with these revisions. We will issue a Statistical Plan Holders circular detailing revisions once we have received approval of the filing in at least one jurisdiction.

Stand-Alone Motorcycle Program — ISO is developing a stand-alone Motorcycle Policy Program and anticipates making filings in each state throughout 2012 on an incremental basis. The ISO draft Motorcycle Policy includes transport trailer, motorcycle custom equipment and rider safety apparel, coverage limited to your covered motorcycle, with nonowned coverage provided only to temporary substitute motorcycles, optional buy-back coverage with respect to business use of a motorcycle, and transportation expenses coverage not included in the base coverage form, provided as an option. We will issue a Statistical Plan Holders circular detailing revisions once we have received approval of the filing in at least one jurisdiction.

Commercial Automobile Multistate Rating Programs Implemented in Hawaii — Recently, based on a 2011 actuarial review, ISO verified that the Hawaii Insurance Bureau (HIB) has adopted ISO's Commercial Automobile Multistate Rating Programs. With the HIB's adoption, the statistical codes ISO established for jurisdictions that have adopted the Commercial Automobile Multistate Rating Programs will be retained for Hawaii business while ISO is eliminating all separate statistical coding detail established for non-adoption jurisdictions.  Details can be found in Statistical Plan Holders circular SP-CA-2012-002, dated March 13, 2012.

Commercial Automobile Dealers Coverage Program — ISO has begun filing a new Auto Dealers Coverage Form (ADCF), which will replace the current Garage Coverage Form (GCF). The tentative effective date is October 2013. The new form includes both Commercial Auto and General Liability coverages and introduces new Errors and Omissions (E&O) coverages, among other changes. Circulars LI-CA-2012-046 and LI-CA-2012-047 (3/29/2012) provide details on ISO form and rule changes. We are reviewing the statistical impact, including probable changes to Classification Codes and Coverage Codes, among other changes, and will release a Statistical Plan Holders circular with revisions once approved in at least one state.

Company Program Exceptions — We are reviewing the current reporting options for Company Program Exception (CPE) business — specifically the level of detail required to be reported.  It is probable that revisions will be forthcoming, specifically with the requisite level of CPE reporting to exceed current commercial lines Option 1 detail levels.  Once we have finalized particulars, we will release a Statistical Plan Holders circular detailing any revisions.

ZIP Code-Based Territories — In 2003, ISO began introducing rating territories based on ZIP codes in commercial automobile on a state-by-state basis. ZIP code-based territories replace the previous territory system based on counties and cities. Since the introduction of ZIP code-based territories, territory reporting requirements have changed in 43 approved states for commercial automobile. You can find the latest statistical information regarding Michigan in circular SP-CA-2012-001 (2/14/2012).  A filing is currently pending in Hawaii, and ISO will release a Statistical Plan Holders circular once approved.  Territory reporting requirements have changed in 35 approved states for personal automobile.  The latest details can be found in SP-PA-2008-003 (5/13/2008).

ISO has also implemented ZIP code-based territories for general liability in 27 approved jurisdictions and for businessowners in 39 jurisdictions. The most current information for these lines of business appears in circulars SP-GL-2010-001 (2/24/2010) and SP-BP-2008-006 (8/29/2008), respectively. There are no additional ZIP code-based territory filings pending at the moment.

Additionally, we have recently implemented ZIP code-based territories for Virginia Commercial Automobile Assigned Risk business, based on approval from the Virginia Bureau of Insurance to a revision of the Virginia Automobile Insurance Plan (VA AIP). Details can be found in circular SP-CA-2011-007 (11/30/2011).

Green Upgrade Coverage — ISO has previously implemented endorsements and related rules in various jurisdictions in support of green upgrades to building and property or green construction alternatives for commercial fire and allied lines (COMFAL), businessowners, capital assets, and equipment breakdown. For each of the affected lines of business, we released Statistical Plan Holders circulars SP-CF-2010-001 (4/16/2010), SP-BP-2010-001 (7/6/2010),  SP-AG-2010-001 (5/28/2010), and SP-EB-2011-001 (3/16/2011), to provide appropriate statistical reporting instructions for premium and loss data generated by Green Upgrade Coverages. Additional requirements were recently announced for businessowners in Statistical Plan Holders circular SP-BP-2012-002 (3/21/2012).

We are considering further revisions to the collection of green upgrades for capital assets and will release a Statistical Plan Holders circular detailing the revisions once we have finalized details.

Businessowners Revisions — We have made revisions to the businessowners data currently being collected, including enhancement of the details captured under the Simplified Businessowners Program to more closely resemble the 2002 Simplified Businessowners Program. Data elements affected include coverage code, classification code, liability exposure indicator, exposure, and liability limits, as well as a few others.

At the same time, we have introduced a new identifier code for lessor's risks to segregate the data from data for owner-occupant risks. The indicator will apply when reporting any Businessowners Classification Code or General Liability Classification Code on a businessowners record, as there is currently no distinction between lessor's risks and owner-occupant's risks for these classes. Statistical Plan Holders circular SP-BP-2011-002 (9/9/2011) details these revisions.