806 KAR 46:050. Liability self-insurance group rate, underwriting
and evidence of coverage filings.
RELATES TO: KRS 304.1-050, 304.13-011,
304.13-051, 304.14-120, 304.48-020(7), 304.48-180
STATUTORY AUTHORITY: KRS 304.48-180,
304.48-230
NECESSITY, FUNCTION, AND CONFORMITY: KRS
304.48-230 authorizes the commissioner to promulgate reasonable administrative
regulations not inconsistent with KRS 304 Subtitle 48 that the commissioner
deems necessary for the proper administration of the subtitle. KRS 304.48-180
authorizes the commissioner to promulgate administrative regulations to
establish requirements for liability self-insurance groups to follow when
filing rates, underwriting guidelines, evidence of coverage, and any changes. This
administrative regulation establishes the procedures for liability
self-insurance groups to submit these filings.
Section 1. Definitions. (1) "Commissioner"
is defined by KRS 304.1-050(1).
(2) "Liability self-insurance group"
is defined by KRS 304.48-020(7).
(3) "Rates and underwriting
guidelines" means any rating manuals and underwriting rules for all
coverage types including any manual or plan of rates, loss costs, risk
classifications, rating schedule, minimum premium, policy fees, premium payment
plans, rating rules, supplementary rating information or any other similar information
needed to determine the applicable coverage rate or premium for a member.
(4) "Supplementary rating
information" is defined by KRS 304.13-011(2).
Section 2. General Filing Requirements. (1)
All filings shall be accompanied by a completed and signed Form LSIG F-1A
P&C, Face Sheet and Verification Form for Liability Self-Insurance Groups.
(2) All paper filings shall include one
(1) full document set on 8 1/2 in. x 11 in. white paper with two (2) cover
letters and a self-addressed stamped envelope.
(3) A filing may include any number of
documents, filed together on a particular date. Rates and underwriting
guidelines shall be filed separately from evidence of coverage forms.
(4)(a) A liability self-insurance group
may submit a filing in an electronic format established by the National
Association of Insurance Commissioners.
(b) An electronic filing shall be in lieu
of a paper filing.
(5) The period of time in which the
commissioner may affirmatively approve or disapprove the filing, as set forth
in KRS 304.13-051, shall not begin until a complete filing and the filing fee
in accordance with KRS 304.48-180, is received.
Section 3. Rate and Rule Filings. (1) The
rates and underwriting guidelines shall be filed not later than fifteen (15)
days after the date of first use of the rates and underwriting guidelines,
pursuant to KRS 304.13-051(1).
(2) A liability self-insurance group
shall comply with the requirements of KRS 304.13-051(5).
(3) Form LSIG: S-1 P & C, Filing Synopsis
for Rates and or Rules, shall be filed with all rate and underwriting guideline
filings. Separate forms shall be filed for each type of coverage.
(4)(a) Form LSIG: LC-1 P & C, Calculation
of Loss Cost Multiplier, shall be filed with all rate filings referencing loss
costs formulated by any advisory organization. Separate forms shall be filed
for each type of coverage.
(b) Form LSIG LC-2 P & C, Expense
Constant Supplement, shall be filed with all rate filings referencing loss
costs formulated by an advisory organization in which an expense constant is
used. Separate forms shall be filed for each type of coverage.
(5)(a) All rate or underwriting guideline
filings utilizing an experience modification plan shall include the experience
rating plan by type of coverage with the formula used for calculating the experience
modification factor for that coverage. Each experience modification factor
applied shall be made available to the member upon request.
(b) All rate or underwriting guideline
filings containing schedule rating plans shall identify the characteristics of
the risk not reflected in an experience modification factor.
(c) Any application of the schedule
rating plan shall be based on evidence contained in the liability self-insurance
group’s file when it is applied. The schedule rating plan debit or credit
factor applied shall be made available to the member upon request.
(d) If the reason for application of any
schedule debit is corrected by the member to the satisfaction of the liability
self-insurance group, the debit may be removed when evidence of the correction
is received by the group.
Section 4. Coverage Form Filings. (1) Form
LSIG: S-2 P & C, Filing Synopsis for Forms, and Form LSIG: F-2 P & C, Forms
Index, shall be filed with all evidence of coverage form filings.
(2) An evidence of coverage form shall
not be used until it has been approved by the commissioner. If the rates
pertaining to an evidence of coverage form are required to be filed with or
approved by the commissioner pursuant to KRS 304.13-051, the coverage form
shall not be used until the appropriate rates have been filed or approved as
required.
(3) A filing which amends, replaces, or
supplements an evidence of coverage form previously filed and approved shall include
an explanation setting forth all changes contained in the newly filed coverage
form, the effect, if any, the changes have upon the hazards purported to be
assumed by the policy, and an explanation as to the effect on the rates applicable
thereto.
(4) A change of signature of the
executing officer on an evidence of coverage form shall not, because of this
change alone, require a new filing.
Section 5. Advisory Organization Filings.
(1) A liability self-insurance group that is a member, subscriber, or service
purchaser of an advisory organization, statistical agent or forms provider may
adopt coverage forms, rating plans, rating rules, rating schedules, other
supplementary rating information, underwriting rules or guidelines, or statistical
plans of that advisory organization or statistical agent by doing so in
accordance with the procedures established in this administrative regulation
and shall clearly identify each filing of the advisory organization or
statistical agent it is adopting.
(2) If a liability self-insurance group
chooses to adopt only a specific filing of an advisory organization,
statistical agent, or form provider it shall do so in accordance with the
procedures established in this administrative regulation, and shall clearly
identify which filing of the advisory organization or statistical agent it is
adopting. Loss cost filings shall be specifically adopted.
(3)(a) If a liability self-insurance
group chooses to adopt all of the current and future evidence of coverage
forms, rating plans, rating rules, rating schedules, other supplementary rating
information, underwriting rules or guidelines and statistical plans, excluding
loss costs, of an advisory organization, statistical agent, or forms provider,
it may file written notice with the commissioner that it is adopting by blanket
reference all of the current and future coverage forms, rating plans, rating
rules, rating schedules, other supplementary rating information, underwriting
rules or guidelines and statistical plans, excluding loss costs, as filed by
the advisory organization, statistical agent, or forms provider. Loss cost
filings shall not be adopted on this blanket reference basis.
(b) If a liability self-insurance group previously
notified the commissioner of its adoption of all current and future filings,
excluding loss cost filings, by the advisory organization, statistical agent,
or forms provider and chooses to not adopt certain evidence of coverage forms, rating
plans, rating rules, rating schedules, other supplementary rating information,
underwriting rules or guidelines, or statistical plans, the group shall file notice
of the nonadoption with the commissioner and shall pay the appropriate filing
fee in accordance with KRS 304.48-180.
1. If a liability self-insurance group
previously notified the commissioner of its adoption of all current and future
filings, excluding loss cost filings, by the advisory organization, statistical
agent, or forms provider and chooses to delay the effective date of its adoption,
it shall submit a letter to the commissioner requesting the revised date upon
which it will adopt the filing.
2. The delayed adoption date shall be
within six (6) months of the original effective date.
3. If additional time is needed, a second
letter shall be submitted to the commissioner, requesting a revised delayed
adoption date.
4. All revised delayed adoption dates
shall be within one (1) year of the original effective date as filed by the
advisory organization, statistical agent or forms provider.
5. If a liability self-insurance group
fails to adopt the advisory organization, statistical agent, or forms provider
filing within one (1) year of the original effective date as filed by the
advisory organization, statistical agent or forms provider, the insurer shall
submit a filing to the commissioner indicating it is nonadopting.
Section 6. Incorporation by Reference. (1)
The following material is incorporated by reference:
(a) Form LSIG: F-1A P & C, "Face
Sheet and Verification Form for Liability Self Insurance Groups", 7/2010;
(b) Form LSIG: F-2 P & C, "Forms
Index", 7/2010;
(c) Form LSIG: S-1 P & C,
"Filing Synopsis for Rates and or Rules", 7/2010;
(d) Form LSIG: S-2 P & C,
"Filing Synopsis Form", 7/2010;
(e) Form LSIG: LC-1 P & C, "Calculation
of Loss Cost Multiplier", 7/2010;
(f) Form LSIG: LC-2 P & C,
"Expense Constant Supplement", 7/2010; and
(g) Form LSIG: EMA P & C, "E-mod
Affidavit", 7/2010.
(2) This material may be inspected,
copied, or obtained, subject to applicable copyright law, from the Department
of Insurance, 215 West Main Street, Frankfort, Kentucky 40601, Monday through
Friday, 8 a.m. to 4:30 p.m. Forms may also be obtained on the Department of
Insurance Internet Web site, http://insurance.ky.gov. (37 Ky.R. 976;
eff. 11-05-2010.)