On November 17th, the CAR Governing Committee met which also marked the first appearance of CAR’s newly appointed President, Daniel Judson as well as two new Governing Committee members, Carol Berthold of GEICO and John Tierney of Quincy Mutual.
In his first announcement President Judson advised the Governing Committee that there were no operational issues impeding the approval of the LAD agreement between Pilgrim and Allstate Insurance Companies. CAR’s outside legal counsel stated there were no legal impediments as well. As a result, the agreement was approved with one recusal.
- Approval of amendments tot he Rules of Operation relating to Limited Assignment Distribution Agreements,quota share credits for policies effective April 1, 2012 and subsequent clean-in-three provisions.
- Rule 36 – Limited Assignment Distribution Agreements was modified to provide clarity relative to the volume limitation under a LAD agreement and to eliminate references originating from the Uniform Assigned Risk Plan that are not applicable to MAIP.
- Rule 21 – General Provisions was modified establishing parameters for the gradual sunset of the clean-in-three non-renewal constraints, with the elimination of the restriction on non-renewal for policies effective April 1, 2014 and subsequent. However, no later than December 1, 2013, CAR shall confirm that the end date should be ratified based on a review of then current data.
- Rule 29 – Assignment Process Section B.1. was modified to reflect the availability of the voluntary market exclusion in conjunction with the amendments made to Rule 21.
- Section E.3. was modified to provide that Members will receive take-out credit for risks previously assigned through the MAIP if the policy is written voluntarily at the expiration of either the initial policy term or its first renewal.
- Section E.2. was modified to reflect the voluntary credit offer for policies effective April 1, 2012 and subsequent. The credit offer is developed based upon the recommendations of the Actuarial Committee to provide credits where the residual market share is greater than 7.5%, but which gradually reduces available credit premium by limiting changes to 50% of the indicated change.
In addition, CAR reports that the following recommendations that the Operations Committee presented at the meeting were unanimously approvided by the Governing Committee:
- Proposed changes to the Private Passenger and Commercial Statistical Plans.
- The final close out of policy effective year 2000 for financial purposes to occur as of the third Quarter in 2011 and for data reporting purposes as of the January 2012 submission.
- The elimination of AL3 format for FTP MAIP assignments take place in six months.
- Reporting enhancements to the MAIP Placement Record.
Lastly, CAR says that amendments to proposed modifications of Rule 29.D.1 and D.2 pursuant to the MAIP Steering Committee’s recommendations also were unanimously approved.