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Title 3 . Commerce, Community, and Economic Development
Chapter 27 . Miscellaneous
Section 320. Minimum ratemaking standards

3 AAC 27.320. Minimum ratemaking standards

(a) A title insurance company shall use at least five years of statistical and financial data to support a title insurance rate filing. All data must be shown separately for owner's policies and for loan policies for each year and for all years combined.

(b) Statistical data for title insurance rates must include the number of policies written, policy amounts, written premium, frequency of claims, salvage and subrogation, paid and reserved losses, and paid and reserved loss adjustment expenses. A title insurance company shall

(1) group statistical data by the size of the risk;

(2) include a title insurance limited producer's deductible as part of a loss; and

(3) state in a rate filing whether the data are compiled on a policy-year or a calendar-year basis.

(c) Financial data for title insurance rates must include the following:

(1) an income exhibit that lists premiums written, including title insurance limited producers' commissions, and any non-operating returns, such as investment income and realized capital gains;

(2) an expense exhibit that lists losses and loss adjustment expenses incurred, commissions, and other operating expenses by category; if any expense component of the exhibit differs from the five-year average required in (a) of this section, the title insurance company shall provide an explanation of the selected expense amount;

(3) an exhibit that shows the allocation of commission to expenses incurred by title insurance limited producers; the expense categories for title insurance limited producers must include the producers' share of losses paid and reserved, and other operating expenses;

(4) detailed attachments for the items required in (1) - (3) of this subsection that show how the individual components have been developed; this supporting information must be the actual income and expenses of the title insurance company for this state to the extent that data is available; if the title insurance company's record-keeping system does not allocate actual income and expense amounts to this state, the title insurance company shall explain its method of allocation of nationwide results to individual states.

(d) Statistical and financial data used to support title insurance rates may not include data related to escrow income or expenses. The title insurance company shall include a detailed explanation showing how the expenses are allocated between the title operations and escrow operations of the producer or insurer.

(e) If trending for frequency or severity of losses is used to develop title insurance rates, the title insurance company shall include in the filing exhibits that demonstrate how the trend factors were developed.

History: Eff. 4/15/2000, Register 154

Authority: AS 21.06.090

AS 21.66.370

AS 21.66.380

AS 21.66.390

AS 21.66.410


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Last modified 7/05/2006