News & Notes

INSIGHTS ON PCRB WORKERS’ COMP DATA, FILING

IA&B staff in December attended an annual meeting with the Pennsylvania Compensation Rating Bureau (PCRB), during which the PCRB provided an overview of the data used to support its loss cost filings submitted to the Insurance Department. The PCRB filed an overall average change of -7.88% effective on April 1, 2024.

The data analyzed boils down to the interaction between frequency and severity of claims and the resulting trends that emerge. As in prior years, the increases in severity are more than offset by a continuing decline in frequency. Of note:

▲ Most of the year’s change is driven by the fact that the year 2018 is now dropping from the sliding 3-year period analyzed. 2018 was particularly heavy in large losses.

▲ While the data used is from policy years 2019 to 2021, approximately 1,400 COVID-19 claims totaling $14M were altogether excluded from the calculations to avoid skewing trends with one-time disruptions. Longer-term disruptions caused by the pandemic (such as the increase in hybrid/remote work) are expected but should be naturally embedded and reflected in future rates. The changes will become effective on April 1, 2024.

▲ The employer assessment is slightly reduced.

ACORD 95 MD REVISED

The ACORD 95 Enhanced Underinsured Motorist (EUIM) form has been revised to account for Maryland House Bill 128, adopted in 2023.

▲ The new law makes EUIM an opt-out coverage for new auto policies. EUIM coverage remains an opt-in for policy renewals.

▲ Companies using their own forms will need to submit their filings by March 1, 2024.

▲ Agencies will need to adjust their processes and signature forms for new business issued on or after July 1, 2024.

During the 2023 legislative session, IA&B, alongside the Maryland Insurance Administration, lobbied against the passage of HB 128. We did not fully defeat the measure, but we did secure two amendments that limit its scope:

▲ Its applicability to new business only: Policy renewals are unaffected.

▲ Its limited shelf life: The requirement will sunset on June 30, 2029, at which point, barring new legislation, EUIM will revert to being an opt-in coverage.

ACORD’s write-up on the revised form:

ACORD 95 MD (2024/07) MARYLAND MANDATORY OFFER OF ENHANCED UNDERINSURED MOTORIST (“EUIM”) COVERAGE AND OPTION SELECTION FORM

This is a revised form based on new legislation that essentially changes EUIM coverage. EUIM coverage will be subject to an opt out as opposed to an opt in. The form that has been released is a Department form. ACORD has filed this form and received approval. While this is not a new form, we recommend that because of the number of changes, this form should be treated like a new form. This form should be used with each new policy of private passenger motor vehicle insurance issued sold or delivered in Maryland on or after July 1st 2024.

(A “redline” is available and can be provided to a member on request.)

PA, DE FAIR PLAN GROWING IN HARD MARKET

The home insurance markets of last resort in Pennsylvania and Delaware are seeing the effect of the hard market. Between September 2022 and September 2023, the Plans saw an increase of 50% in Pennsylvania and 80% in Delaware.

For those agents/policyholders who have nowhere to go and cannot find a reasonable alternative, remember that you can use the FAIR Plan as a last option. No certification is required for licensed agents, but it is important to keep in mind that certain eligibility requirements still apply and that liability coverage is not included in the policy.

The commission rate is 10% for both new and renewal business.

As reminders, products include:

DWELLING FIRE

▲ Dwelling Property Basic Policy DP0001FPPA (modeled after ISO Basic Form)

▲ Dwelling Property Broad Policy DP0002FPPA (modeled after ISO Broad Form)

▲ Extended Coverage and Vandalism & Malicious Mischief Coverage may be added

▲ Residential Crime Insurance Endorsement

COMMERCIAL FIRE

▲ Standard Property Policy CP-0099

For more information, contact the FAIR Plan at 215-6298800, or visit pafairplan.com or defairplan.com.

BIG “I” LEGISLATIVE CONFERENCE

IA&B members in Pennsylvania and Delaware: Save the date to join IA&B for the Big “I” Legislative Conference coming to Washington, D.C. on April 10-12. The annual event brings together approximately 1,000 independent agents from across the country to talk with lawmakers about issues important to them and their clients.

IA&B pays for member agents’ registration fee and hotel room. Watch Agent Headlines e-newsletter for sign-up information in the weeks ahead.

Questions? Contact IA&B Government Affairs Director John Savant at JohnS@IABforME.com or 717-918-9214.

RECORDED WEBINAR: PA EXPERIENCE RATING METHODOLOGY CHANGES

As a reminder, the Pennsylvania Compensation Rating Bureau is making substantive updates to its experience rating methodology effective April 1, 2024. To help you prepare, IA&B hosted and Travelers presented a webinar about the changes in December.

If you missed the presentation, follow the directions below to access it. There is no charge to members.

▲ Go to our Education & Event list at IABforME.com/eventregistrations

▲ In the search, type in the event title: PA Experience Rating Plan Changes 2024

▲ Click on the OnDemand course and register.

▲ After you register, you will receive an email with information about how to access it.