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Commercial Auto

LINE OF BUSINESS: Auto Liability LINE(S) OF INSURANCE CODES
  Auto Physical Damage Commercial Auto 20.0000
    Business Auto 20.0001
Code: 20.0000 Garage 20.0002
    Other 20.0003
   
IF CHECKLIST IS NOT APPLICABLE, PLEASE EXPLAIN:  
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REVIEW REQUIREMENTS

REFERENCE

DESCRIPTION OF REVIEW
STANDARDS REQUIREMENTS

LOCATION OF STANDARD IN FILING

GENERAL REQUIREMENTS
FOR ALL FILINGS

 

 

 

ELECTRONIC FILINGS

Insurance Bulletin 360

Title 24-A § 2304-A Rate filings

Title 24-A § 2412 Filings, approval of forms

Maine requires that all rate and form filings be filed electronically through the NAIC’s System for Electronic Rate and Form Filings (SERFF).  See also Bureau of Insurance Bulletin 360 Electronic Submissions of Rate and Form Filings.

 

COVER LETTER AND EXPLANATORY MEMORANDUM

 

Cover letters may be attached to the Supporting Documentation Tab or the text entered under the Filing Description located under the General Information tab in SERFF

 

FILING SUBMISSION

Title 24-A § 2412 Filings, approval of forms

Title 24-A § 2304-A Rate filings

Form filing requirements.

 

Rate filing requirements.

 

EFFECTIVE DATE WORDING

 

Include proposed effective date on SERFF General Information.  Policies effective at 12:01 AM Standard Time.

 

LIMITATIONS/RESTRICTIONS ON TRANSACTING BUSINESS

Title 24-A - §404. Certificate of authority required; enforcement; penalty

Must have certificate of authority to transact business

 

LINE OF AUTHORITY

Auto Liability
Auto Physical Damage

Must have requisite certificate of authority to transact business before submitting rate/rule or form filing

 

NO FILE OR FILING EXEMPTIONS

Title 24-A - §2412-A. Large commercial contracts

Policy forms and rates/rules pertaining to large commercial risks exempt from filing — see statute for criteria and definition of large commercial risk.

 

SIDE BY SIDE COMPARISON

 

Please provide a marked-up copy of the existing rate/rule page(s) or forms being revised highlighting all changes by underlining additions and striking through deletions

 

THIRD PARTY FILERS AUTHORITY

Title 24-A - §2412. Filing, approval of forms

Title 24-A - §2304-A. Rate filings

Must include authorization to communicate directly with third party filers

 

FORMS--POLICY
PROVISIONS

 

 

 

ACCESS TO COURTS

Title 24-A - §2433. Jurisdiction of courts, limitation of actions

Maine Courts must have jurisdiction

 

ACTION AGAINST COMPANY

Title 24-A § 2433.  Jurisdiction of courts, limitation of actions

Insured must be given 2 years from date of loss to bring suit against insurer.  

 

AGGREGATE LIMITS

Title 29-A - §1605. Proof of financial responsibility

Title 24-A - §2902. Uninsured vehicle coverage; insolvency of insurer

Minimum bodily injury, property damage, medical payments and uninsured/underinsured motorists for private passenger type auto — refer to Motor Vehicle Code for minimum limits for school buses, etc.

 

AMBIGUOUS & MISLEADING

Title 24-A - §2413. Grounds for disapproval

Forms shall be disapproved by the Superintendent if they contain or incorporate by reference any inconsistent, ambiguous or misleading clauses

 

APPLICATIONS

Title 24-A - §2411. Representations in applications

Title 24-A - §2412. Filing, approval of forms  

Must file applications only if to be made part of the policy
All statements are considered representations not warranties.  The Maine Fraud Warning must appear permanently affixed to all applications (i.e. new business, renewal, supplemental, etc…). 

 

ARBITRATION

Title 24-A § 2433 Jurisdiction of courts, limitation of actions

Arbitration must take place in the Maine County in which the policy was issued for delivery.

 

BLANK ENDORSEMENTS

Title 24-A - §2412. Filing, approval of forms

Blank endorsements are considered manuscript forms and generally not acceptable.  Each manuscripted change is subject to review and can be filed as a consent to form filing pursuant to 24-A § 2308(2).

 

CALCULATION OF UNEARNED/RETURN PREMIUM

 

Considered part of rating plan.

 

CANCELLATION & NON-RENEWAL

Title 24-A - §2908. Cancellation and nonrenewal

The insurance contract must list the statutory grounds for cancellation.

Minimum 10 days’ advance notice required for cancellation.  A post office certificate of mailing is conclusive proof of receipt of notice on the 3rd calendar day after mailing.

Minimum 30 days’ advance notice required for nonrenewal. A post office certificate of mailing is conclusive proof of receipt of notice on the 3rd calendar day after mailing.

 

CONTENT OF POLICIES

Title 24-A - §2901. Contracts subject to general provisions

Title 24-A - Chapter 39, CASUALTY INSURANCE CONTRACTS

Title 24-A - Chapter 27, THE INSURANCE CONTRACT

Title 24-A - MAINE INSURANCE CODE

Casualty contracts are subject to provisions of Chapter 30 as well as Chapter 27 & other applicable provisions of Title 24-A (the Maine Insurance Code)

 

CREDIT SCORING NOTICE

Title 24-A - §2169-B. Use of consumer reports in insurance underwriting

Insurance- Bulletin 329

Statute contains provisions relating to the use of credit information and credit insurance scores.

 

DISCRIMINATION

Title 24-A - §2162. Unfair discrimination, rebates prohibited -- property, casualty, surety insurance

Restrictions on policy provisions related to benefits not associated with loss and reductions in premium association with savings and expenses

 

DUTY TO DEFEND

Title 24-A - §2413. Grounds for disapproval

May not be excluded—deceptively affects coverage.  The Maine Supreme Judicial Court uses a comparison test to assess an insurer's duty to defend. See, Commercial Union Ins. v. Royal Ins., 658 A.2d 1081 (Me. 1995) (The insured is entitled to a defense if the complaint alleges any legal or factual basis that could obligate an insurer to indemnify.)

 

DRIVER EXCLUSIONS & LIMITATIONS

 

Are permitted in commercial lines

 

FICTITIOUS GROUPS

Title 24-A - §2172. Fictitious groups prohibited

Prohibited

 

FRAUD WARNING

Title 24-A - §2186. Insurance fraud prevention

Statutory (or substantially similar) wording must be included on all applications (i.e. new business, renewal, supplemental, etc…) and claim forms.

 

GROUP POLICIES

Title 24-A - §2951. Group property and casualty insurance

Rule Chapter 375

Commercial Auto is not eligible under the property and casualty law.

 

GUEST PASSENGER LIABILITY

Title 24-A - §2902-B. Motorcycle passenger exclusion

Motorcycle passenger exclusion not permitted unless insurer notifies Bureau of Insurance and each licensed producer and separate exclusionary endorsement filed and approved

 

LIMITS

Title 29-A - §1605. Proof of financial responsibility

Title 29-A - §1605-A. Medical payments

Title 24-A - §2902. Uninsured vehicle coverage; insolvency of insurer

Minimum limits found in applicable sections of Motor Vehicle Code;  UM limits must be same as BI Liability unless expressly request lower limits, but must be no less than minimum limits required for BI in Title 29-A

 

LOSS PAYEE

Title 24-A - §2908 Cancellation and Non Renewal

Bulletin 372

Where physical damage coverage is provided notice must be given to any party named in a loss payable clause. 

 

MEDICAL PAYMENTS

Title 29-A - §1605-A. Medical payments

Minimum limit required by Motor Vehicle Code effective 1-1-2008 is $2,000 per person.

 

MEDICAL PAYMENTS SUBROGATION

Title 24-A § 2910-A Subrogation;  medical payments coverage

Policy may not provide for subrogation or priority over the insured of payment for any hospital, nursing, medical or surgical services or of any expenses paid or reimbursed under the medical payments coverage in the policy in the event the insured is entitled to receive payment or reimbursement from any other person as a result of legal action or claim, except as provided in this section.

The coverage may contain a provision that allows the payments if :
A. The provision requires the written approval of the insured;

B. The provision provides that the insurer’s subrogation right is subject to subtraction to account for the pro rata share of the insured's attorney's fees incurred in obtaining the recovery from another source; and

      C. The provision is approved by the superintendent.

 

NOTICE OF CANCELLATION

Title 24-A § 2908.  Cancellation and nonrenewal  

Insurance - Bulletin 201

Minimum 10 days advance notice required for cancellation & must allow for 3 days mail time, i.e., proof of mailing is not proof of receipt until the third calendar day after mailing.  Also, notice must inform insured of right to request a hearing within 45 days of receipt of notice.

 

NOTICE OF NONE-RENEWAL

Title 24-A § 2908.  Cancellation and nonrenewal  

Insurance - Bulletin 201

Minimum 30 days advance notice required for nonrenewal & must allow for 3 days mail time, i.e., proof of mailing is not proof of receipt until the third calendar day after mailing.

 

NOTICE REQUIREMENT

Title 24-A § 2908.  Cancellation and nonrenewal

 

 

PAYMENT OF LOSS TIME PERIOD

Title 24-A §2436. Interest on overdue payments

Payment within thirty days and interest on overdue payments of 1.5% per month.

 

PERMISSIBLE RERASONS FOR CANCELLATION

Title 24-A § 2908.  Cancellation and nonrenewal

See statute for permissible grounds

 

PERMISSIBLE REASONS FOR NON-RENEWALl

Title 24-A § 2908.  Cancellation and nonrenewal

 

 

POST-JUDGMENT INTEREST

Title14 §1602-C. Interest after judgment

Insurance Bulletin 353

Maine statutory law provides for the payment of post-judgment interest and case law has held that an insurer must pay post-judgment interest as a supplemental payment without regard to the policy terms (i.e. policy limit, sub-limits, exclusions, deductibles, retentions, etc…). 

 

PRIOR APPROVAL

Title 24-A – 2304-A, Rate filings
Title 24-A - §2412. Filing, approval of forms

Filings are to be made no less than 30 days in advance of their stated effective/delivery date.  The Superintendent must act upon a filing within 30 days unless the filer requests an extension.  Filings not acted upon pursuant to these statutes be deemed after 30 days.

 

PRIVACY NOTICE

Title 24-A - §2206. Notice of insurance information practices

See Title 24-A, Ch. 24 generally for insurance information and privacy protection.

 

REBATES

Title 24-A - §2162. Unfair discrimination, rebates prohibited -- property, casualty, surety insurance  

Title 24-A - § 2163-A.  Permitted activities

Insurance Bulletin 233

Sales inducement rebates prohibited unless contained in policy

 

SUIT

Title 24-A - §2433. Jurisdiction of courts, limitation of actions

Maine courts must have jurisdiction.

Insured must be given two years to bring suit against insurer.

 

UNINSURED/UNDERINSURED MOTORISTS

Title 24-A - §2902. Uninsured vehicle coverage; insolvency of insurer

Title 29-A - §1605. Proof of financial responsibility

The policy must provide uninsured/underinsured motorist coverage. The amount of coverage may not be less than the minimum limits for bodily injury insurance under Title 29-A § 1605(1).

 

VICARIOUS LIABILITY

Title 14 - §304. Liability of parents or legal guardians for damage by children

Liable up to $800 for damage of minor between 7 and 17 years old.

 

VOIDANCE

Title 24-A - §2411 Representations in applications

Insurers may not void coverage for concealment, misrepresentation or fraud except in compliance with Maine case law.  See American Home Assurance Co. v. Ingeneri, 479 A.2d 897 (Me. 1984).

 

WARRANTIES

Title 24-A - §2411. Representations in applications

Statements on applications are deemed to be representations, not warranties.

 

 

 

 

 

RATE, RULE, RATING PLAN, CLASSIFICATION, AND TERRITORY FILING REQUIREMENTS

 

 

 

"A" RATED RISKS

Title 24-A - §2304-A. Rate filings

“a” rates and ranges must be filed along with any rates designated as “refer to company” or similar phrasing.

 

ADOPTIONS OF RATE SERVICE ORGANIZATIONS (RSO) FILINGS

Title 24-A - §2304-B. Reference filings

Insurance - Bulletin 176

Insurer may satisfy rate filing requirements by adopting advisory organization filings and filing loss costs multiplier

 

CHARGES

Title 24-A - §2304-A. Rate filings

Must be filed as part of rating plan

 

CATASTROPHE HAZARDS

Title 24-A - §2303. Making of rates

Title 24-A - §2304-A. Rate filings

Rate provisions must be supported by experience or relevant catastrophe models.

 

CONSENT-TO-RATE

Title 24-A - §2308. Excess rates

Permitted if rating manual filing previously filed does not contemplate the specific risk being assumed

 

CREDIBILITY AND FACTORS TRENDING

Title 24-A - §2303. Making of rates

Title 24-A 2304-A. Rate Filings

Credibility standards must be supported

 

CREDIT SCORING AND REPORTS

Title 24-A - §2169-B. Use of consumer reports in insurance underwriting

Insurance - Bulletin 329

Must be filed as part of rating plan.

 

DISCOUNTS & SURCHARGES

Title 24-A - §2303. Making of rates
Title 24-A - §2304-A. Rate filings

Surcharges and credits must be filed and supported

 

EXPENSE MODIFICATION PLAN

Insurance Bulletin-233

Must be filed as part of rating plan.  Rate credits resulting from a negotiated/reduced commission are limited to no greater than 10% (see Bulletin 233).

 

EXPENSES

Title 24-A - §2303. Making of rates

Rate or loss cost multiplier calculation should reflect expenses of insurer

 

EXPERIENCE

Title 24-A - §2303. Making of rates

Rate or loss cost multiplier calculation should reflect experience of insurer.

 

FEES & SERVICE CHARGES

Title 24-A § 2304-A. Rate Filings

Title 24-A - § 2403. “Premium” defined

Insurance – Bulletin 383
Must be filed as part of rating plan.  Fees and service charges include those associated with collection expense such as installment, nonsufficient funds, reinstatement, late and convenience fees, and other fees associated with policy issuance and delivery.  Fees include those imposed by third-party vendors, such as automated clearing houses.  

EXPERIENCE RATING

Title 24-A - §2304-A. Rate filings

Must be filed as part of rating plan

 

GROUP POLICIES

Title 24-A - §2951. Group Property and Casualty Insurance

Commercial  Auto is NOT among permitted products

 

INDIVIDUAL RISK RATING

Title 24-A - §2303. Making of rates

Title 24-A - §2304-A. Rate filings

Title 24-A§2412-A. Large commercial contracts

Title 24-A - §2308. Excess rates

Permitted if risk meets specified criteria.  
IRPM/ SCHEDULE RATING Title 24-A - §2304-A. Rate filings Must be filed as part of rating plan.  The maximum aggregate debit/credit permitted is 40%.  

JUDGMENT

Title 24-A - §2303. Making of rates

Rate or loss cost multiplier calculation should reflect judgment of insurer.

 

LARGE DEDUCTIBLE

Title 24-A - §2304-A. Rate filings

Must be filed as part of rating plan

 

LOSS COST MULTIPLIERS

Title 24-A - §2304-B. Reference filings

Insurance - Bulletin 176

Insurer may satisfy rate filing requirements by adopting advisory organization filings and filing loss costs multiplier

 

LOSS COSTS

Title 24-A §2304-B Reference filings

Insurance Bulletin 176

Insurer may satisfy rate filing requirements by adopting advisory organization filings and filing loss costs multiplier

 

MINIMUM PREMIUM RULES

Title 24-A - §2304-A. Rate filings

Must be filed as part of rating plan

 

MULTI-TIER

Title 24-A - §2304-A. Rate filings

Must be filed as part of rating plan

 

OTHER FEES ASSOCIATED WITH THE ISSUANCE OF A POLICY, DELIVERY OF A POLICY OR COLLECTION OF PREMIUM

Title 24-A - §2304-A. Rate filings

Title 24-A - § 2403. “Premium” defined

Must be filed as part of rating plan

 

PAYMENT PLANS

Title 24-A - §2304-A. Rate filings

Title 24-A - § 2403. “Premium” defined

Insurance Bulletin 383

Must be filed as part of rating plan

 

PRICING

Title 24-A - §2302-A. Definitions

Title 24-A - §2303. Making of rates

Title 24-A - §2304-A. Rate filings

Title 24-A - §2304-B. Reference filings

Insurance - Bulletin 176

All aspects of pricing must be filed and supported and/or may adopt advisory organization reference filings and file loss costs multiplier

 

PROFIT LOADING

Title 24-A - §2303. Making of rates

Rate or loss cost multiplier calculation may reflect profit loading and must account for anticipated investment income

 

RATE RANGES

Title 24-A - §2304-A. Rate filings

Must be filed as part of rating plan

 

RATE/LOSS COST SUPPORTING INFORMATION

Title 24-A - §2302-A. Definitions

Title 24-A - §2303. Making of rates

Title 24-A - §2304-A. Rate filings

Title 24-A - §2304-B. Reference filings

Insurance - Bulletin 176

All aspects of pricing must be filed and supported and/or may adopt advisory organization reference filings and file loss costs multiplier

 

RATING PLAN REQUIREMENTS

Title 24-A - §2304-A. Rate filings

Insurer must file and support all aspects of pricing by experience and/or may adopt advisory organization reference filing and file loss costs multiplier

 

REBATES

Title 24-A - §2162. Unfair discrimination, rebates prohibited -- property, casualty, surety insurance  

Title 24-A - § 2163-A.  Permitted activities

Insurance Bulletin 233

Insurance Bulletin 384
Sales inducement rebates prohibited unless contained in policy  

RETROSPECTIVE RATING

Title 24-A - §2304-A. Rate filings

Must be filed as part of rating plan

 

RETURN ON EQUITY DOCUMENT-- INVESTMENT INCOME

Title 24-A - §2303. Making of rates

Title 24-A - §2304-A. Rate filings

Profit must account for anticipated investment income.

Manual rates, minimum premium, class rate, rating schedule or rating plan, every other rating rule, and every modification to the foregoing should be filed and supported.

 

RISK CLASSIFICATION

Title 24-A - §2303. Making of rates

Risks may be grouped by classifications for the establishment of rates and minimum premiums.

 

SCHEDULE RATING (AKA UNDERWRITING JUDGMENT)

Title 24-A - §2304-A. Rate filings

Must be filed as part of rating plan and a maximum aggregate credit/debit permitted is 40%

 

SERVICE CHARGES (COLLECTION EXPENSE SUCH AS, BUT NOT LIMITED TO,  INSTALLMENT, NSF, REINSTATEMENT, LATE & CONVENIENCE FEES)

Title 24-A - §2304-A. Rate filings

Title 24-A - § 2403. “Premium” defined

Must be filed as part of rating plan

 

SMALL DEDUCTIBLES

Title 24-A - §2304-A. Rate filings

Must be filed as part of rating plan

 

SURCHARGES

Title 24-A - §2304-A. Rate filings

Must be filed as part of rating plan

 

WRAP-UP RATING

Title 24-A - §2304-A. Rate filings

Must be filed as part of rating plan

 

Last Updated: September 9, 2014