An Approximation for the Testing of Private Passenger Liability Territorial Rate Levels Using Statewide Distribution of Classification Data [Discussion]

A study suggested by the theme of this paper should be of substantial interest beyond the circle of a few experts in the relatively narrow field of ratemaking. The private passenger experience compilations of the National Association of Independent Insurers, which the author undertakes to interpret, comprise about one half of the total private passenger volume in this country, and in many states they account for most of the private passenger business. While Bureau members and subscribers obtain from their rating organization compilations of experience that can readily be used to test the adequacy of Bureau rates, the NAII consolidations are primarily a historical record that may, at best, be interpreted in a qualitative way, and then only with broad assumptions.