Rate Filing Under The Flex Rating System

The topic that I am going to speak about deals with making a rate filing under the flexible rating system. Flex-rating is a concept that was introduced with the enactment in New York of the Omnibus Insurance Legislation of 1986. Prior to this, there were two filing methods in New York - prior approval for private passenger automobile, workers’ compensation and most types of medical malpractice, and open competition, i.e., file and use, for the remaining lines. As a result of the liability crisis, and a reluctance to impose prior approval for lines not previously so subject, the compromise position of flex-rating was created. Under this system, rates for certain commercial liability markets may be changed without prior approval, as long as the resulting rate falls within a specified range, called a flex-band, applicable to that insurance market.