P&CPennsylvaniamedium
Under 40 P.S. § 1186, what role do advisory organizations such as ISO and AAIS play in Pennsylvania rate filings?
AThey establish binding prospective loss costs and mandatory policy forms that all Pennsylvania insurers must adopt without modification
BThey are prohibited from filing in Pennsylvania
They file prospective loss costs and policy forms that PA insurers may adopt, modify, or reject
DThey directly issue policies to PA consumers
Why this is the answer
Under the Casualty and Surety Rate Regulatory Act, advisory or rating organizations such as ISO and AAIS may file prospective loss costs, supplementary rating information, and standard policy forms with the PID. PA insurers are free to reference those filings, file their own loss cost multipliers, deviate from them, or develop independent rates entirely. The advisory filings are not binding.
Studying for the Pennsylvania Property & Casualty exam?
This question comes from our P&C bank. Take a free practice test — no signup.