P&CNJmedium
Under NJ rate regulation, how may a P&C insurer use rate-related materials prepared by an advisory organization such as ISO or AAIS?
AAdvisory organization filings are categorically prohibited in NJ, and no insurer may reference ISO or AAIS loss-cost data in any rate filing submitted to DOBI
The insurer may reference advisory loss-cost filings but must file its own loss-cost multiplier and final rates with DOBI
COnly if the Governor specifically authorizes each advisory filing on a case-by-case basis before the insurer may reference any portion of the loss-cost data
DAdvisory filings automatically become the insurer's rate without further filing, and no loss-cost multiplier or final rate submission to DOBI is ever required
Why this is the answer
NJ permits advisory organizations such as ISO or AAIS to file prospective loss costs and other reference materials with DOBI. Each insurer may reference those filings but must independently file its loss-cost multiplier (LCM) and the resulting final rates. Advisory filings are not prohibited, do not automatically become the insurer's rate, and do not require gubernatorial action.
Studying for the NJ Property & Casualty exam?
This question comes from our P&C bank. Take a free practice test — no signup.