BULLETIN 1989-31

 

UNIQUE AND UNUSUAL (U&U) RULE (SPECIAL RULE FOR RATING UNIQUE OR UNUSUAL CONDITIONS)

 

December 1, 1989

 

An error was contained in our Bulletin 1989-12 of May 17, 1989.  The Special Rule For Rating Unique or Unusual Conditions attached to the bulletin indicates that a rate filing pursuant to the rule must be made with our department within thirty (30) days after being made effective.  The Rule should have stated that such rates must be filed with the Commissioner of Insurance prior to quotations or being made effective.

 

Since virtually all title agents and title insurers required to file materials pursuant to the requirements of 1989 House Bill No. 2497 filed a Rule identical to the one attached to Bulletin 1989-12, an immediate filing should be made of a Rule incorporating corrected language.  Please refer to the attached example of a Rule incorporating the correct language.

 

It should also be noted that there has been some misunderstanding of the necessary procedure to follow when filing a deviation from a filed rate or charge. The Rule must first be filed.  This can be done by filing a facsimile of the attached Rule.  Individual risk filings cannot be accepted until a rule is on file with our department.

 

Please be advised that there will be situations in which both an agent/agency and an insurance company must make an individual risk filing for the same risk.  Such a circumstance would arise if different rates than those currently on file with our department are used by both the agent/agency and company.

 

When circumstances arise which require a filing on an individual risk, certain basic information should be provided.  The risk should be identified by providing the name of the insured, property location, and any policy, commitment, or file number.  Please identify the type of service/transaction involved and indicate both the filed rate/charge and special rate/charge applicable for the individual risk.  You should then indicate the reason why special rating is applicable for the risk.  Such information may be provided in letter form and an example of such a letter is attached.

 

Please take immediate action to file an amended Unique and Unusual Rule containing the correction noted on the attached.

 

Fletcher Bell

Commissioner of Insurance

 

EXAMPLE

 

TITLE INSURANCE

 

SPECIAL RULE FOR RATING UNIQUE OR UNUSUAL

CONDITIONS

 

IF IT CAN BE CLEARLY DEMONSTRATED THAT A RISK PRESENTS UNIQUE OR UNUSUAL CONDITIONS OF EXPOSURE OR HAZARD SUCH THAT THE APPLICATION OF THE NORMAL RATING PROCEDURE DOES NOT PRODUCE A REASONABLE AND EQUITABLE RATE FOR THE RISK, SUCH RISK MAY BE TREATED ON AN INDIVIDUAL RATE BASIS.

 

REQUESTS FOR THE TREATMENT UNDER THIS RULE SHALL BE SUBMITTED TO THE INSURANCE COMMISSIONER AND SHALL BE ACCOMPANIED BY EVIDENCE SPECIFICALLY SETTING FORTH THE REASONS FOR THE REQUEST ALONG WITH FULL SUPPORTING INFORMATION EVIDENCING THAT THE SPECIAL TREATMENT IS NOT A VIOLATION OF K.S.A. 40-2404(14) RELATING TO REBATES AND OTHER INDUCEMENTS IN TITLE INSURANCE.  SUCH RATES MUST BE FILED WITH THE COMMISSIONER OF INSURANCE PRIOR TO QUOTATION OR BEING MADE EFFECTIVE.

 

XYZ Title Insurance Agency

100 Main street

Salina, KS 65432

 

December 1, 1989

 

Kansas Insurance Department

420 S.W. 9th Street

Topeka, KS 66612-1678

 

TITLE INSURANCE INDIVIDUAL RISL FILED UNIQUE

AND UNUSUAL RULE

 

Gentlemen:

 

We wish to submit the following individual risk filing pursuant to our Unique and Unusual Rule presently on file with your department.

 

1.         Name of Insured/Property Insured:

            John and Mary Doe

 

2.         Property Location:

            Lots 1 and 2, New Subdivision, City of Salina, Kansas

 

3.         Policy/Commitment/File Number:  File No. SA 100 120189

 

4.         Charge/Rate:     This is an Owners Title Policy on Residential Property with $150,000 limit of liability.  We charged $705,000 for the policy.  This is $50 more than the filed charge of $655.00.

 

5.         Filed Charge/Rate:   Our filed charge of $655.00 is obtained from our rate schedule.

 

6.         Reason for Deviation from Filed Charge:

Multiple chain of title involved which required two hours of additional work in the title search, hence the additional charge of $50.

 

Please let us know if you have any questions with regard to this individual risk filing.

 

Very truly yours,

 

 

John Jones

Title Insurance Agent

On Behalf of

XYZ Title Insurance Agency