Rate Regulation and Rate Making

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I. Expertise as to Rate Regulation and Rate Making.

In connection with property casualty rate regulation and rate making and its application to property casualty products, the following experiences, among others, formulate that expertise:

  • I have a B.A. in mathematics (specifically, secondary mathematics education). Mathematics is the intellectual foundation and underlying science to most all insurance rate making and rate approval and rate/premium allocation;
  • I am a lawyer and member of the Iowa, Illinois (inactive) and Florida bars and as a lawyer, I have handled rate making matters before departments of insurance, both for and against rate proposals;
  • In my five regulatory positions, I had daily responsibility under the Iowa Insurance Code for all rate making and rate approvals of property casualty insurance including most all property casualty lines and types of insurance. These regulatory positions included the following:
    • Commissioner of Insurance (Iowa);
    • First Deputy Commissioner of Insurance (Iowa);
    • Assistant Attorney General, assigned on a full time basis to the Iowa Department of Insurance;
    • Administrative Law Judge;
    • Executive and Member of the National Association of Insurance Commissioners (NAIC).
  • In these capacities, among other things, I regularly conducted rate hearings in my regulatory capacity.
  • As general counsel and chief lobbyist to the American Academy of Actuaries (“Academy”), I had daily exposure to and an obligation to understand rate making as executed by actuaries. The Academy is to actuaries as to what the American Bar Association is to lawyers.
  • In that same capacity, I provided regular and ongoing legal counsel to the Actuarial Standards Board (“ASB” – the actuarial equivalent to the Financial Accounting Standards Board – “FASB”), which promulgates, among other things, rate making professional standards that come to bear on an actuary’s rate making product.
  • As President and Chief Executive Officer of the National Council on Compensation Insurance (“NCCI”), a major U.S. property casualty insurance rate-making organization, doing business throughout the U.S., including Georgia, I had responsibility for all rate making methodologies in the formulation of workers compensation rates and in the filing and gaining approval of those rates before most all Commissioners of Insurance in the U.S.
  • During my nearly decade as the CEO of NCCI, my company formulated and filed about $100 billion of rates. NCCI is among the world’s largest rate making organizations.
  • Elected Member of the Florida House of Representatives (currently) where I serve as a Member and Vice Chairman of the Insurance Committee (among other committees), which has legislative liaison duties to the Florida Office of Insurance Regulation (“FL OIR”), whose own duties include significant rate making (as embedded in rate proposals submitted by insurers to the FL OIR) and rate approval.
  • Past Member of the Executive Committee of the National Association of Insurance Commissioners (“NAIC”), which, among other things, promulgates model rate and rate making and rate approval statutes and administrative regulations (see the below description of the NAIC).

II. Expertise As to Actuarial Issues.

Specific as to the actuarial component of rate making, I show the following:

A. Expertise as to Actuarial Issues as a Regulator. As Insurance Commissioner, my agency was responsible for solvency oversight, insurance company examinations and financial and accounting matters of insurance companies. In addition, that oversight included the responsibility of overseeing practices of insurers, agents and actuaries who formulated their rates.

As a member of the NAIC, and as a Member of the Executive Committee, I oversaw all actuarial functions of the NAIC, including service on the Casualty Actuarial Committee as well as the Accounting Practices and Procedures Committee.

B. Expertise as to Actuarial Issues as a CEO. During my tenure as CEO, NCCI had (and continues to have) responsibility to accurately price and file pricing for some $12 - $15 billion of workers compensation insurance annually in 40 states throughout the U.S. NCCI prepared proposed premium filings for regulators to approve by extracting key data from its 600 member insurance companies and then used that data to project necessary premium changes. NCCI carried out its intense pricing work though the professional efforts of an actuarial division of about 150 personnel. These individuals included support staff; statisticians; actuarial students and qualified actuaries. This staff produced about 40 major rate filings annual covering 40 states, pricing some $12 to $15 billion of insurance (workers compensation); and included the responsibility to advocate those rate changes before state government.

C. Expertise as to Actuarial Issues: American Academy of Actuaries. I served as General Counsel and Director of Government Relations for the American Academy of Actuaries, including advising on admissions, discipline, federal antitrust and general corporate law. I represented the 20,000-member professional organization before Congress (e.g., Senate Committees on Banking, Commerce, Finance and Labor, and House committees on Education, Labor, Energy, and Ways and Means) and the various federal regulatory agencies. The Academy is the professional organization of actuaries and includes qualified actuaries from all disciplines and all forms of insurers. Academy members included affiliation with virtually every property casualty insurance company and actuarial consulting company in America. The Academy’s Board of Directors was likewise made up of leading insurance company executives from such companies.

D. Expert Experience and Authorship on Actuarial Issues. I have served in a number of cases as an expert on actuarial issues, including in Arizona, Florida and California. I am also the author of a number of articles on the actuarial profession.

E. Actuarial Issues as Reinsurance Arbitrator. I am certified by ARIAS as one of about 400 U.S. certified reinsurance arbitrators and sit as an arbitrator on disputes between insurers and their reinsurers; actuarial issues routinely arise in such disputes in the form of pricing disputes including information (and miss-information) supplied by the ceding company and that information’s (and miss-information’s) positive or adverse effect on the pricing that was agreed to at the time of the initial reinsurance agreement.

Read more about Insurance Regulatory Trends for 2017.

Contact Bill Hager at 561-306-5072 or via email to discuss your case.

William D. Hager - Insurance and Reinsurance Expert and Arbitrator

William D. Hager

Insurance and Reinsurance
Expert and Arbitrator

561-306-5072


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