Seasons Greetings

This will be the last AAIS Advisory for 2008. Our next Advisory will be issued  Jan. 7, 2009.

All of us at AAIS wish you a happy holiday season and a safe and prosperous new year.

AAIS TO ISSUE EXPANDED, UPDATED
CAUSE OF LOSS REPORTS FOR
HOMEOWNERS INSURANCE

Later in December, AAIS will issue updated and expanded reports on causes of loss in homeowners insurance. Eligible affiliates will be notified when the reports are posted on AAISdirect.

The reports indicate the percentage and average severity of losses due to property perils (fire, wind, theft, etc.) and liability claims (bodily injury, property damage, med pay, and other) for accident years 2005-07, and for the 3-year combined period.

The introduction of accident-year data in place of calendar-year data will make these AAIS reports more valuable to company personnel charged with underwriting, pricing, and loss reserving.

For each state, four tables are provided:

• Incurred loss distributions including catastrophe losses;

• Incurred loss distributions excluding catastrophe losses;

• Severity distributions including catastrophe losses; and

• Severity distributions excluding catastrophe losses.

Companies interested in affiliating with AAIS for use of its Homeowners Program and AAISdirect Internet service can contact Rick Maka, director of marketing, at rickm@AAISonline.com or by calling 800-564-AAIS.

CALIFORNIA INSURANCE DEPARTMENT
SEEKS DATA ON RECENT WILDFIRES

In a recent circular letter, the California Department of Insurance (CDI)called for property/casualty companies to provide summary claims and loss data from the November 2008 southern California wildfires.

All P/C carriers licensed in the state are asked to respond, even those that did not incur any losses. The circular provides instructions for responding to the data call.

Prior approval changes

In other California news, two insurance trade associations recently submitted a joint written statement expressing concerns over changes to prior approval regulations proposed by the CDI.

The proposed changes deal with components of a rate included in a company's loss cost multiplier, and do not directly affect loss cost development at AAIS.

In the statement, the National Association of Mutual Insurance Companies (NAMIC) and its California partner, the Pacific Association of Domestic Insurance Companies (PADIC), object to the utilization of an "efficiency standard" based on historic expense ratios to restrict rates.

In addition, the statement objects to proposed provisions tying rate increases to rates of return, requiring at least a two-year period for phasing in rate increases greater than 15%, and empowering the insurance commissioner to, in essence, require approved personal auto and homeowners rates to be refiled after three years.

The statement also seeks clarification of proposed language that would deem proposed rate reductions to be approved 60 days after the submission of an application to reduce rates.

The NAMIC-PADIC statement is available to registered members of NAMIC at www.namic.org.

FILING UNDERWAY FOR NEW
AGRICULTURAL GENERAL LIABILITY PROGRAM

AAIS has initiated the countrywide filing of its new Agricultural General Liability (AgGL) Program.

The AgGL, described in earlier AAIS communications, is the property/casualty industry's first general liability program specifically developed for farm and agribusiness risks.

The program features two base forms:

• A Farm Commercial Liability Coverage form designed for farming exposures, and

• An Agribusiness Commercial General Liability form designed for any farm or agribusiness exposures a company wants to cover under CGL-type policy terms.

Both forms can be endorsed to provide personal liability coverage. In all, there are more than 160 endorsements available under the program.

The AgGL manual includes 360 classifications of agricultural risks, and introduces sales-based rating in 64 farm classes, along with a commodity price stabilization plan that prevents commodity price swings from distorting sales-based rating.

Companies interested in affiliating with AAIS for use of the Agricultural General Liability Program can contact Rick Maka, director of marketing, at rickm@AAISonline.com or by calling 800-564-AAIS.

BOATOWNERS
STATISTICAL PLAN
TO BE REVISED

Insurers that report statistical data to AAIS under the Boatowners Program will be notified next week of revisions to the statistical plan for that program.

Among other things, the revised statistical plan will include new codes and fields pertinent to the latest revision of the AAIS Boatowners Program, plus some additional codes for reporting data for a non-AAIS boat insurance program.

Companies will be asked to implement these changes as soon as possible, but no later than for policies issued on Jan. 1, 2010.

AAIS is a licensed statistical agent in all states except Texas. To learn more about AAIS statistical reporting service, which emphasizes cooperation with reporting companies, contact Larry Thill, manager of the AAIS data management department, at larryt@AAISonline.com, or by calling 800-564-AAIS.

WEB SEMINAR RECORDINGS AND
BUILDERS' RISK PRESENTATION
NOW AVAILABLE

Recordings of two recent AAIS web seminars and another slide presentation are available at www.AAISonline.com, AAIS's public website. The three presentations include:

• The recording of an October web seminar featuring Pam Nykaza, senior product development specialist for inland marine, describing the latest revision to the AAIS Boatowners Program.

• A slide presentation, with audio commentary by Robert Guevara, AAIS vice president of inland marine. on the latest revision to the Builders' Risk section of the AAIS Inland Marine Guide.

• The recording of a November web seminar featuring Sherry Taylor, manager of farm and agribusiness, and Deborah Summerlin, vice president of insurance lines, describing the new AAIS Agricultural General Liability (AgGL) Program.
  
  Companies interested in using the AgGL can get a link to this recording by contacting Joyce Tignino, vice president of marketing and industry relations, at joycet@AAISonline.com, or by calling 800-564-AAIS.

For each of these presentations, you will need a computer with speakers to hear the audio commentary.

PROGRAM PLANNING UNDERWAY
FOR 2009 AAIS 'MAIN EVENT'

AAIS is now evaluating topics for its 2009 Main Event conference, April 26-28 in Half Moon Bay, Calif.

This executive conference focuses on product-related issues of strategic importance to property/casualty insurers. To that end, AAIS is seeking speakers on trends in science, technology, law, economics, and other fields that will impact property and liability risks and, consequently, the design and development of P/C insurance products.

There are two ways to submit ideas for topics:

• Use the AAISalert online submission form. This web page asks users to describe new exposures they are concerned about, indicate how they address the exposure or plan to address it, and how it is likely to affect property/casualty insurance.

• Contact Joseph Harrington, AAIS director of corporate communications, at joeh@AAISonline.com, or by calling 800-564-AAIS.