Companies that use the AAIS Inland Marine
Guide have a new set of rating rules and worksheets for Motor
Truck Cargo (MTC) insurance.
AAIS released the new materials in May,
following lengthy scrutiny by the California Department of
Insurance. “These rating procedures are now approved in one of
the most rigorous regulatory jurisdictions in the country,” says
Robert Guevara, AAIS vice president of inland marine.
Electronic versions of the worksheets are
being developed for loading onto personal computers.
MTC insurance provides coverage for a motor
carrier’s legal liability for loss or damage to cargo the
carrier is hauling for others. The Guide’s revised and expanded
Motor Truck Cargo section provides forms for incorporating
first-party coverage for mobile equipment, moving equipment,
electronic equipment, and personal property into MTC policies.
MTC is one of the principal classes in the
Inland Marine Guide, a resource of forms, rating procedures,
underwriting guidelines, and other information for the
traditionally nonfiled classes of inland marine insurance.
Policy forms and some rating procedures
provided in the Guide are filed in states, including California,
that do not exempt inland marine insurance from filing
requirements.
According to Guevara, some of the enhancements
to the MTC rating procedures reflect direct input from companies
that use the Guide.
“For example,” he says, “we have added
rating steps and rating information that allow underwriters to
differentiate among long-haul truckers by their radius of
operation, and among terminals by their size.
“In the past, there were no standardized
procedures for incorporating such distinctions into an MTC
premium, and companies asked us to come up with something.”
There are two basic MTC rating procedures in
the Inland Marine Guide:
-
One procedure determines the premium on a
per vehicle basis. This is recommended if the insured has
fewer than 10 “power units” (vehicles capable of pulling
trailers) or if the insured’s gross annual receipts are
$500,000 or less; and
-
Another procedure determines the premium
on a gross receipts basis. This is recommended if the insured
has more than 10 power units or gross annual receipts greater
than $500,000.
-
For each of these procedures, commodity
classifications are provided, along with instructions for
determining a basic load and modifying that load for the
following factors:
-
Refrigeration breakdown exposure;
-
Contingent coverage;
-
Cargoes that are hazardous or targets for
theft;
-
Radius of operations;
-
Terminal exposures;
-
Use of a named perils form in place of the
usual open perils coverage;
-
Amount of the deductible; and
-
Any applicable Individual Risk Premium
Modification factor.
In addition to the two basic rating
procedures, there is a separate, shorter procedure for determining
the premium for the first party coverages (mobile equipment,
moving equipment, electronic equipment, and personal property),
plus a procedure for rating coverage for trailers.
The section concludes with instructions for
implementing reporting conditions to adjust premium on a monthly,
quarterly, or annual basis.
Companies that wish to affiliate with AAIS for
use of the Inland Marine Guide can contact Rick Maka, director of
marketing, at rickm@AAISonline.com,
or by calling 800/564-AAIS.
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