TITLE XXXVII
INSURANCE
Chapter 412
REGULATION OF FORMS AND RATES FOR PROPERTY AND CASUALTY INSURANCE
Section 412:1
412:1 Purpose. –
The purpose of this chapter is:
I. To protect policyholders and the public against the adverse effects of excessive, inadequate or unfairly discriminatory rates.
II. To promote price competition among insurers so as to provide rates that are responsive to competitive market conditions.
III. To cause the provision of price and other information to enable consumers to purchase insurance suitable for their needs and to foster competitive insurance markets.
IV. To improve availability, fairness, and reliability of insurance.
V. To provide regulatory procedures for the maintenance of appropriate data reporting systems as necessary to allow the commissioner to monitor degree of competition in the marketplace.
VI. To authorize essential cooperative action among insurers in the ratemaking process and to regulate such activity to prevent practices that tend to substantially lessen competition or create a monopoly.
VII. To encourage the most efficient and economical marketing practices.
VIII. To prohibit price fixing agreements and other anti-competitive behavior by insurers.
IX. To ensure that policy forms, endorsements, applications, or other contract language comply with provisions of the insurance laws and do not contain provisions which are inequitable, misleading, deceptive, or encourage misrepresentation.
X. To protect policyholders and the public against the adverse effects of any policy provision that is not in the public interest or is contrary to public policy.
Source. 2003, 150:1. 2008, 212:3, eff. June 16, 2008.
Section 412:2
412:2 Scope of Chapter. –
I. This chapter applies to all classes of property and casualty insurance that are now or may hereafter be written in any combination on risks or operations located in this state under the provisions of RSA 401:1, I, II, V, VI, VII, and VIII and any miscellaneous insurance under RSA 401:1-a that is designated by the commissioner to be regulated under this chapter.
II. This chapter shall not apply to:
(a) Reinsurance, other than statutorily authorized joint reinsurance mechanisms.
(b) Accident and health insurance.
(c) Life insurance and annuities.
(d) Insurance on vessels or craft, their cargoes, marine builders' risks, marine protection and indemnity, or other risks commonly insured under ocean marine, as determined by the commissioner.
(e) Title insurance, except as otherwise provided in RSA 416-A:17 and RSA 416-A:17-a.
(f) Insurance on hulls of aircraft, including their accessories and equipment, and liability resulting from the ownership, use or maintenance of aircraft.
Source. 2003, 150:1. 2004, 156:1, eff. July 23, 2004. 2017, 55:1, eff. Aug. 1, 2017.
Section 412:3
412:3 Definitions. –
In this chapter:
I. [Repealed.]
II. "Advisory organization" means any entity, including its affiliates or subsidiaries, which either has 2 or more member insurers or is controlled either directly or indirectly by 2 or more insurers, and which assists insurers in ratemaking-related activities such as those enumerated in RSA 412:4 and RSA 412:20. Two or more insurers having a common ownership or operating in this state under common management or control constitute a single insurer for purposes of this definition.
III. "Classifications system" or "classification" means the process of grouping risks with similar risk characteristics so that differences in costs may be recognized.
IV. "Commercial risk" means any kind of risk that is not a personal risk.
V. "Commissioner" means the insurance commissioner.
VI. "Competitive market" means a market that has not been found to be noncompetitive pursuant to RSA 412:13.
VII. "Developed losses" means losses, including loss adjustment expense, adjusted using standard actuarial techniques, to eliminate the effect of differences between current payment or reserve estimates and those which are anticipated to provide actual ultimate loss, including loss adjustment expense payments.
VIII. "Expenses" mean that portion of a rate attributable to acquisition, field supervision, collection expenses, general expenses, taxes, licenses and fees.
IX. "Experience rating" means a rating procedure utilizing past insurance experience of the individual policyholder to forecast future losses by measuring the policyholder's loss experience against the loss experience of policyholders in the same classification to produce a prospective premium credit, debit or unity modification.
X. "Joint underwriting" means an arrangement established to provide insurance coverage for a risk pursuant to which 2 or more insurers jointly contract with the insured at a price and under policy terms agreed upon between the insurers.
XI. "Large commercial policyholder" means an insurance contract holder that is a corporation, partnership, trust, sole proprietorship, or other business or public entity that uses an employed or retained risk manager to procure insurance and that has certified that it meets:
(a) At least one of the following 4 criteria:
(1) A net worth of $10,000,000 as certified by a certified public accountant or public accountant authorized to do business in this state.
(2) Net revenue or sales of $5,000,000 as certified by a certified public account or public accountant authorized to do business in this state.
(3) A total of more than 25 employees per individual company or more than 50 employees per holding company.
(4) Aggregate property and casualty insurance premiums, excluding workers' compensation, medical malpractice, life, health, and disability insurance premiums of $25,000 or more.
(b) "Large commercial policyholder" also includes a nonprofit or public entity with an annual budget or assets of $25,000,000 or more that employs or retains a risk manager to procure insurance and meets the premium criteria listed in subparagraph (a)(4), and a municipality with a population of 20,000 or more that meets the premium criteria listed in subparagraph (a)(4).
(c) In this section, "risk manager" means a chartered property and casualty underwriter, certified insurance counselor, an associate in risk management, certified risk manager or a licensed insurance consultant.
XII. "Loss adjustment expense" means the expenses incurred by the insurer in the course of settling claims.
XIII. "Market" means the interaction between buyers and sellers consisting of a product component and a geographic component. A product component consists of identical or readily substitutable products including but not limited to consideration of coverage, policy terms, rate classifications and underwriting. A geographic component is a geographical area in which buyers seek access to the insurance product through sales outlets and other distribution mechanisms. Determination of a geographic component shall consider existing distribution patterns.
XIV. "Noncompetitive market" means a market for which there is a ruling in effect pursuant to RSA 412:13 that a reasonable degree of competition does not exist.
XV. "Personal risk" means homeowners, including dwelling insurance for owner-occupied one to 4 family buildings, tenants, private passenger non-fleet automobiles on a personal automobile policy, mobile homes and other property and casualty insurance for personal, family or household needs. This includes any property and casualty insurance that is otherwise intended for non-commercial coverage.
XVI. "Pool" means a voluntary arrangement, established on an on-going basis, pursuant to which 2 or more insurers participate in the sharing of risks on a predetermined basis. The pool may operate through an association, syndicate, or other pooling agreement.
XVII. "Prospective loss costs" means that portion of a rate that does not include provisions for expenses, other than loss adjustment expenses, or profit, and are based on historical aggregate losses and loss adjustment expenses adjusted through development to their ultimate value and projected through trending to a future point in time.
XVIII. "Rate" means that cost of insurance per exposure unit whether expressed as a single number or as a prospective loss cost with an adjustment to account for the treatment of expenses, profit, special assessments, and individual insurer variation in loss experience, prior to any application of individual risk variations based on loss or expense considerations, and does not include minimum premium.
XIX. "Residual market mechanism" means an arrangement, either voluntary or mandated by law, involving participation by insurers in the equitable apportionment among them of insurance which may be afforded applicants who are unable to obtain insurance through ordinary methods.
XX. "Special assessments" means guaranty fund assessments, assessments for residual market mechanisms, vocational rehabilitation fund assessments, and other similar assessments.
XXI. "Statistical agent" means an entity that has been licensed by the commissioner to collect statistics from insurers and provide reports developed from these statistics to the commissioner for the purpose of fulfilling the statistical reporting obligations of those insurers under this chapter.
XXII. "Supplementary rating information" means any manual or plan of rates, or prospective loss costs, classification, rating schedule, minimum premium, policy fee, rating rule, underwriting rule and any other similar information needed to determine the applicable rate in effect or to be in effect.
XXIII. "Supporting information" means:
(a) The experience and judgment of the filer and the experience or data of other insurers or advisory organizations relied upon by the filer;
(b) The interpretation of any other data relied upon by the filer;
(c) Description of methods used in making the rates; and
(d) Any other information required by the commissioner to be filed.
XXIV. "Trending" means any procedure for projecting losses to the average date of loss, or premiums or exposures to the average date of writing, for the period during which the policies are to be effective.
Source. 2003, 150:1. 2004, 156:6, 8, I, eff. July 23, 2004. 2016, 115:1, eff. July 19, 2016. 2018, 68:1, eff. July 24, 2018.
Section 412:4
412:4 Consumer Information. –
I. The commissioner may utilize, develop, or cause to be developed consumer information which shall be provided on a readily available basis to purchasers of homeowners, private passenger nonfleet automobile, or property insurance for personal, family, or household needs.
II. The commissioner may utilize, develop, or cause to be developed consumer information which shall be provided on a readily available basis to purchasers of insurance for commercial risks and personal risks not otherwise specified herein.
III. Such consumer information may be developed internally within the insurance department, in cooperation with other state insurance departments, through outside contractors or in any other appropriate manner. Insurers, advisory organizations, statistical agents, and other persons or organizations involved in conducting the business of insurance in this state, to which this section applies, shall reasonably cooperate upon request in the development and utilization of consumer information.
Source. 2003, 150:1, eff. Jan. 1, 2004.
Forms Regulation-General Provisions
Section 412:5
412:5 Approval of Form. –
I. Every insurer and advisory organization shall file policy forms, endorsements, and other contract language covered by this chapter and RSA 264, for a waiting period of 30 days before it becomes effective, which period may be extended by the commissioner for an additional period not to exceed 30 days if written notice or electronic notice is given within the initial 30-day waiting period to the insurer or advisory organization which made the filing that additional time is needed for the consideration of the filing. Upon written application by the insurer or advisory organization, the commissioner may authorize a filing which has been reviewed to become effective before the expiration of the waiting period or extension thereof. The commissioner may disapprove such form if it contains a provision that does not comply with the requirements of law, is not in the public interest, is contrary to public policy, is inequitable, misleading, deceptive, or encourages misrepresentation of such policy. An approved filing and any supporting information that is not exempt from disclosure by law or rule shall be open to public inspection on or after the date that the filing is approved or the effective date, whichever is later. A filing shall be deemed to meet the requirements of this chapter unless disapproved by the commissioner within the waiting period or extension thereof. Every policy issued by an insurer on an unapproved form shall constitute a separate violation under RSA 412:40.
I-a. Except as otherwise provided in this section:
(a) Forms for the following types of commercial insurance shall be exempt from the 30-day waiting period requirement of paragraph I and shall instead be filed for informational and auditing purposes only and shall be filed within 30 days of the effective date:
(1) Fidelity.
(2) Kidnap and ransom.
(3) Political risk and expropriation.
(4) Excess and umbrella liability.
(5) Directors' and officers' liability.
(6) Fiduciary liability.
(7) Employment practices liability.
(8) Errors and omissions and professional liability other than medical malpractice.
(9) Media liability.
(10) Product liability, product recall, and completed operations.
(11) Highly protected commercial property.
(12) Commercial flood insurance other than the National Flood Insurance Program.
(13) Any other commercial lines of insurance coverage or risk that the commissioner shall, pursuant to regulation, exempt from policy form filing requirements in order to promote enhanced competition or to more effectively use the resources of the department.
(b) All other standards in paragraph I shall apply to forms that are filed for information and audit purposes under this paragraph.
(c) Subparagraph (a) shall not apply to the insurance listed under subparagraphs (a)(1)-(11) when:
(1) The commissioner has determined that a reasonable degree of competition does not exist for that type of insurance, and a ruling has been issued to that effect in accordance with RSA 412:13; or
(2) The policy form for that type of insurance is issued by a risk sharing plan established under RSA 404-C.
II. No liability policy issued or delivered in this state that insures against personal risk shall contain any exclusion which would preclude coverage for intra-family or inter-spousal claims.
III. No liability policy issued or delivered in this state shall contain coverage for payment of a fine or penalty for a criminal offense provided, however, the policy may provide coverage for defense costs and restitution to injured parties.
IV. An insurer may authorize an advisory organization to file policy forms, endorsements and other contract language on its behalf.
V. Every insurer and advisory organization shall provide reasonable means whereby any person aggrieved by the application of an insurer's rating system, claims practices, sales practices or underwriting procedures may be heard, in person or by an authorized representative, upon the person's written request to review the manner in which such procedures were applied in connection with insurance afforded or tendered to the person.
VI. This section shall not apply to the following insurance products: mortgage guaranty, surety bonds, commercial inland marine, financial guaranty, and boiler and machinery.
Source. 2003, 150:1. 2006, 9:2. 2008, 212:4. 2009, 215:4. 2014, 31:7. 2015, 70:1, eff. Aug. 1, 2015. 2017, 55:2, 3, eff. Aug. 1, 2017. 2018, 68:2, eff. July 24, 2018. 2019, 10:1, 2, eff. July 9, 2019.
Section 412:6
412:6 Prepayment of Judgment Prohibited. –
No insurer shall issue or deliver any policy of insurance in New Hampshire covering liability claims for bodily injury, property damage, or wrongful acts , which shall contain any provision making the pre-payment of any judgment by the insured a condition precedent to recovering under the policy or maintaining any right of action against the insurer upon the policy. Every such policy shall contain an agreement in clear and explicit terms binding the insurer, to the extent of the liability assumed by the policy, to pay and satisfy any such judgment, and to protect the insured against the levy of any execution issued upon the same.
Source. 2003, 150:1, eff. Jan. 1, 2004. 2023, 154:2, eff. Sept. 26, 2023.
Section 412:6-a
412:6-a Changes in Coverage. –
I. In the event that a company or filing or advisory organization eliminates or reduces coverages, conditions, or definitions in its policies issued under this section other than at the request of a policyholder, the company shall attach to the policy at renewal a printed notice in each such policy explaining clearly what coverages, conditions, or definitions have been eliminated or reduced. If explanations of such reduced or eliminated coverages are not contained in the printed notice attached to its policies at renewal, then such coverages, conditions, or definitions shall remain in full force and effect without such reductions or eliminations.
II. Except as provided in paragraph III, no insurance policy renewal shall add any stand-alone, premium bearing coverage unless such coverage is added at the request of the policyholder or is due to a requirement imposed by law.
III. If the policyholder has not requested that new premium bearing coverage be added to a policy upon renewal, but such coverage is added because the company is replacing coverage or a policy that the company no longer offers, the company shall provide a printed notice explaining clearly what coverage has been added and how to obtain information concerning premium impact.
IV. The requirements of this section shall apply to such policies renewed or endorsed with the same company, or a group of companies affiliated by ownership or contractual relationship encompassing joint operations or processes as filed and approved by the commissioner.
Source. 2004, 156:2. 2006, 196:6. 2009, 215:7, eff. Sept. 13, 2009. 2018, 132:3, eff. July 29, 2018.
Section 412:6-b
412:6-b Certificates of Insurance. –
I. In this section:
(a) "Certificate" or "certificate of insurance" means any document or instrument, no matter how titled or described, which is issued by an insurer or insurance producer as evidence of property or casualty insurance coverage. "Certificate" or "certificate of insurance" shall not include a policy of insurance or insurance binder.
(b) "Certificate holder" means any person, other than a policyholder, who possesses a certificate of insurance and is identified as the certificate holder on the certificate.
(c) "Insurance producer" means an insurance producer licensed under RSA 402-J.
(d) "Insurer" means an entity established to conduct the kinds of insurance business as provided in RSA 401 and licensed in accordance with the provisions of RSA 402 or RSA 405.
(e) "Person" means any individual, partnership, corporation, association, or other legal entity, including any government or governmental subdivision or agency.
(f) "Policyholder" means a person who has contracted with a property or casualty insurer for insurance coverage.
II. (a) No person shall issue a certificate of insurance that:
(1) Does not comply with the requirements of subparagraph (b).
(2) Is misleading, deceptive, or encourages misrepresentation.
(3) Violates any law.
(b) The following are requirements for the content, purpose, issuance, and use of certificates of insurance:
(1) Each certificate shall contain the following statement, or language substantially similar, in sufficient font and size and located on the certificate to be readily identifiable:
"This certificate of insurance is issued as a matter of information only and confers no rights upon the certificate holder. This certificate does not amend, extend, or alter the coverage, terms, exclusions, and conditions afforded by the policy or policies referenced herein."
(2) No person shall demand or require the issuance of a certificate of insurance from an insurer, insurance producer, or policyholder that contains any false or misleading information concerning any policy of insurance to which the certificate makes reference.
(3) No person shall knowingly prepare or issue a certificate of insurance that contains any false or misleading information.
(4) No person shall prepare or issue a certificate of insurance that purports to affirmatively or negatively alter, amend, or extend the coverage provided by any policy of insurance referenced in the certificate; provided that with respect to subparagraph (3) and this subparagraph a certificate may show an umbrella/excess liability limit less than the actual policy limit if the certificate is issued with respect to a particular agreement or contract and such lower limit meets the requirements of the agreement.
(5) The requirements of this section shall apply to certificates of insurance issued as evidence of insurance policies and coverage on property, operations, or any risk located in this state, regardless of where the certificate holder, policyholder, insurer, or insurance producer is located.
(6) No certificate of insurance shall contain references to contracts, including construction or service contracts, other than the referenced contract of insurance, unless such reference is in relation to coverage or other requirements of the insurance contract.
(7) A certificate holder shall only have a contractual right to notice of cancellation, nonrenewal, or any similar notice concerning a policy of insurance if the person is identified and designated within the policy or any endorsement to that policy as an additional insured and that policy or endorsement requires notice to be provided.
(c) The commissioner may publish sample certificates of insurance which provide templates as to form and content, which, in his or her opinion, meet the requirements of subparagraph (b) and are acceptable for use by insurers and insurance producers. In addition to templates developed by the commissioner, insurance industry trade organizations, and supporting entities, may submit templates for consideration and inclusion in the set of sample certificates so published.
(d) An insurer or insurance producer may prepare or issue an addendum to a certificate that clarifies and explains the coverage provided by any policy of insurance referenced in the certificate and otherwise complies with the requirements of this section.
(e) An insurance producer may charge a reasonable fee for providing a certificate. A fee shall be reasonable if it accurately reflects the actual effort and cost to the producer required to prepare and issue the certificate.
(f) With the permission of the policy holder, an insurance producer may provide any bank or lending institution with a copy of the certificate of insurance, policy of insurance, or insurance binder relating to the subject property. If the insurance producer provides a copy of the insurance, policy of insurance, or insurance binder, an insurance producer may complete supplemental questionnaires for a bank or lending institution, provided that the insurance producer shall not be required to analyze or warrant any provisions of the insurance policy.
Source. 2011, 137:1. 2012, 100:6-8, eff. July 28, 2012. 2018, 24:1, eff. July 14, 2018.
Forms Regulation-Large Commercial Policyholder
Section 412:7
412:7 Policies; Forms. –
For policies of insurance issued to large commercial policyholders defined in RSA 412:3, XI, the filing requirements for forms or policy contracts shall not apply, except that:
I. All policies issued pursuant to the provisions of this chapter shall contain a conspicuous disclaimer printed in at least 10-point, bold-faced type that states that the policy applied for, including the rates, rating plans, resulting premiums, and the policy forms, are not subject to the rate and form requirements of this state and other provisions of the insurance law that apply to other commercial products and may contain significant differences from a policy that is subject to all provisions of the insurance law. Such notice shall set forth possible differences in policy conditions, forms, and endorsements, as compared to a policy that is subject to all of the provisions of the insurance law. The commissioner may prescribe the format and provisions of such notice. The disclosure notice shall also include a policyholder's acknowledgment statement, to be signed and dated prior to the effective date of the coverage, and shall remain on file with the insurer.
II. In procuring insurance, a large commercial policyholder shall certify that it meets the eligibility requirements set out in RSA 412:3, XI and specify the requirements that the policyholder has met. This certification is to be completed annually and remain on file with the insurer.
III. A surplus lines broker seeking to obtain or provide insurance for a large commercial policyholder is not authorized to purchase insurance from any eligible unauthorized insurer without making a diligent search of authorized insurers as required by RSA 405:24.
Source. 2003, 150:1. 2004, 156:3, eff. July 23, 2004.
Forms Regulation-Motor Vehicle Insurance
Section 412:8
412:8 Requirements of Coverage. –
I. No insurer shall issue any motor vehicle liability policy, with respect to any motor vehicle registered or principally garaged in this state, that does not provide at least the minimum coverage set forth in RSA 264.
II. No liability policy issued with respect to any motor vehicle registered or principally garaged in this state that insures against personal risk shall contain any exclusion which would preclude coverage for intra-family or inter-spousal claims.
III. When an automobile insurance policy contains coverage for physical damage by reason of collision, any deductible amount of such coverage shall not apply if the damage is caused by an uninsured motor vehicle, including a motor vehicle which is uninsured within the definition of RSA 259:117, and the operator of the uninsured vehicle has been positively identified and is solely at fault.
Source. 2003, 150:1. 2009, 215:5. 2014, 31:8, eff. July 26, 2014. 2017, 55:4, eff. Aug. 1, 2017.
Section 412:9
412:9 Prohibition on Nonresident Automobile Insurance. –
Policies of automobile insurance, as defined in RSA 417-A, shall only be issued and renewed to residents of the state of New Hampshire, except that such policies shall also be permitted to be sold to any person if the vehicle insured is exclusively garaged in New Hampshire. Notwithstanding any other provision of law to the contrary, no individual shall be provided coverage under a policy of automobile insurance, as defined in RSA 417-A, if such applicant or applicants have been determined by the insurer to have intentionally misrepresented their residency status or exclusive garaging status at the time of initial application or renewal. Payment shall be made by the insurer with respect to accidents for all valid bodily injury and property damage liability claims and all valid uninsured motorist claims by individuals other than the applicant or applicants who made the intentional misrepresentation. However, the insurer shall be legally entitled to reimbursement by the policyholder for all such paid claims.
Source. 2003, 150:1, eff. Jan. 1, 2004. 2021, 147:1, eff. Sept. 21, 2021.
Section 412:10
412:10 Repealed by 2004, 156:8, II, eff. July 23, 2004. –
Section 412:11
412:11 Cancellation Because of Age; Prohibited. –
No insurance company authorized to transact business in this state, which insures against loss by reason of the liability to pay damages to others for damage to property or bodily injury including death, arising from the operation, maintenance, or use of motor vehicles within this state, shall cancel, reduce liability limits, refuse to renew or increase the premium of any such motor vehicle policy for the sole reason that the person to whom such policy has been issued has reached a certain age.
Source. 2003, 150:1, eff. Jan. 1, 2004.
Section 412:12
412:12 Physical Examinations. –
When an insurer requires any person to submit to a physical examination as a prerequisite to issuance or delivery of any motor vehicle liability policy, the insurer shall assume and pay the cost of the physical examination.
Source. 2003, 150:1, eff. Jan. 1, 2004.
Rate Regulation-General Provisions
Section 412:13
412:13 Competitive Market. –
A competitive market is presumed to exist unless the commissioner, after hearing, determines that a reasonable degree of competition does not exist in the market and the commissioner issues a ruling to that effect. Such ruling shall expire no later than 2 years after issue unless the commissioner renews the ruling after hearings and a finding as to the continued lack of a reasonable degree of competition. In determining whether a reasonable degree of competition exists, the commissioner shall consider relevant tests of workable competition pertaining to market structure, market performance and market conduct and the practical opportunities available to consumers in the market to acquire pricing and other consumer information and to compare and obtain insurance from competing insurers as further described in RSA 412:14.
Source. 2003, 150:1, eff. Jan. 1, 2004. 2019, 101:1, eff. Aug. 20, 2019.
Section 412:14
412:14 Monitoring Competition. –
I. In determining whether or not a competitive market exists pursuant to RSA 412:13, the commissioner shall monitor the degree of competition in this state. In doing so, the commissioner shall utilize existing relevant information, analytical systems and other sources; cause or participate in the development of new relevant information, analytical systems and other sources; or rely on some combination thereof. Such activities may be conducted internally within the insurance department, in cooperation with other state insurance departments, through outside contractors or in any other appropriate manner.
II. All of the following may be considered by the commissioner:
(a) The extent to which the largest insurer groups control the insurance marketplace.
(b) Whether the total number of companies writing the form of insurance in this state is sufficient to provide multiple options to the public.
(c) The extent to which insurer entries and exits, considered over several years, suggest the presence or lack of entry or exit barriers or both.
(d) The degree to which the insurance products offered to consumers are homogenous in nature and, thus, comparable.
(e) The availability of insurance coverage in all geographic areas. A review of changes in residual market shares, if applicable, may be used as an indication of availability.
(f) The overall rate level which is not excessive, inadequate, or unfairly discriminatory.
(g) The trend in price level for each type of insurance.
(h) The profitability of each form of insurance over a period of several years.
(i) The level of knowledge of market participants and the extent to which comparative pricing information has been made readily available to consumers.
(j) The extent to which the market for each type of insurance is growing.
(k) The presence of conditions indicating reverse competition.
(l) Any other factors customarily reviewed and considered relevant.
III. For the purpose of carrying out the provisions of this section, the commissioner may, at any time, request information or data from insurers authorized to conduct business in this state that the commissioner believes relevant to monitoring and maintaining a competitive market.
Source. 2003, 150:1. 2005, 248:11. 2006, 196:7, eff. July 30, 2006.
Section 412:15
412:15 Rate Standards. –
Rates shall be made in accordance with the following provisions:
I. Rates shall not be excessive, inadequate, or unfairly discriminatory.
(a) A rate in a competitive market shall not be disapproved for being excessive.
(b) A rate in a noncompetitive market is excessive if it is likely to produce a profit that is unreasonably high for the insurance provided or if expenses are unreasonably high in relation to services rendered.
(c) A rate is inadequate if:
(1) The rate is unreasonably low for the insurance provided and the continued use of the rate endangers the solvency of the insurer using it; or unless
(2) The rate is unreasonably low for the insurance provided and the use of the rate by the insurer has, or if continued will have, the effect of substantially lessening competition or the tendency to create monopoly in any market.
(d) Unfair discrimination exists if, after allowing for practical limitations, price differentials fail to reflect equitably the differences in expected losses and expenses. A rate is not unfairly discriminatory if it is averaged broadly among persons insured under a group, franchise or blanket policy or a mass marketed plan. In this paragraph, amass marketed planmeans a method of selling property-liability insurance wherein:
(1) The insurance is offered to employees of particular employers or to members of particular associations or organizations or to persons grouped in other ways, except groupings formed principally for the purpose of obtaining such insurance; and
(2) The employer, association or other organization, if any, has agreed to, or otherwise affiliated itself with, the sale of such insurance to its employees or members.
II. In determining whether rates comply with the excessiveness standard in a noncompetitive market under subparagraph I(b), the inadequacy standards under subparagraph I(c) and the unfair discrimination standard under subparagraph I(d), the following criteria shall apply:
(a) Due consideration shall be given to past and prospective loss experience within and outside this state; to the conflagration and catastrophe hazards; to a reasonable margin for profit and contingencies; to dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers; to past and prospective expenses both countrywide and those specifically applicable to this state; and to provisions for special assessments and to all other relevant factors within and outside the state.
(b) Risks may be grouped by classifications for the establishment of rates and minimum premiums. Classification rates may be modified to produce rates for individual risks in accordance with rating plans that establish standards for measuring variations in hazards or expense provisions, or both. Such standards may measure any differences among risks that can be demonstrated to have a probable effect upon losses or expenses. No risk classification, however, may be based upon race, creed, national origin or the religion of the insured.
(c) The expense provisions included in the rates to be used by an insurer shall reflect the operating methods of the insurer and its anticipated expenses.
(d) The rates may contain provision for contingencies and an allowance permitting a reasonable profit. In determining the reasonableness of the profit, consideration shall be given to all investment income attributable to the line of insurance.
III. (a) The use of any information from credit reports, credit histories, and credit scoring models for underwriting and rating purposes for homeowners insurance and private passenger automobile insurance shall be based upon objective, documented, and measurable standards and shall be used in a manner which provides for appropriate consumer protections, including adequate and clear consumer notice, procedures to promptly correct and adjust underwriting or rating decisions based on incorrect credit information, and confidentiality protections.
(b) The insurance commissioner shall, pursuant to RSA 541-A, adopt such rules as may be necessary to regulate the obligations of insurers with respect to the use of such information in the underwriting and rating of homeowners insurance and private passenger automobile insurance. Information that explains and justifies underwriting rules, credit scoring models or rating plans that rely upon credit reports, credit histories, or credit scoring mechanisms shall be included in the rate filing required pursuant to RSA 412:16.
IV. For commercial risks, except for workers' compensation which is governed by RSA 412:34, the commissioner may permit insurers to use appropriate systems of schedule rating filed by any insurer or advisory organization approved by the commissioner, subject to rules adopted under RSA 541-A, to assure the uniform and impartial application of such rating. Insurers shall retain supporting documentation for such ratings. Such ratings shall be:
(a) Based on an insured's management, safety, and loss control policies and record;
(b) Based on the policy administration expenses; and
(c) No greater than plus or minus 40 percent of the insurer's base rates.
V. In order to further uniform administration of rate regulatory laws, the commissioner and every insurer, advisory organization and statistical agent may exchange information and experience data with insurance supervisory officials, insurers and advisory organizations in other states and may consult with them with respect to the application of rating systems and the collection of statistical data.
VI. Insurers may charge service fees for unanticipated costs, such as the costs associated with returned checks or late payments. Such fees shall not be in excess of the reasonable administrative cost associated with the service at issue. Installment fees may not be charged for the first payment of each policy term because they are never unanticipated.
VII. For personal lines policies, the general rule is that premium is earned pro-rata over the length of the policy. However, insurers may file other than pro-rata earning patterns if the risk is distributed unevenly over the policy period. If the personal lines policy is canceled with or without cause by either party, all unearned premium at the time of the cancellation shall be returned to the insured.
Source. 2003, 150:1. 2006, 196:8. 2008, 212:5, eff. June 16, 2008. 2016, 115:2, eff. July 19, 2016. 2017, 55:5, 6, eff. Aug. 1, 2017. 2019, 103:1, eff. Aug. 20, 2019. 2021, 50:6, eff. July 24, 2021. 2023, 214:1, eff. Oct. 3, 2023.
Section 412:16
412:16 Rate Filings. –
I. This section shall not apply to:
(a) Financial guaranty.
(b) Employment practices liability.
(c) Commercial inland marine.
(d) Directors and officers liability.
(e) Boiler and machinery.
(f) Commercial credit insurance products.
(g) Surety bonds.
(h) Mortgage guaranty.
(i) Fiduciary liability.
II. Every insurer shall file with the commissioner every manual, predictive model or telematics model or other model that pertains to the formulation of rates and/or premiums, minimum premium, class rate, rating schedule or rating plan and every other rating rule, and every modification of any of the foregoing which it proposes to use. Personal lines filings shall include underwriting rules used by insurers or a group of affiliated insurers to the extent necessary to determine the applicable rate and/or policy premium for an individual insured or applicant. An insurer may file its rates by either filing its final rates or by filing a multiplier and, if applicable, an expense constant adjustment to be applied to prospective loss costs that have been filed by an advisory organization on behalf of the insurer as permitted by RSA 412:23. Every such filing shall state the effective date, and shall indicate the character and extent of the coverage contemplated. Proprietary underwriting rules regarding eligibility and placement of risks, proprietary predictive models in support of proposed rates and/or rating factors, and any other proprietary commercial information that is not necessary for the calculation of a policy premium for an individual insured or applicant are confidential and shall not be subject to the provisions of RSA 91-A. The insurer shall identify the information as confidential in its filing.
III. Every insurer shall file or incorporate by reference to material that has been filed with or approved by the commissioner, at the same time as the filing of the rate, all supplementary rating and supporting information to be used in support of or in conjunction with a rate. The information furnished in support of a filing may include or consist of a reference to:
(a) The experience or judgment of the insurer or information filed by the advisory organization on behalf of the insurer as permitted by RSA 412:23;
(b) Its interpretation of any statistical data it relies upon;
(c) The experience of other insurers or advisory organizations; or
(d) Any other relevant factors.
IV. When a filing is not accompanied by the information upon which the insurer supports such filing, the commissioner may require such insurer to furnish the required information upon which it supports such filing. Until the requested information is provided, the filing shall not be considered complete and may be subject to possible disapproval pursuant to the provisions of RSA 412:19, II.
V. After reviewing an insurer's filing if the commissioner finds that the data upon which the filing is based is fully credible under acceptable actuarial standards and practices, the commissioner may require that the insurer's rates be based upon the insurer's own loss, special assessment and expense information. If the insurer's loss or allocated loss adjustment expenses information is not actuarially credible, as determined by the commissioner, the insurer may use or supplement its experience with information filed with the commissioner by an advisory organization or statistical agent.
VI. Insurers utilizing the services of an advisory organization or statistical agent shall provide with their rate filing, at the request of the commissioner, a description of the rationale for such use, including its own information and method of utilization of the advisory organization's or statistical agent's information.
VII. In a competitive market, every insurer, except as specified in this chapter, shall file with the commissioner the information specified in this section that it will use in this state.
(a) For all personal risk policies, the rates and supplementary rating information shall be filed with the commissioner at least 30 days before the effective date.
(b) For all commercial risk policies, except policies issued to a large commercial policyholder, and except as provided in this chapter, the rates and supplementary rating information that will be used in this state shall be filed for informational purposes only within 30 days of the effective date.
(c) For policies of insurance issued to large commercial policyholders, defined in RSA 412:3, XI, the filing requirements of this section shall not apply. Information relating to classifications, rules, and rates applicable to any policy issued to a large commercial policyholder pursuant to this paragraph shall be kept available by the insurer for inspection by the commissioner, upon request.
(1) All policies issued pursuant to the provisions of this section shall contain a conspicuous disclaimer printed in at least 10-point, bold-faced type that states that the policy applied for, including the rates, rating plans, resulting premiums, and the policy forms, are not subject to the rate and form requirements of this state and other provisions of the insurance law that apply to other commercial products and may contain significant differences from a policy that is subject to all provisions of the insurance law. Such notice shall set forth possible differences in policy conditions, forms, and endorsements, as compared to a policy that is subject to all of the provisions of the insurance law. The commissioner may prescribe the format and provisions of such notice. The disclosure notice will also include a policyholder's acknowledgment statement, to be signed and dated prior to the effective date of the coverage, and shall remain on file with the insurer.
(2) In procuring insurance, a large commercial policyholder shall certify that it meets the eligibility requirements set out in RSA 412:3, XI and specify the requirements that the policyholder has met. This certification is to be completed annually and remain on file with the insurer.
(3) A surplus lines broker seeking to obtain or provide insurance for a large commercial policyholder is not authorized to purchase insurance from any eligible unauthorized insurer without making a diligent search of authorized insurers as required by RSA 405:24.
(d) In a competitive market, if the commissioner finds, after a hearing that an insurer's rates require closer supervision because of the insurer's financial condition or unfairly discriminatory rating practices, the insurer shall file with the commissioner at least 30 days before the effective date, all such rates and supplementary rating information and supporting information as prescribed by the commissioner. Upon application by the filer, the commissioner may authorize an earlier effective date.
VIII. In a noncompetitive market, subject to the exceptions specified in RSA 412:16, IX and X, and RSA 412:28, each filing shall be on file for a waiting period of 30 days before it becomes effective, which period may be extended by the commissioner for an additional period not to exceed 60 days if written notice is given within such waiting period to the insurer or advisory organization which made the filing that additional time is needed for the consideration of the filing. Upon written application by the insurer, the commissioner may authorize a filing that has been reviewed to become effective before the expiration of the waiting period or any extension thereof. A filing shall be deemed to meet the requirements of this chapter unless disapproved by the commissioner within the waiting period or any extension thereof. Failure of the insurer or advisory organization to provide the requested information within the waiting period or the extension thereof shall be deemed a request to withdraw the filing from further consideration. Failure of the commissioner to act within the waiting period or the extension thereof shall result in the filing being deemed to meet the requirements of this chapter. Neither the insurer nor the commissioner may waive the timeliness requirements of the provisions in this section.
IX. The commissioner may, by written order, suspend or modify the requirement of filing as to any kind of insurance, subdivision or combination thereof, or as to classes of risks, for which the rates cannot practicably be filed before they are used. The commissioner may make such examination as deemed advisable to ascertain whether any rates affected by such order meet the standards set forth in RSA 412:15.
X. Upon the written application of the insured, stating his or her reasons therefor, filed with and approved by the commissioner, a rate in excess of or below that provided by a filing otherwise applicable may be used on any specific risk.
XI. A filing and any supporting information not considered proprietary pursuant to paragraph II shall be open to public inspection on or after the effective date.
XII. No insurer shall make or issue a contract or policy except in accordance with the filings that are in effect for the insurer as provided in this chapter.
XIII. A rate for a residual market in which insurers are mandated by law to participate shall not become effective until approved by the commissioner.
Source. 2003, 150:1. 2004, 156:4. 2008, 212:6, eff. June 16, 2008. 2016, 115:3-5, eff. July 19, 2016. 2017, 55:7, 8, eff. Aug. 1, 2017. 2019, 10:3, eff. July 9, 2019; 101:2, eff. Aug. 20, 2019. 2022, 42:6, eff. July 2, 2022. 2023, 214:2, eff. Oct. 3, 2023.
Rate Regulation-Motor Vehicle Insurance
Section 412:17
412:17 Cancellation Because of Age; Prohibited. –
No insurance company authorized to transact business in this state, which insures against loss by reason of the liability to pay damages to others for damage to property or bodily injury including death, arising from the operation, maintenance, or use of motor vehicles within this state, shall cancel, reduce liability limits, refuse to renew, or increase the premium of any such motor vehicle policy for the sole reason that the person to whom such policy has been issued has reached a certain age. The provisions of this section shall not apply to an increase or decrease of the premiums for such policies for any particular age group if a statewide classification system approved by the insurance commissioner is adopted for such drivers.
Source. 2003, 150:1, eff. Jan. 1, 2004.
Section 412:17-a
412:17-a Volunteer Drivers. –
An insurer may not refuse to issue a policy of automobile insurance, as defined in RSA 417-A, to an applicant solely because the applicant is a volunteer driver. An insurer may not impose a surcharge or otherwise increase the rate for a policy of automobile insurance solely on the basis that the named insured, a member of the insured's household, or a person who customarily operates the insured's vehicle is a volunteer driver. For purposes of this section, "volunteer driver" means a person who provides services, including transporting individuals or goods, without compensation above expenses to a charitable organization as defined in RSA 7:21. This section does not prohibit an insurer from refusing to renew, imposing a surcharge, or otherwise raising the rate for a policy of automobile insurance based upon factors other than the volunteer status of the insured driver.
Source. 2007, 351:1, eff. Jan. 1, 2008.
Section 412:18
412:18 Repealed by 2021, 147:3, I, eff. Sept. 21, 2021. –
Rate Regulation-Disapprovals, General Provisions
Section 412:19
412:19 Disapproval of Filings. –
I. For filings made in a noncompetitive market and residual market filings, if within the waiting period or any extension thereof as provided in RSA 412:16, VIII, the commissioner finds that a filing does not meet the requirements of this chapter, written notice of disapproval shall be sent to the insurer or advisory organization which made the filing, specifying therein in what respects the filing fails to meet the requirements of this chapter and stating that such filing shall not become effective. If the commissioner disapproves a filing, the insurer or advisory organization may request a hearing on the disapproval within 30 days and the commissioner shall schedule that hearing within 30 days of the receipt of the request. The insurer or advisory organization bears the burden of proving compliance with the standards established by this chapter.
II. If at any time after a rate has been approved and for filings made in a competitive market, the commissioner finds that the rate no longer meets the requirements of this chapter, the commissioner may order the discontinuance of use of the rate. The order of discontinuance may be issued after a hearing with at least 10 days' prior notice to all insurers affected by the order. The order must be in writing and state the grounds for the order. It shall also state when, within a reasonable time thereafter, the filing will be deemed no longer effective. The order shall not affect any contract or policy made or issued prior to the expiration of the period set forth in the order. However, a policyholder shall have the privilege to cancel the policy containing the disapproved rate without penalty. The commissioner's order may include a provision for a premium adjustment for contracts or policies made or issued after the effective date of the order.
III. Any insured aggrieved with respect to any filing which is in effect may make written application to the commissioner for a hearing thereon. The application shall specify the grounds to be relied upon by the applicant. If the commissioner shall find that the application is made in good faith, that the applicant would be so aggrieved if his or her grounds are established, and that such grounds otherwise justify holding such a hearing, a hearing shall be held within 30 days after receipt of such application upon not less than 10 days' written notice to the applicant and to every insurer and advisory organization which made such filing.
IV. If, after such hearing, the commissioner finds that the filing does not meet the requirements of this chapter, an order shall be issued specifying in what respects such filing fails to meet the requirements of this chapter, and stating when, within a reasonable period thereafter, such filing shall no longer be deemed to be in effect. Copies of the order shall be sent to the applicant and to every such insurer and advisory organization. The order shall not affect any contract or policy made or issued prior to the expiration of the period set forth in the order.
V. Whenever an insurer has no legally effective rates as a result of the commissioner's disapproval of rates or other act, the commissioner shall on request of the insurer specify interim rates for the insurer that are high enough to protect the interests of all parties and may order that a specified portion of the premiums be placed in an escrow account approved by the commissioner. When the new rates become legally effective, the commissioner shall order the escrowed funds or any overcharge in the interim rates be distributed appropriately.
Source. 2003, 150:1, eff. Jan. 1, 2004.
Additional Provisions Applicable to Advisory Organizations and Statistical Agents; Joint Underwriting, Joint Reinsurance Pool; Assigned Risk and Residual Market Activities
Section 412:20
412:20 Licensing Advisory Organizations and Statistical Agents. –
I. No advisory organization or statistical agent shall provide any service relating to statistical collection or the rates of any insurance subject to this chapter, and no insurer shall utilize the services of such organization for such purposes unless the organization has obtained a license under paragraph III.
II. No advisory organization or statistical agent shall refuse to supply any services for which it is licensed in this state to any insurer authorized to do business in this state and offering to pay the fair and usual compensation for the services.
III. (a) An advisory organization or statistical agent applying for a license shall include with its application:
(1) A copy of its constitution, charter, articles of organization, agreement, association or incorporation, and a copy of its bylaws, plan of operation and any other rules or regulation governing the conduct of its business.
(2) A list of its members and subscribers.
(3) The name and address of one or more residents of this state upon whom notices, process affecting it, or orders of the commissioner may be served.
(4) A statement showing its technical qualifications for acting in the capacity for which it seeks a license.
(5) A biography of the ownership and management of the organization.
(6) Any other relevant information and documents that the commissioner may require.
(b) Every organization that has applied for a license shall notify the commissioner of every material change in the facts or in the documents on which its application was based. Any amendment to a document filed under this section shall be filed at least 30 days before it becomes effective.
(c) If the commissioner finds that the application and the natural persons through whom it acts are competent, trustworthy, and technically qualified to provide the services proposed, and that all requirements of the law are met; he or she shall issue a license specifying the authorized activity of the applicant. The commissioner shall not issue a license if the proposed activity would tend to create a monopoly or to substantially lessen the competition in any market.
(d) Licenses issued pursuant to this section shall remain in effect for one year unless the license is suspended or revoked. The commissioner may at any time, after hearing, revoke or suspend the license or issue a written order requiring the discontinuance of an act or practice of an advisory organization or statistical agent that is involved with such act or practice that is unfair or unreasonable or does not otherwise comply with the requirements and standards of this chapter.
(e) Advisory organizations wishing to operate as statistical agents within this state may be so authorized under their license as an advisory organization. A separate license is not required.
(f) The fee for said application and license shall be as specified in RSA 400-A:29, VI.
Source. 2003, 150:1, eff. Jan. 1, 2004. 2023, 214:3, eff. Oct. 3, 2023.
Section 412:21
412:21 Insurers and Advisory Organizations: Prohibited Activity. –
I. No insurer or advisory organization shall:
(a) Attempt to monopolize, or combine or conspire with any other person to monopolize an insurance market.
(b) Engage in a boycott, on a concerted basis, of an insurance market.
II. No insurer shall agree with any other insurer or with an advisory organization to mandate adherence to or to mandate use of any rate, prospective loss cost, rating plan, rating schedule, rating rule, policy or bond form, rate classification, rate territory, underwriting rule, survey, inspection or similar material, except as needed to facilitate the reporting of statistics to advisory organizations, statistical agents or the commissioner.
III. The fact that 2 or more insurers, whether or not members or subscribers of an advisory organization, use consistently or intermittently the same rates, prospective loss cost, rating plans, rating schedules, rating rules, policy or bond forms, rate classifications, rate territories, underwriting rules, surveys or inspections or similar materials is not sufficient in itself to support a finding that an agreement exists.
IV. Two or more insurers having a common ownership or operating in this state under common management or control may act in concert between or among themselves with respect to any matters pertaining to those activities authorized in this chapter as if they constituted a single insurer.
V. No insurer or advisory organization shall make any arrangement with any other insurer, advisory organization, or other person which has the purpose or effect of unreasonably restraining trade or unreasonably lessening competition in the business of insurance.
Source. 2003, 150:1, eff. Jan. 1, 2004.
Section 412:22
412:22 Advisory Organizations and Statistical Agents; Prohibited Activity. –
In addition to the other prohibitions contained in this chapter, except as specifically permitted under RSA 412:23 and RSA 412:24, no advisory organization or statistical agent shall compile or distribute recommendations relating to rates that include expenses, other than loss adjustment expenses, or profit.
Source. 2003, 150:1, eff. Jan. 1, 2004.
Section 412:23
412:23 Advisory Organizations; Permitted Activity. –
An advisory organization in addition to other activities not prohibited, is authorized, on behalf of its members and subscribers, to:
I. Develop statistical plans including territorial and class definitions.
II. Collect statistical data from members, subscribers or any other source.
III. Prepare, file and distribute prospective loss costs which may include provisions for special assessments.
IV. Prepare, file and distribute factors, calculations or formulas pertaining to classification, territory, increased limits and other variables.
V. Prepare, file and distribute manuals of rating rules, rating schedules and other supplementary rating information that do not include final rates, expense provisions, profit provisions or minimum premiums.
VI. Distribute information that is required or directed to be filed with the commissioner.
VII. Conduct research and on-site inspections in order to prepare classifications of public fire defenses.
VIII. Consult with public officials regarding public fire protection as it would affect members, subscribers and others.
IX. Conduct research in order to discover, identify and classify information relating to causes or prevention of losses.
X. Conduct research relating to the impact of statutory changes upon prospective loss costs and special assessments.
XI. Prepare, file and distribute policy forms and endorsements and consult with members, subscribers and others relative to their use and application.
XII. Conduct research and on-site inspections for the purpose of providing risk information relating to individual structures.
XIII. Conduct on-site inspection to determine rating classification for individual insureds.
XIV. Collect, compile and publish past and current prices of individual insurers, provided such information is also made available to the general public at a reasonable cost.
XV. Collect and compile exposure and loss experience for the purpose of individual risk experience ratings.
XVI. File final rates, at the direction of the commissioner, for residual market mechanisms.
XVII. Furnish any other services, as approved or directed by the commissioner, related to those enumerated in this section.
Source. 2003, 150:1, eff. Jan. 1, 2004.
Section 412:24
412:24 Statistical Agents; Permitted Activity. –
In addition to other activities not prohibited, any statistical agent is authorized, on behalf of its members and subscribers, to:
I. Develop statistical plans including territorial and class definitions.
II. Collect statistical data from members, subscribers or any other source.
III. Distribute information that is required or directed to be filed with the commissioner.
IV. Collect, compile and distribute past and current prices of individual insurers and publish such information.
V. Collect and compile exposure and loss experience for the purpose of individual risk experience ratings.
VI. Furnish any other services, as approved or directed by the commissioner, related to those enumerated in this section.
Source. 2003, 150:1, eff. Jan. 1, 2004.
Section 412:25
412:25 Advisory Organizations; Filing Requirements. –
Every advisory organization shall file with the commissioner before the effective date every statistical plan, all prospective loss costs, provisions for special assessments and all supplementary rating information and every change or amendment or modification of any of the foregoing proposed for use in this state. Such filings shall be subject to the provisions of RSA 400-A:29, VI(d) and (e), RSA 412:16, and RSA 412:19 and other provisions of this chapter relating to filings made by insurers.
Source. 2003, 150:1, eff. Jan. 1, 2004. 2017, 133:2, eff. Aug. 15, 2017.
Section 412:26
412:26 Joint Underwriting; Joint Reinsurance Pool; Assigned Risk and Residual Market Activities. –
I. Notwithstanding RSA 412:21, II and III, insurers participating in joint underwriting, joint reinsurance pools, assigned risk or residual market mechanisms may in connection with such activity act in cooperation with each other in the making of rates, rating systems, policy forms, underwriting rules, surveys, inspections and investigations, the furnishing of loss and expense statistics or other information, or carrying on research. Agreements may be made among insurers with respect to the equitable apportionment among them of insurance that may be afforded applicants who are in good faith entitled to, but who are unable to procure such insurance through ordinary methods.
II. Every joint underwriting association, joint reinsurance pool, assigned risk or residual market shall file with the commissioner for approval every statistical plan, all prospective loss costs, provisions for special assessments and all supplementary rating information and every change or amendment or modification of any of the foregoing proposed for use in this state. Such filings shall not take effect until the commissioner shall approve the same as just and reasonable and adequate for the risks to which they respectively apply and shall otherwise be subject to the provisions of RSA 412:16 and RSA 412:19 and other provisions of this chapter relating to filings made by insurers.
III. Except to the extent modified by this section, insurers, joint underwriting, joint reinsurance pool, and residual market mechanism activities are subject to the other provisions of this chapter.
IV. If, after hearing, the commissioner finds that any activity or practice of an insurer participating in joint underwriting or a pool is unfair, is unreasonable, will tend to lessen competition in any market or is otherwise inconsistent with the provisions or purposes of this chapter, the commissioner may issue a written order and require the discontinuance of such activity or practice.
V. Every pool shall file with the commissioner a copy of its constitution; its articles of incorporation, agreement or association; its bylaws, rules and regulations governing its activities; its members; the name and address of a resident of this state upon whom notices or orders of the commissioner or process may be served; and any changes in amendments or changes in the foregoing.
VI. (a) Any residual market mechanism, plan, or agreement to implement such a mechanism, and any changes or amendments thereto, shall be submitted in writing to the commissioner for consideration and approval, together with such information as may be reasonably required. The commissioner shall approve only such agreements as are found to contemplate:
(1) The use of rates which meet the standards prescribed by this chapter; and
(2) Activities and practices that are not unfair, unreasonable, or otherwise inconsistent with the provisions of this chapter.
(b) At any time after such agreements are in effect, the commissioner may review the practices and activities of the adherents to such agreements and if, after a hearing, the commissioner finds that any such practice or activity is unfair or unreasonable, or is otherwise inconsistent with the provisions of this chapter, the commissioner may issue a written order to the parties and either require the discontinuance of such acts or revoke approval of any such agreement.
Source. 2003, 150:1, eff. Jan. 1, 2004.
Section 412:27
412:27 Information to be Furnished Insureds; Hearings and Appeals of Insureds. –
I. Every advisory organization and every insurer shall, within a reasonable time after receiving written request therefor and upon payment of such reasonable charge as it may make, furnish to any insured affected by a rate made by the insurer, or to the authorized representative of the insured, all pertinent information as to such rate. If the advisory organization or insurer fails to grant or reject such request within 30 days after it is made, the applicant or insurer may request a hearing from the department pursuant to RSA 400-A:17.
II. If, after a hearing held under this section, it is determined that the rates charged by an insurer are in excess of the otherwise appropriate rate, such overcharge shall be refunded to the insured.
Source. 2003, 150:1, eff. Jan. 1, 2004.
Forms and Rate Regulation Applicable to Workers' Compensation
Section 412:28
412:28 Filing and Approval of Rates and Rating Plans. –
I. Every insurer, that insures employers against liability for compensation under the workers' compensation law, RSA 281-A, shall file with the insurance commissioner individually or in collaboration with others, in such form as the commissioner may prescribe every manual, minimum premium, class rate, rating schedule, or rating plan and every other rating rule, and every modification of any of the foregoing that it proposes to use; provided, that none of the above shall take effect until the commissioner shall have approved the same as adequate, not excessive, and not unfairly discriminatory.
II. An insurer shall file its rates by filing a multiplier, and, if applicable, other modifications to the prospective loss costs and rating plan filed by the National Council on Compensation Insurance or other authorized advisory organization on behalf of the insurer as permitted by RSA 412:23.
III. At the same time as a filing made pursuant to paragraphs I and II, every insurer shall file, or incorporate by reference any material that has been filed with and approved by the commissioner, all supplementary statistical and supporting information to be used as justification for this filing.
IV. The commissioner may evaluate systems of administered pricing versus competitive rating and the costs and benefits of applying such systems to regulating the classification of risks and premium rates for workers' compensation insurance in New Hampshire. The commissioner may provide an evaluation to the workers' compensation advisory council established by RSA 281-A:62.
V. A filing and any supporting information not considered proprietary pursuant to RSA 412:16, II shall be open to public inspection upon approval.
Source. 2003, 150:1. 2005, 248:12, eff. Sept. 12, 2005. 2019, 50:1, eff. Aug. 4, 2019.
Section 412:29
412:29 Withdrawal of Approval. –
The commissioner may withdraw approval of any premium, rate, rating manual, or schedule filed by any insurer according to RSA 412:28, if, in the commissioner's judgment, such rate filing no longer results in premiums that are adequate, not excessive, or not unfairly discriminatory.
Source. 2003, 150:1. 2005, 248:12, eff. Sept. 12, 2005.
Section 412:30
412:30 Special Notice Required. –
Any insured receiving a premium quote from an insurer, based on an approved rating plan, as described in RSA 412:28, that is higher than the premium that would be derived from the rates and rating plan approved for the assigned risk plan, shall be made aware by the insurer, in writing, that coverage may be obtained at a lower premium in the assigned risk plan.
Source. 2003, 150:1. 2005, 248:13, eff. Sept. 12, 2005.
Section 412:31
412:31 Workers' Compensation Insurance Rate. –
All insurance carriers authorized to write workers' compensation insurance shall make available, at the written request of the employer, a workers' compensation insurance rate containing a deductible provision which shall bind the employer to pay, at a minimum, 100 percent of the first $500 of benefits due to an employee, whether these benefits be medical benefits or indemnity benefits. The commissioner shall approve rates that include larger medical and indemnity deductibles on benefits greater than $500. The commissioner shall prescribe the maximum medical and indemnity deductibles. Employers who choose to acquire workers' compensation insurance with a deductible provision, as to the amount of the deductible, are considered insurers and shall have the same responsibilities under the applicable sections of RSA 281-A.
Source. 2003, 150:1, eff. Jan. 1, 2004.
Section 412:32
412:32 Extraterritorial Auditing Procedure. –
I. In this section:
(a) "Business headquarters" or "headquarters" means the state in which the business resides, as evidenced by filing of federal income taxes.
(b) "Extraterritorial" means the movement of employees and exposures across state lines.
(c) "Terminal" or "base of operations" means a permanent location owned, leased or used by a trucker at which loading, unloading and other related nonclerical work functions, such as maintenance and transfers, are performed and from which the driver/employee physically reports to work on a regular basis.
(d) "Trucker" means a person or entity engaged in the business of transporting property by motor vehicle for hire.
(e) "State of residence" means the state in which the trucker resides as evidenced by the location used for filing of federal income taxes.
II. All insurers authorized to write workers' compensation coverage in this state, including premium auditors and underwriters, shall use the following extraterritorial rules in the determination of premium for risks with extraterritorial employments, as well as in calculating estimated and final premium to be charged employers.
III. For employers with employees, specifically salesmen, sales engineers, servicemen, supervisors, executives and administrative employees, who move from state to state in the performance of their jobs the following shall apply:
(a) The payroll for an employee who resides in the same state as the headquarters from which the employee travels shall be assigned to such employee's headquarters state.
(b) The payroll for an employee who resides in a state different from that in which the employee's headquarters is located, but nevertheless travels from such headquarters, shall be assigned to the headquarters state.
(c) The payroll for an employee who resides in a state in which no headquarters is located, and who conducts business from home for an out-of-state employer, shall be assigned to the employee's state of domicile or residence.
IV. For employers involved in interstate trucking operations the following shall apply:
(a) The payroll for employees shall be assigned to the state in which the base terminal or base of operations from which they load, unload, store, or transfer freight on a regular basis is located.
(b) The payroll for employees who do not operate from a terminal or base of operations shall be assigned in the following manner:
(1) Employee records reflecting significant single state operations shall be assigned to that state.
(2) Employee records reflecting multi-state operations shall be assigned to the employee's state of residence or domicile.
V. For employers involved in construction, erection, installation and similar contracting operations the following shall apply:
(a) The payroll for employees assigned to a job of 2 days or less duration in a state, other than that of the business headquarters, shall be assigned to the state where the headquarters is located.
(b) The payroll for employees assigned to a job of 3 days or longer duration in a state, other than that of the business headquarters, shall be assigned to the state where the job is located.
(c) The payroll for employees assigned to general oversight of an out-of-state job, and not responsible for direct daily supervision, shall be assigned to the state where the headquarters is located.
(d) The payroll for employees hired for a specific job project shall be assigned to the state in which the job is located.
Source. 2003, 150:1, eff. Jan. 1, 2004.
Section 412:33
412:33 Premium and Loss Information. –
All insurance companies writing workers' compensation coverage for risks located in the state of New Hampshire shall provide to each policyholder, on at least an annual basis, premium and loss information relative to the risk's workers' compensation experience. Such information shall include loss and claim specific information itemizing: name of claimant, claim number, date of loss, amounts paid and amounts in reserve with a notation indicating whether the claim is open or closed.
Source. 2003, 150:1, eff. Jan. 1, 2004.
Section 412:34
412:34 Schedule Rating. –
The commissioner may permit insurers to use appropriate systems of schedule rating filed by any insurer or advisory organization approved by the commissioner, subject to rules adopted under RSA 541-A, to assure the uniform and impartial application of such rating. Such ratings shall be:
I. Based on an employer's safety policies and record, including its policies with regard to injured workers' return to work;
II. No greater than plus or minus 25 percent of the insurer's base rates;
III. Voluntary on the part of both the insurer and the employer; and
IV. Applicable to an annual premium greater than $1,000.
Source. 2003, 150:1, eff. Jan. 1, 2004. 2023, 214:4, eff. Oct. 3, 2023.
Section 412:35
412:35 Auditable Basis Policies. –
I. All workers' compensation policies issued in this state shall be issued on an auditable basis. A final premium shall be charged based upon actual exposure existing during the term of the policy coverage.
II. Audits shall be conducted by either physical inspection of an insured's records and operations, or by telephone or mail request by the insurer to the insured.
III. Audits shall be completed promptly, no more than 120 days after the expiration or cancellation of the policy, provided that there is no bona fide dispute. Any insurer that violates the provisions of this paragraph shall be subject to the penalty provisions of RSA 412:40.
IV. (a) In cases where there is a bona fide dispute, the insurer shall notify the insured in writing that there is a bona fide dispute and this notice shall toll the 120-day time period until the dispute is resolved. Upon resolution of the dispute, the insurer shall proceed to complete the audit within the time remaining in the 120-day time period. A bona fide dispute includes the insured's failure to cooperate with the audit, provided the insurer has notified the insured of:
(1) The acts or omissions that constitute the insured's failure to cooperate; and
(2) The consequences of the insured's failure to cooperate, including delay in the completion of the audit.
(b) The consequence of the insured's failure to cooperate with this paragraph within 30 days of the notice shall be the assessment of a penalty equaling 3 times the estimated premium and setting the estimated premium as the final premium. Upon receipt of the penalty and final premium, the insured shall have an additional 10 days to request that the penalty be waived and to have the final premium be recalculated based upon actual exposure by completing the audit that is required by paragraph III. No timely request by an insured for a waiver and recalculation shall be denied by the insurer. The request shall be granted upon completion of the audit.
V. Gross unearned premium shall be returned pursuant to RSA 402:81.
Source. 2003, 150:1. 2008, 211:1. 2014, 31:9, eff. July 26, 2014. 2020, 37:119, eff. Sept. 27, 2020.
Section 412:36
412:36 Part of Contract. –
The adjusted rate arrived at by any reduction or increase from the basic rate filed with and approved by the commissioner, in the application of such system of schedule or merit rating, shall be clearly set forth in the insurance contract or in the endorsement attached thereto.
Source. 2003, 150:1, eff. Jan. 1, 2004.
Section 412:37
412:37 Repealed by 2004, 156:8, III, eff. July 23, 2004. –
Section 412:37-a
412:37-a Certificates of Insurance. –
Every certificate of insurance issued or presented in this state pursuant to a workers' compensation insurance policy shall contain the following information:
I. All states for which such statutory coverage is provided;
II. Names of all executive officers or members who are excluded, if any, pursuant to RSA 281-A:18-a, or a notation that no executive officers or members are excluded; and
III. Names of all sole proprietors or partners who have elected to be covered under the policy or a notation that no sole proprietors or partners are covered.
Source. 2008, 378:4, eff. Jan. 1, 2009.
Section 412:37-b
412:37-b Advisory Organizations; Required Activity. –
The commissioner shall consult with workers' compensation advisory organizations, workers' compensation carriers, and third party administrators or self-insureds regarding the most effective options for including workers' compensation medical claims data in the New Hampshire comprehensive health information system, as defined under RSA 420-G:11-a. The commissioner shall make a report with recommendations on options for including workers' compensation medical claims data in the New Hampshire comprehensive health information system on or before December 1, 2015 to the speaker of the house of representatives, the president of the senate, the governor, and the chairpersons of the house and senate committees having jurisdiction over health and human services.
Source. 2015, 210:2, eff. Sept. 4, 2015.
Miscellaneous Applicable Provisions, Penalty, Rehearing and Appeal Provisions
Section 412:38
412:38 Examinations. –
I. The commissioner may, as often as he or she deems it expedient, make or cause to be made an examination of each advisory organization or statistical agent referred to in RSA 412:20 and of each group, association or other organization referred to in RSA 412:26, provided that each statistical agent and advisory organization licensed in this state shall be examined at least once every 5 years. The reasonable costs of any such examination shall be paid by the advisory organization, statistical agent or group, association or other organization examined. The officers, manager, agents and employees of such advisory organization, statistical agent, or group, association or other organization may be examined at any time under oath and shall exhibit all books, records, account, documents or agreements governing its method of operation. In lieu of any such examination, the commissioner may accept the report of an examination made by the insurance supervisory official of another state, pursuant to the laws of that state.
II. As often as the commissioner deems necessary, the commissioner or a delegate may examine all policies, daily reports, binders, renewal certificates, endorsements, and other evidences of insurance or of the cancellation thereof, for the purpose of ascertaining that lawful rates are being charged. In connection therewith the commissioner may require the company or any officer or agent to produce all books and papers relating to the formulation or change of such rates in the possession of the company or agent and shall have power to examine under oath any officer or agent of said company on matters pertinent to the formulation or changing of such rates. The expense of an examination undertaken pursuant to authority hereby conferred shall be borne by the company examined.
Source. 2003, 150:1, eff. Jan. 1, 2004.
Section 412:39
412:39 False or Misleading Information. –
No person or organization shall willfully withhold information that will affect the rates or premiums chargeable under this chapter from, or knowingly give false or misleading information to the commissioner, any statistical agent, any advisory organization or any insurer. A person or organization violating this section shall be subject to the penalties provided in RSA 412:40.
Source. 2003, 150:1, eff. Jan. 1, 2004.
Section 412:40
412:40 Penalties. –
I. The commissioner, may upon a finding that any person or organization has violated any provisions of this chapter, impose a penalty of not less than $500 or more than $10,000 for each violation, but if the violation is found to be willful, a penalty of not less than $1,000 or more than $25,000 may be imposed for each violation. Separate penalties may be in addition to any other penalty provided by law.
II. For purposes of this chapter, any insurer using a rate for which the insurer has failed to file the rate, supplementary rate information, underwriting rules or guidelines, or supporting information as required by this chapter, shall have committed a separate violation for each day such failure continues.
III. The commissioner may suspend or revoke the license of any advisory organization, statistical agent or insurer that fails to comply with an order of the commissioner within the time limited by such order, or any extension thereof which the commissioner may grant.
IV. The commissioner may determine when a suspension of license shall become effective and it shall remain in effect for the period fixed by the commissioner, unless the commissioner modifies or rescinds such suspension, or until the order upon which such suspension is based is modified, rescinded or reversed.
V. No penalty shall be imposed and no license shall be suspended or revoked except upon a written order of the commissioner stating his or her findings, made after hearing.
Source. 2003, 150:1, eff. Jan. 1, 2004.
Section 412:41
412:41 Hearing and Appeal. –
Any insurer or organization aggrieved by any order or decision of the commissioner shall be entitled to a hearing and appeal in accordance with the provisions of RSA 541-A.
Source. 2003, 150:1, eff. Jan. 1, 2004.
Section 412:42
412:42 Exemptions. –
The commissioner may by his or her own initiative or upon request of any person, by rule exempt any market from any or all of the provisions of this chapter, if and to the extent that the exemption is necessary to achieve the purposes of this chapter.
Source. 2003, 150:1, eff. Jan. 1, 2004.
Section 412:43
412:43 Rulemaking Authority. –
I. The commissioner may make reasonable rules as necessary to effect the purposes of this chapter.
II. The commissioner shall adopt rules, under RSA 541-A, relative to defining "resident" for the purposes of this chapter and RSA 417-A. Such definition shall include any criteria necessary for determining residency in this state, including the residency of persons on active duty in the military service of the United States, retired persons, and other persons temporarily out of this state.
III. [Repealed.]
Source. 2003, 150:1. 2011, 137:2. 2012, 100:9, eff. July 28, 2012.
Section 412:44
412:44 Severability. –
If any provision of this chapter or the application thereof to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the chapter which can be given effect without the invalid provision or application; and, to this end, the provisions of this chapter are severable.
Source. 2003, 150:1, eff. Jan. 1, 2004.