WAC 284-24-070   Modification of filing requirements -- Refer-to-company rating.  (1) Under RCW 48.19.080, the insurance rate filing requirements in chapter 48.19 RCW are modified as to classes of policies for which the insurer has no rate, guide rate, range of rates or rating rule except as described in subsection (2) of this section. These classes may include:

     (a) A class in which risks are so different from each other that no rate or range of rates could be representative of all;

     (b) A class that does not develop enough loss experience to warrant any credibility for ratemaking purposes; and

     (c) Policies involving a new product or coverage for which there is no appropriate analogy to similar exposures for ratemaking purposes.

     (2) Every rating rule for such classes of policies shall be included in an appropriate rate manual and filed with the commissioner. Such a rating rule shall consist only of a notation of the symbol "(a)" or a statement that risks in the class shall be submitted to the insurer for rating.

     (3) The insurer's rating of a refer-to-company risk shall be based on a documented underwriting analysis of:

     (a) Specific definable loss potential characteristics,

     (b) Analogy to similar exposures, and

     (c) Available loss frequency and severity data.

     (4) Examples of appropriate refer-to-company risks include but are not limited to:

     (a) Manufacturing and construction risks, such as:

     (i) Ammunition manufacturing,

     (ii) Dam construction,

     (iii) Irrigation works operation, and

     (iv) Logging railroad -- operation and maintenance.

     (b) Owners, landlord and tenants risks, such as:

     (i) Amusement devices, designed for small children only, not otherwise classified (NOC),

     (ii) Christmas tree lots -- open air,

     (iii) Bleachers or grandstands,

     (iv) Dude ranches,

     (v) Firing ranges -- indoor,

     (vi) Parks or playgrounds, and

     (vii) Zoos.

     (c) Product risks, such as:

     (i) Aircraft or aircraft parts manufacturing,

     (ii) Ball or roller bearing manufacturing,

     (iii) Chemical manufacturing -- household -- NOC,

     (iv) Discontinued operations -- products,

     (v) Electronic component manufacturing,

     (vi) Firearms manufacturing -- over .50 caliber

     (vii) Instrument manufacturing -- NOC,

     (viii) Levee construction,

     (ix) Machinery or machinery parts manufacturing,

     (x) Pharmaceutical or surgical goods manufacturing,

     (xi) Products -- NOC,

     (xii) Sign manufacturing -- NOC,

     (xiii) Tank manufacturing -- metal -- not pressurized,

     (xiv) Textile coating or impregnating,

     (xv) Tool manufacturing -- hand type -- powered,

     (xvi) Valves manufacturing,

     (xvii) Wheels manufacturing,

     (xviii) Wire goods manufacturing -- NOC, and

     (xix) Wood products manufacturing -- NOC.

     (5) Insurers writing risks subject to this regulation shall maintain separate documentation, including loss experience, on each risk written and shall be prepared to provide such documentation to the insurance commissioner upon request.



[Statutory Authority: RCW 48.02.060, 48.19.080, 48.19.370 and 48.19.020. 98-20-102 (Matter No. R 98-4), § 284-24-070, filed 10/7/98, effective 11/7/98. Statutory Authority: RCW 48.02.060. 82-06-036 (Order R 82-1), § 284-24-070, filed 3/1/82.]