NOTICE OF TENTATIVE CREDIT PROPERTY INSURANCE RATES
Regulation 69-11.1, Regulation of Credit Insurance, requires the South Carolina Department of Insurance to promulgate tentative rates for credit property insurance by August 1 of each year. The tentative rates are those the Department believes may reasonably be expected to produce a loss ratio of not less than fifty percent (50%) in the following calendar year. This bulletin constitutes official notice of the tentative rates for 2021.
The Department has reviewed past loss experience for credit property insurance written in conjunction with consumer credit transactions subject to the Consumer Finance Law. The aggregate 2019 loss ratio at prima facie rates is twenty-one and six tenths percent (21.6%). The aggregate 2018 loss ratio at prima facie rates is twenty nine and two tenths percent (29.2%). The aggregate 2017 loss ratio at prima facie rates is twenty-six and nine tenths percent (26.9%). It appears that previous rate decreases have begun to increase the aggregate loss ratio. Since there is a statutory minimum premium of $3, we will continue to monitor the results to be assured that further reductions in rates will effectively increase the aggregate loss ratio.
The average loss ratios from 2007 to 2019 by coverage are as follows:
Automobile, Fire and Theft- Single Interest Automobile Collision - Single Interest Household Goods - Single Interest Household Goods - Dual Interest
We propose to hold the rate for Household Goods - Single Interest coverage at the 2020 level and to decrease the other rates ten percent from their current levels. The tentative rates expressed as a percentage of the total amount of the loan are as follows:
Governor Henry McMaster Director Raymond G. Farmer
Automobile, Fire and Theft - Single Interest Automobile Collision - Single Interest Household Goods - Single Interest Household Goods - Dual Interest
Based on premiums earned in 2019, the overall impact resulting from these tentative rates would be a decrease of nine and six tenths percent (-9.6%).
OPPORTUNITY FOR A HEARING
- Regulation 69-11.1.C.( 4) provides that "every insurer which feels aggrieved by any of the rates so promulgated shall have fifteen days to request a public hearing with respect to such rate or rates." Accordingly, all requests for a hearing must be submitted to the Department in writing on or before August 15, 2020. Please direct any requests for a hearing to the attention of:
South Carolina Department of Insurance Post Office Box I00 I 05
Columbia, South Carolina 29202-3105
All requests must include documentation supporting your position that the tentative rates for credit property insurance need to be changed. After any requested hearings have been held, the final rate or an affirmation of the tentative rate shall be sent to all companies before October I, 2020.
Any questions or concerns about this Bulletin should be submitted in writing to the attention of: Will Davis, FCAS, MAAA
South Carolina Department of Insurance
120 I Main Street, Suite 1000 Columbia, South Carolina 2920 I Facsimile: (803) 737-6145