Florida Regulations 69O-175.001: Calculation and Use of Investment Income in Motor Vehicle Insurance Rates
Current as of: 2024 | Check for updates
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(1) This rule shall apply to rates filed or reviewed pursuant to Florida Statutes § 627.0651
(2) The purpose of the rule is to specify the manner in which insurers shall calculate investment income attributable to motor vehicle insurance policies written in Florida and the manner in which such investment income is used in the calculation of insurance rates by the development of an underwriting profit allowance compatible with a reasonable rate of return.
(3) As used herein:
(a) Auto insurance means private passenger motor vehicle insurance as defined in Florida Statutes § 627.041(8);
(b) Liability subline means the sublines of auto insurance in the aggregate commonly considered to be auto liability insurance;
(c) Physical Damage subline means the sublines of auto insurance in the aggregate commonly considered to be auto physical damage insurance.
(4) Each insurer shall determine the expected patterns of loss payments over time associated with a policy of auto insurance written in Florida. These patterns of loss payments shall be determined separately for the Liability subline of auto insurance and for the Physical Damage subline of auto insurance. The determination shall be made using Florida accident year or policy year loss payment patterns, and must fairly represent the auto insurance loss transactions of the insurer.
(5) Each insurer shall determine YA, the expected investment income yield on invested assets representing unearned premium and loss reserves. The expected investment income yield, YA, shall be calculated using the quantities and formula below:
Terms Used In Florida Regulations 69O-175.001
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
(3) As used herein:
(a) Auto insurance means private passenger motor vehicle insurance as defined in Florida Statutes § 627.041(8);
(b) Liability subline means the sublines of auto insurance in the aggregate commonly considered to be auto liability insurance;
(c) Physical Damage subline means the sublines of auto insurance in the aggregate commonly considered to be auto physical damage insurance.
(4) Each insurer shall determine the expected patterns of loss payments over time associated with a policy of auto insurance written in Florida. These patterns of loss payments shall be determined separately for the Liability subline of auto insurance and for the Physical Damage subline of auto insurance. The determination shall be made using Florida accident year or policy year loss payment patterns, and must fairly represent the auto insurance loss transactions of the insurer.
(5) Each insurer shall determine YA, the expected investment income yield on invested assets representing unearned premium and loss reserves. The expected investment income yield, YA, shall be calculated using the quantities and formula below: