TO: The Massachusetts Property Insurance Underwriting Association, the Twenty-five Company Groups with the Largest Shares of the Massachusetts Homeowners Market, and Statistical Agents for Massachusetts Homeowners Insurance
FROM: Linda Ruthardt, Commissioner of Insurance
DATE: August 9, 1996
RE: Special Reports on Massachusetts Homeowners Insurance

As a result of recent changes to Massachusetts statutes, there are new statistical reporting requirements that apply to the Massachusetts Property Insurance Underwriting Association ("FAIR Plan") and to each admitted insurer writing homeowners insurance in Massachusetts. Pursuant to these new requirements, the FAIR Plan and each admitted insurer, respectively, must annually submit to the Division of Insurance ("the Division") certain statistical information regarding its homeowners insurance experience. Compliance with these new requirements (specified below) is to be effected through statistical agents approved by the Commissioner of Insurance ("the Commissioner") to act on behalf of reporting insurers.

In addition, the FAIR Plan and the twenty-five admitted insurers with the largest shares of the Massachusetts homeowners market, respectively, must submit, directly to the Division, reports on the number of cancellations and nonrenewals of homeowners policies each has effected in specified areas within the state.

This bulletin describes the manner in which the new statistical reporting requirements for homeowners insurance will be implemented this year. Any changes in implementation that occur in the future will be addressed at that time by means of bulletins or other communications from the Division. We anticipate that all parties involved will make their best efforts to comply with the new requirements.

1994 and 1995 Calendar Year Data to Be Reported Through Statistical Agents by All Companies and the FAIR Plan

The FAIR Plan and each admitted insurer writing homeowners insurance in Massachusetts must report to the Commissioner, by means of the approved statistical agent to which each respectively reports for homeowners statistical plan purposes, the following homeowners insurance data for the calendar years 1994 and 1995: written premiums; earned premiums; incurred losses, including loss adjustment expenses. loss ratio; number of incurred claims, and number of exposures. This data must be reported separately for the owners, tenants, and condominium forms of homeowners insurance. The statistical agents must also report aggregate cause of loss data. For formatting and other technical requirements that apply to these reports, including specification of the standard statistical territories, see the section, "Technical Requirements -- 1994 and 1995 Calendar Year Data Reports" (below).

Cancellation and Nonrenewal Data Required from the FAIR Plan and the Twenty-five Company Groups with the Largest Shares of the Massachusetts Homeowners Market

The FAIR Plan and the twenty-five insurers with the largest shares of the Massachusetts homeowners market must report to the Commissioner the number of cancellations and the number of nonrenewals of homeowners policies each effected in calendar years 1994 and 1995 within the following geographical areas in Massachusetts: the areas corresponding to each of the postal zip codes applicable to the territories designated by the Commissioner as credit-eligible in accordance with Chapter 93 of the Acts of 1996; the areas covered by all other Boston zip codes, and the additional zip codes designated in this bulletin for this purpose. The twenty-five insurers with the largest shares of the Massachusetts homeowners market are defined for these purposes as the twenty-five insurance company groups with the largest shares of the Massachusetts homeowners market, as measured by statewide written premium for calendar year 1995. Reporting by such groups should include separate reports by each company within the group. The twenty-five largest groups are listed on Exhibit A. The zip codes are listed on Exhibit B.

Technical Requirements -- 1994 and 1995 Calendar Year Data Reports

The 1994 and 1995 Calendar Year Data Reports by statistical agents must be made no later than September 5, 1996, for calendar/accident year 1994 and 1995 experience. The reports should be on a per company basis. The submissions must be provided as follows: on diskette; using the prescribed record layouts, in ASCII comma delimited format; named according to the convention set forth in Exhibit C, and directed to:

State Rating Bureau
Chapter 93 Data Collection
Massachusetts Division of Insurance
470 Atlantic Avenue
Boston, Massachusetts 02210-2223

If you should have any questions regarding these requirements, please contact the State Rating Bureau at (617) 521-7336.

The following data elements should be included in the submission. Refer to Exhibit D for the "statistical agent - by company" submission record layout.

Company: Report the five digit NAIC company number.

Territory: Report the appropriate two digit standard statistical territory code (refer to Exhibit E).

Policy Form Group: Report "0" for owners forms. "T" for tenants forms, and "C" for condominium forms.

Calendar/Accident Year: Report the applicable two digit calendar/accident year, i.e. 94 or 95.

Written Premium: Report the premium amount for policies written during the calendar year.

Earned Premium: Report that portion of the written premium amount which was in effect during the 1994 and 1995 calendar years for policies written since January 1, 1994. Report each year separately. No earned premiums should be included for policies written prior to 1994.

Written Exposure (House-Years): Report the number of house-years for policies written during the calendar year. A house-year is defined as one house insured for one year, and is calculated based on the term of the policy. For example, a policy with a term of six months would be counted as 0.5 house-years.

Earned Exposure (House-Years): Report that portion of the written house-years amount which was in effect during the 1994 and 1995 calendar years for policies written since January 1, 1994. Report each year separately. No earned house-years should be included for policies written prior to 1994.

Incurred Losses, including all loss adjustment expenses: Report incurred losses including all loss adjustment expenses which occurred during the 1994 and 1995 accident years for policies written since January 1, 1994. Report each year separately. Incurred losses should be evaluated as of fifteen months from the start of the year. Losses which occurred during the year for policies written prior to 1994 should not be included.

Incurred Claims: Report the number of incurred claims corresponding to the incurred losses reported.

Loss Ratio: This is defined as the incurred losses including all loss adjustment expenses divided by earned premiums, rounded to three decimal places.

Additional Statistical Agent Requirements for All insurers - Aggregate Data

On or before September 5, 1996, the statistical agents are required to submit aggregate data by cause of loss for their reporting insurers. The following data elements should be included in the submission. Refer to Exhibit F for the "statistical agent - aggregate data" submission record layout.

Territory: Report the appropriate two digit standard statistical territory code (refer to Exhibit E).

Policy Form Group: Report "0" for owners forms. "T" for tenants forms, and "C" for condominium forms.

Calendar/Accident Year: Report the applicable two digit calendar/accident year, i.e., 94 or 95.

Cause of Loss: Report the appropriate two digit cause of loss code (refer to Exhibit G).

Incurred Losses, including all loss adjustment expenses: Report incurred losses including all loss adjustment expenses by cause of loss, for losses which occurred during the year for policies written since January 1, 1994. Report each year separately. Incurred losses should be evaluated as of fifteen months from the start of the year. Losses which occurred during the year for policies written prior to 1994 should not be included.

Incurred Claims: Report the number of incurred claims corresponding to the incurred losses reported.

Technical Requirements -- Cancellation and Nonrenewal Reports

The cancellation and nonrenewal reports by the top twenty-five insurance company groups and the FAIR Plan for calendar years 1994 and 1995 must be submitted no later than September 5, 1996. The submissions must be provided as follows: on diskette; using the prescribed record layout, in ASCII comma delimited format; named according to the convention set forth in Exhibit C ('YYDCCCCC.ASC' where YY is the year of the experience period, D indicates cancellation/nonrenewal submission, CCCCC represents the five digit NAIC company number); and directed to the State Rating Bureau (at the address stated above), to the attention of "Chapter 93 Data--Top Twenty-five Insurance Company Group." The diskette must be accompanied by a completed certification form of the type set forth in blank in Exhibit H. If you have questions regarding these requirements, please contact the State Rating Bureau at the number stated above.

The following data elements should be included in the submission. Refer to Exhibit I for the "individual insurer - cancellation/non-renewal" submission record layout.

Company: Report the five digit NAIC company number.

Zip Code: Report the appropriate five digit zip code (refer to Exhibit B).

Calendar Year: Report the applicable two digit calendar year, i.e., 94 or 95.

Number of Policies in Force: Report the number of policies in force as of December 31 of the calendar year.

Total Number of Cancellations: Report the number of policies canceled during the calendar year. A cancellation occurs during the policy term.

Total Number of Non-renewals: Report the number of policies not renewed during the calendar year. A non-renewal occurs when a policy expires.

Number of Insurer-Initiated Cancellations: Report the number of cancellations during the calendar year that were initiated by the insurer, excluding those canceled by the insurer for non-payment of premium.

Number of Insurer-Initiated Non-Renewals: Report the number of non-renewals during the calendar year that were initiated by the insurer, excluding those non-renewed by the insurer for non-payment of premium.

Note: Failure by an insurer to provide any of the above data items must be accompanied by a detailed explanation as to the reason(s) for that failure.


Exhibit A

Massachusetts 1995 Top Twenty-Five Groups by Written Premium Volume for Homeowners Multi-Peril Insurance

Aetna Life & Cas Grp
Allmerica P & C Cos
Amica Mutual Ins Co
Andover Ins Group
Arbella Ins Group
Chubb Grp of Ins Cos
Comm Union Ins Cos
Commerce Group, Inc
Fitchburg Mutual Ins
Harleysville Ins Cos
Hingham Mut Grp
Holyoke Mutual Ins
John Hancock Group
Liberty Mutual Group
Main Street Amer Grp
Metropolitan Group
NLC Ins Cos
Norfolk & Dedham Grp
Pawtucket Mut Group
Plymouth Rock Cos
Quincy Mutual Fire
Travelers Ins Group
Union Mut Fire Group
USAA Group
Vermont Mutual Group


Exhibit B

Massachusetts Zip Codes to Be Included in the Cancellation / Non-Renewal Reports

Zip CodeCity/TownZip CodeCity/Town
02101Boston01840Lawrence
02102Boston01841Lawrence
02103Boston01842Lawrence
02104Boston01843Lawrence
02105Boston01901Lynn
02106Boston01902Lynn
02107Boston01903Lynn
02108Boston01904Lynn
02109Boston01905Lynn
02110Boston02138Cambridge
02111Boston02139Cambridge
02112Boston02140Cambridge
02113Boston02141Cambridge
02114Boston02142Cambridge
02115Boston02238Cambridge
02116Boston02143Somerville
02117Boston02144Somerville
02118Boston02145Somerville
02119Boston02150Chelsea
02120Boston02151Revere
02121Boston02152Winthrop
02122Boston02401Brockton
02123Boston02402Brockton
02124Boston02403Brockton
02125Boston02404Brockton
02126Boston02405Brockton
02127Boston02740New Bedford
02128Boston02741New Bedford
02129Boston02742New Bedford
02130Boston02743New Bedford
02131Boston02744New Bedford
02132Boston02745New Bedford
02133Boston02746New Bedford
02134Boston
02135Boston
02136Boston
02137Boston
02163Boston
02199Boston
02203Boston
02205Boston
02208Boston
02209Boston
02210Boston
02215Boston
02222Boston



Exhibit C

File Naming Convention
Starting PositionCodeDefinition
01YYExperience period (e.g. 94 or 95)
03-Type of Submission
ABy Company
BAggregate Data
04---Name of Statistical Agent
AAIS
NAII
NISS
ISO
end.ASCFile extension

Sample file name: '94BAAIS.ASC'
Translation: (1994 data, aggregate data submission, reported by AAIS)

Sample file name: '95BISO.ASC'
Translation: (1995 data, aggregate data submission, reported by ISO)

Exhibit D

Statistical Agent Layout (All Insurers - By Company)
1company number
2
3
4
5
6territory
7
8policy form
9year
10
11written premium (whole dollars)
12
13
14
15
16
17
18
19
20earned premium (whole dollars)
21
22
23
24
25
26
27
28
29written exposure house-years (whole years)
30
31
32
33
34
35
36earned exposure house-years (whole years)
37
38
39
40
41
42
43incurred losses including all lae (whole dollars)
44
45
46
47
48
49
50
51
52incurred claims
53
54
55
56
57
58
59loss ratio
60
61


Exhibit E
Massachusetts Statistical Territories

Territory Description (County/City) Territory Code
Barnstable *37
Berkshire *50
Bristol (City of Fall River)32
Bristol (City of New Bedford)33
Bristol (Except Fall River & New Bedford)34
Dukes *37
Essex (City of Lawrence)38
Essex (City of Lynn)39
Essex (Except Lawrence & Lynn)40
Franklin *50
Hampden (City of Chicopee)48
Hampden (City of Holyoke)48
Hampden (City of Springfield)47
Hampden (Except Chicopee, Holyoke & Springfield)49
Hampshire *49
Middlesex (City of Cambridge)41
Middlesex (City of Lowell)42
Middlesex (City of Newton)43
Middlesex (City of Somerville)41
Middlesex (Except Cambridge, Lowell, Newton & Somerville)44
Nantucket *37
Norfolk (City of Brookline)12
Norfolk (City of Quincy)30
Norfolk (Except Brookline & Quincy)31
Plymouth (City of Brockton)35
Plymouth (Except Brockton)36
Suffolk (City of Boston - District A)02
Suffolk (City of Boston - District B)03
Suffolk (City of Boston - District C)04
Suffolk (City of Boston - Except Districts A, B & C)11
Suffolk (Except Boston)05
Worcester (City of Worcester)45
Worcester (Except City of Worcester)46
* Entire County


Exhibit F
Statistical Agent Layout (All Insurers - Aggregate Data)
1territory
2
3policy form
4year
5
6cause of loss
7
8incurred losses including all lae (whole dollars)
9
10
11
12
13
14
15
16
17incurred claims
18
19
20
21
22
23


Exhibit G
Homeowners Cause of Loss Codes

Cause of Loss Description Code
Fire, Lightning, and Removal01
Wind and Hail02
Water Damage and Freezing03
Theft04
Liability and Medical Payments06
All Other09



Exhibit H

Certification for Data Submitted in Response to DOI Bulletin No. 96-11

I,_____________________________________________, hereby certify as follows: (1) I hold the position of __________________________________ in __________________________________;(2)I am responsible for overseeing submission of homeowners insurance data by this company to the Massachusetts Division of Insurance in accordance with Chapter 93 of the Acts of 1996, and I am authorized to submit this certification on the company's behalf; and (3) to the best of my knowledge, information, and belief, the information contained in the attached diskette is true, accurate, and complete.

Signed under the penalties of perjury this __________ day of _____________, ___________.
_______________________________________________

Full Business Address:
____________________________________________
____________________________________________
____________________________________________

Telephone Number:
____________________________________________


Exhibit I

1company number
2
3
4
5
6zip code
7
8
9
10
11year
12
13number of policies in force
14
15
16
17
18
19
20total number of cancellations
21
22
23
24
25
26total number of nonrenewals
27
28
29
30
31
32total number of insurer-initiated cancellations
33
34
35
36
37
38total number of insurer-initiated nonrenewals
39
40
41
42
43