By Alwyn Scott
NEW YORK (Reuters) – Facing mounting opposition, a major insurance actuary organization has backtracked on a decision to drop long-standing principles on how car and home policy premiums should be set.
The Casualty Actuarial Society (CAS) said on Friday it had reinstated principles in use since 1988 that required rates for such coverage to reflect the costs.
The decision came a week after the Consumer Federation of America (CFA) said it had asked regulators to toughen their oversight to avoid unfair or discriminatory prices in the absence of the guiding principles.
A task force organized by the National Association of Insurance Commissioners, an organization of state regulators, had opposed dropping the principles and planned to meet on Tuesday to “recommend an appropriate remedy.”
In rescinding the principles in December, CAS said they had grown outdated and had been duplicated by new standards.
A CAS spokesman said on Monday that the board voted on Thursday to reverse the decision “based on stakeholder feedback, primarily from the regulatory community, that the ratemaking principles are frequently referenced by CAS members to support rate filings, in litigation, and for expert testimony, and they provide a concise and understandable explanation of actuarial ratemaking for non-actuaries and regulators.”
The spokesman said the decision was effective immediately.
(Reporting by Alwyn Scott in New York; Editing by Matthew Lewis)
