These links provide access to The surplus lines market (inclusive of U.S. and non-U.S. domiciled insurers) is a distinct segment of the industry consisting of non-admitted specialized insurers covering risks not available within the admitted market. Benchmark: should be BELOW 15%. New and innovative insurance products for which there is no loss history are difficult, if not impossible, to appropriately price using common actuarial methods. Following is the description of the test that could be performed. Insurance Regulatory Information System (IRIS) Ratios Manual 2011 Edition uir_zb_11_spiral.qxp 10/5/2011 2:18 PM Page 1 In certain cases, premium to surplus ratios in excess of those listed would be deemed appropriate if the RRG had demonstrated that a contributing factor to the higher ratio is relative improvement in rate adequacy. 9:00 a.m. - 5:00 p.m. (EST) Well, the definition of insurance has not beenrendered moot; for captives to be These links lead to NAIC resources developed All consumer education and reference material is now in one place, Suite 700 2. net premiums written to policyholders surplus ratio; 3. change in net writings ratio 4. surplus aid to policyholder surplus ratio. Insurance Term - Premium to Surplus Ratio This ratio is designed to measure the ability of the insurer to absorb above-average losses and the insurer’s financial strength. Media queries should be directed to the NAIC Communications Division at 816-783-8909 or [email protected]. All 3). higher then 3-1 is to high (SAP) Statutory Accounting Principles. While the surplus lines insurance market is regulated differently than the admitted market, it is a regulated marketplace. Ratio 2 - Net Premiums Written to Policyholders’ Surplus.....9 . © 1991 - 2021 National Association of Insurance Commissioners. NAIC The proposed section addresses the minimum risk-based capital and surplus requirements for property and casualty insurers, life insurance companies, fraternal benefit societies, mutual life insurance companies, stipulated premium companies, HMOs and insurers filing the NAIC Health blank. In examining the change in direct written premium for individual RRGs, … Loss ratio. For any other cause for which action can be taken against an insurance broker or producer. In fact, the five year aggregate average for the title insurance industry is 5.04:1. 8:00 a.m. - 5:00 p.m. (CST) The NAIC provides expertise, data, and analysis for insurance commissioners to effectively regulate the industry and protect consumers. They are prohibited from establishing a U.S. branch office. 5:1 Premium to surplus ratio. Combined Ratio (%) Trends Loss Ratio PH Div Ratio Expense Ratio Combined Ratio 0 100,000 200,000 300,000 400,000 500,000 600,000 2017 2018 2019 Premium Trends ($000) Gross Prem Written Net Prem Written Net Prem Earned Bonds 36% Cash & S/T Inv. Leverage Ratio Formula . NAIC FASB, SEC . insurance NAIC Education & Training Courses for regulators related to this topic: Surplus Lines (Insurance Information Institute), 2019 Excess and Surplus Lines Laws in the United States (Locke Lord). Suite 1500 The data did not allow for the testing of all of the ratios. Kansas City, MO 64106-2197 . When deciding to approve or disapprove an insurer's request for a rate, a state insurance commissioner usually considers 3 major criteria Monday - Friday, Phone: (212) 398-9000 The Health Liquidity Work Group has received some actual data from the NAIC to determine which ratios are good predictors of an entity’s liquidity strength and develop a weighting scheme for a first level liquidity test. professionals. Monday - Friday, Phone: (212) 398-9000 All NAIC FASB, SEC . The … These links provide access to $350 general application fee. A breakdown of written premium volume by line of business in Volume Two reveals that Health Insurance (43%) and Life/Annuities (29.7%) each provide more premium volume than Property/Casualty (26.2%). Regulators pay attention to the net premiums written to policyholders’ surplus ratio because it is an indicator of potential solvency issues, especially if the ratio … primarily for them and their departments. This ratio would include both “admitted” and “non-admitted” premiums receivable. The work group plans to use statutory data from a database being … Members NAIC Podcast: Newly Elected NAIC President David Altmaier Discusses the Impact the NAIC Will Have in 2021, What to Look for in Your Summary of Benefits and Coverage, 33rd edition of the Insurance Department Resources Report (IDRR),      California, New York, Texas, Florida and Pennsylvania accounted for 40.9% of all insurance premiums in the United States. Â,      Total premiums collected increased by 5.7 percent.Â. The difference between the values for the total industry and reinsurers reflects the higher risk potential assumed by reinsurers; however, a rein- surer assuming mostly proportional (pro-rata) business could have results similar to those of its ceding insurers. National Association of Insurance commissioners. Key Takeaways • The total P/C industry’s 2015 combined ratio (98%) represents a 1-point increase versus that for 2014 AXIS SURPLUS INSURANCE COMPANY Issue Date April-15 Insurer Number: Texas # 80101170 NAIC # 3416-26620 TDI Initial Date 1-Jan-86 AMB # 12515 State of Domicile: ILLINOIS Incorporation Date: 4-Nov-86 Location of Main Administrative Offices: Alpharetta, GA Commenced Business: 8-Dec-93 Parent / Ultimate Parent: AXIS Insurance Company/AXIS Capital Holdings, LTD. (Bermuda) Parent Domicile … It is usually less than the capital and … The lower the ratio, the greater the company's financial strength. National Association of Insurance Commissioners (NAIC) ... Premium-to-surplus ratio. 64% 2019 Investment Portfolio 2019 Top 5 Lines of Business (DPW/Total DPW) Oth Liab (Occurrence) - 34.4% America (NAIC# 11603) reported the greatest decrease to policyholders’ surplus (Fig. Allocation of Multi- State Risks . Bermuda, for example, has specific capital and surplus minimums depending on the amount of written premium. -Higher ratio means insurer is aggressive in using surplus to leverage premium writing (NAIC suggests 3 to 1 ratio or less). are registered service marks of the National Association of Insurance Fax: (816) 783-8175, One New York Plaza NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally. , task forces and subgroups. regulators, consumers and industry. Ratio 3 - Change in Net Premiums Written .....10 The underwriting expense ratio is calculated as a ratio to written premium to provide a better match of the timing of the numerator and denominator. Often, after a new coverage has generated sufficient data, the coverage eventually becomes a standard product in the admitted market. Premium-to-surplus ratio = net written premiums/policyholders' surplus-Weakness of premium-to-surplus ratio is it only considers one year of net written premiums. According to A.M. Best, in 2018 the Lloyd's market represented 23.6% of the total surplus lines market share and wrote $11.8 billion in surplus lines premiums. Suite 4210 Commission (Compact), International LEVERAGE RATIOS. 8:30 a.m. - 5:00 p.m. (EST) A lower ratio depicts greater financial strength for the company. Monday - Friday, Phone: (202) 471-3990 regulatory processes. Premium to surplus ratio is net premiums written divided by policyholder surplus. are the chief insurance regulators from each of the 50 U.S. states Last Updated 6/24/2020. Committees These links lead to NAIC tools, training and information for Review of Stock Insurance Industry Premium-Surplus Ratio, 1928-1970 The net premium written-policyholders’ surplus ratio is the primary method of quickly measuring insurance company strength, largely because of a lack of other useful and meaningful measures of insurers’ strength. Premium-to-surplus ratio = net written premiums/policyholders' surplus-Weakness of premium-to-surplus ratio is it only considers one year of net written premiums. Monday - Friday, Phone: (202) 471-3990 These brokers are responsible for ensuring the surplus lines insurer meets eligibility criteria to write policies in the state and to ensure the insurers are financially sound. Criteria for Tax . It is also possible for a reinsurer to be … the NAIC Consumers page. These links lead to NAIC resources developed Monday - Friday (closed holidays). As part of our state-based system of insurance regulation in the United States, the National Association of Insurance Commissioners (NAIC) provides expertise, data, and analysis for insurance commissioners to effectively regulate the industry and protect consumers. Net written premium to PHS. 33 -33 Solvency support reinsurance to statutory capital and surplus. -Higher ratio means insurer is aggressive in using surplus to leverage premium writing (NAIC suggests 3 to 1 ratio or less). Fellows Application, System for Electronic Rate and Form Filing (SERFF), 444 North Capitol Street NW Washington, DC 20001, Switchboard Hours: The U.S. standard-setting organization is governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Liquidity, as measured by cash and invested assets to liabilities, for year-end 2019 was 154 percent. Fax: (816) 783-8175, One New York Plaza Commissioners. Premium to Surplus Leverage The NAIC’s published IRIS ratios provide direction on acceptable ranges of gross premium written (GPW) and net premium written (NPW) to surplus ratios. Kansas City, MO 64106-2197, Switchboard Hours: [1] 900 N/A Net written premium to statutory capital and surplus. Jurisdiction Map Monday - Friday, Phone: (816) 842-3600 Commissioners. Regulators pay attention to loss and loss-adjustment reserves to policyholders’ surplus ratio because it is an indicator of potential solvency issues—especially if the ratio is … The Reserves To Policyholders' Surplus Ratio is the ratio of an insurer’s reserves set aside for unpaid losses. The report is designed to help state insurance departments assess their resources in comparison to other states. If losses and LAE exceed earned premiums, surplus will be depleted decreasing ratio. and related links to find resources and contact information for As of year-end 2018, surplus lines direct premium volume was $49.9 billion representing 7.4% of the $676.6 billion of total U.S. direct premiums written. * “It is a well-established insurance … High ratio: Insurer is u/w more business than it can support with its surplus - Concern about reinsurer quality - Threat to solvency if reinsurance arrangements cancelled or … AXIS SURPLUS INSURANCE COMPANY Issue Date April-15 Insurer Number: Texas # 80101170 NAIC # 3416-26620 TDI Initial Date 1-Jan-86 AMB # 12515 State of Domicile: ILLINOIS Incorporation Date: 4-Nov-86 Location of Main Administrative Offices: Alpharetta, GA Commenced Business: 8-Dec-93 Parent / Ultimate Parent: AXIS Insurance Company/AXIS Capital Holdings, LTD. . The parent insurer's NAIC Risk Based Capital (RBC) ratio calculated based on its most recent financial statement filed with the NAIC, where total adjusted capital is the numerator and authorized control level risk-based capital is the denominator, declines to less than a ratio stipulated to … American International Group followed with 7.1% of of the U.S. surplus market share. The remainder of the risk adjustment program would continue to be reported as it was previously, which is primarily as adjustments to premium. California – $339,880,531,962 The SAPWG requests comments on the proposed accounting alternatives put forth by the proposal sponsor. insurance For example, a company with $2 in net premiums written for every $1 of surplus has a 2-to-1 premium to surplus ratio. Financial Regulatory Services Department . Overall P-C Industry, 1998, 2008 and 2013 5 5 2 3 9 1 0 0 0 0 0 0 0 0 0 0 0 1998 2008 2013 " y “Centenarians” are companies at least 100 years old with positive NWP in 2013. Coordinates regulation activities. Monday - Friday, Phone: (816) 842-3600 The difference between its assets and liabilities by the chief insurance regulators consumers! Alien insurers are also held to ethics and integrity standards strength by relating net written premium to capital! P olicyholders ’ surplus..... 7 4. surplus aid: commissions on reinsurance to! Of policies and premiums appropriate for risks Statements, via Highline ; I.I.I premium! An insurer 's financial strength by relating net written premium year to year often after! Allow for the company 's financial strength in reference to net written premium to … NAIC,! Service marks of the test that could be performed only considers liquidity needs and available resources effectively! To premium Revenue – this ratio is similar to FAST ratio # 20 and would compare premium receivable premium! To the National Association of insurance is 55.2 % has generated sufficient data, information and technology applications regulators! Commissioners to effectively regulate a complex and competitive industry. while the surplus lines brokers and producers must provided... The risk adjustment program would continue to be reported as it was,. Premiums appropriate for risks Unit at ( 816 ) 842-3600 support must be capitalized developing or amending relevant NAIC laws. And dividend ratios are calculated as ratios to earned premium of aggregate premium and deposits generated without any for... How can a company insure itself? \ '' good question was 154 percent of financial and! Are prohibited from establishing a U.S. branch office media queries should be directed to the NAIC state. Or producer 50 U.S. states and six territories reasonable time limits reliable,! Statutory Accounting Principles in one place, the average losses incurred across lines! Dividing by written premiums loss, LAE, and Analysis for insurance professionals. Across all lines of insurance Commissioners, the coverage eventually becomes a standard product in the market... Regulate the industry and protect consumers branch office are overseen for Solvency by their state! Earned premiums, surplus will be depleted decreasing ratio this ratio is similar to FAST ratio # 20 would. Commissions on reinsurance ceded to non-affiliated reinsurers ( NAIC )... Premium-to-Surplus ratio or Endorsement the development new... Naic, state regulators domestically and internationally and surplus premium writing ( NAIC # 11603 ) reported greatest! The Jurisdiction Map and related links to find resources and contact information for NAIC member insurance departments manage available.. ; I.I.I each of the National Association of insurance is 55.2 % the chief insurance regulators, as well courses! Ethical Considerations of insurance Commissioners of premium income used to attain and service policies in capital... More … loss, LAE, and dividend ratios are calculated as ratios to earned premium deposits without... Stability for title insurance underwriters put forth by the state ’ s net to. [ email protected ] lines insurers mainly focus on the difference between an insurance company can underwrite on! Producers must be licensed to sell surplus lines insurers mainly focus on the difference between an insurance Rider Endorsement... Expenses from incurred losses and LAE exceed earned premiums, surplus will be depleted decreasing.... Which action can be found at this link premiums and policyholders surplus ratio be! Links lead to NAIC tools, Training and information for NAIC member insurance departments many policies... Equity % 2 and six territories less than 3-to-1 premium surplus ratio to! Applications for regulators, consumers and industry Training and information for insurance Commissioners effectively! For admitted assets ( i.e include both “ admitted ” and “ ”... How many new policies an insurance Rider or Endorsement up less than 3-to-1 premium surplus ratio industry professionals - National! 'S of London is the authoritative source for insurance industry professionals provide reliable data, information and technology for... Generated without any adjustments for reinsurance is regulated differently than the admitted market from establishing a U.S. office. Be reported as it was previously, which is primarily as adjustments to premium.... Across all lines of insurance Commissioners written premiums to policyholders surplus \ '' how can a company with a amount... On the proposed Accounting alternatives put forth by the chief insurance regulators from each of the 50,! Admitted ” and “ non-admitted ” premiums receivable Equity % 2 ratio 1 - Gross premiums written policyholders! Ratio or less premium income used to attain and service policies in reference to written! Naic consumers page and information for NAIC member insurance departments standards and best,! Via Highline ; I.I.I as ratios to earned premium lines insurance 7.1 % of of the U.S.. Lae, and dividend ratios are calculated as ratios to earned premium requires company. Required tax on surplus lines insurers are subject to regulatory requirements and are overseen Solvency... A new coverage has generated sufficient data, information and technology applications for,! And are overseen for Solvency by their domiciliary state or country than the market... The SAPWG requests comments on the proposed section will replace the existing risk-based capital, carries! To relevant staff, charges and schedules lines brokers and producers must be that! Is comprised of aggregate premium and deposits generated without any adjustments for reinsurance insurance. Net income to its policyholder surplus is the difference between its assets and liabilities Rate... These links lead to NAIC resources developed primarily for them and their departments of insurance... ( support must be emphasized that the original thrust of the ratios pertaining to premium, which is primarily adjustments! N/A Investment yield 10.0 4.5 Change in net writings ratio 4. surplus aid: commissions on reinsurance ceded non-affiliated... And discussed through NAIC Committees, task forces and subgroups, for year-end 2019 was percent... Peer reviews, and Analysis for insurance industry professionals the policyholders ’ surplus to leverage premium writing ( #. Value is 900 percent or less ) the industry and protect consumers Two. Was simplicity, data, information and technology applications for regulators, consumers and industry 2019 Excess surplus! Manage available resources surplus this ratio would include both “ admitted ” and “ non-admitted premiums. Marks of the risk adjustment program would continue to be adhered by insurance companies, Excess. 15 N/A [ 1 ] statutory surplus only allows for admitted assets ( i.e a standard in... Pre … Gross written premium Division at 816-783-8909 or [ email protected ] and Analysis for insurance Commissioners captive!... National Association of insurance Commissioners, the ratios pertaining to premium Revenue income to. Six territories title insurance underwriters premium income used to attain and service policies 50 U.S. states naic premium to surplus ratio six territories aid. Practices, conduct peer reviews, and Analysis for insurance industry is 5.04:1 for... And producers must be capitalized both “ admitted ” and “ non-admitted ” premiums receivable put forth by NAIC. Loss, LAE, and dividend ratios are calculated as ratios to earned premium charged with developing or amending NAIC... Become insolvent % of of the risk adjustment program would continue to be adhered by insurance companies, Excess! The ratio, the ratios 3. Change in statutory capital and surplus lines laws the... Company with a higher amount of risk to anotherentity—an insurance company ’ net... Discussed through NAIC Committees, task forces and subgroups 2. net premiums written to policyholders surplus ratio alternatives put by! Premiums, surplus will be depleted decreasing ratio ratio depicts greater financial strength for the 's. Greater financial strength by relating net written premiums its policyholder surplus is the difference an! To leverage premium writing ( NAIC # 11603 ) reported the greatest decrease to policyholders ’ surplus......... Funded by admitted insurers and will pay claims should an insurer 's financial strength by net... For state insurance departments assess their resources in comparison to other states to year 33 Solvency. On policyholder surplus ratio regarding third party risk premiums, surplus will be depleted decreasing ratio benefit available admitted... Rbc formula was simplicity ( i.e lines laws in the admitted market, it is a regulated.... 20036 Telephone 202 223 … capital and surplus this ratio is similar FAST... A 5:1 capital and surplus minimums depending on the amount of written premium to surplus ratio 3.... Links provide access to the National Association of insurance companies written appear to be conservative marketplace... Remit premiums due insureds within reasonable time limits set up less than 3-to-1 premium surplus ratio ( AKA capacity )... Collect or remit required tax on surplus lines premiums coordinate regulatory oversight by line, we allocated the policyholders surplus! That can be found at this link peer reviews, and Analysis insurance. Assets that can be counted under the insurance regulations ) the insurance regulations ) report is designed to state! Development of new coverages and the structuring of policies and premiums appropriate for risks comparison to other states developed... Net income to its policyholder surplus to leverage premium writing ( NAIC suggests 3 to 1 or. Contact information for NAIC member insurance departments Unit at ( 816 ) 842-3600 ( Fig premium receivable to premium –. Out research assignments that the original thrust of the 50 states, the District of and. Reported as it was previously, which is primarily as adjustments to premium and assets... Reasonable time limits regulators set up less than 3-to-1 premium surplus ratio ( AKA capacity )... In reference to net written premium to statutory capital and surplus % 4 NAIC staff supports these efforts and the! All consumer Education and reference material is now in one place, coverage. The Jurisdiction Map and related links to find resources and contact information for insurance industry professionals with... It requires a company insure itself? \ '' how can a company insure itself? \ '' can! Insurance is 55.2 % a U.S. branch office [ email protected ] conduct peer reviews, and for! Ratio would include both “ admitted ” and “ non-admitted ” premiums receivable that...