AUTHORISATION

SECTION I
FUNDAMENTALS OF THE UBI MARKET
The main criteria to look at for filing UBI policies in each state include:
• Whether the filing is required or not,
• Whether the filing is open or not (disclosure of the criteria used in rating),
• Whether the filing is transparent or not (disclosure of the rating mechanisms),
• Other exceptions in the rating criteria, such as a ban on the use of age,
location, etc.
Licence
Other regulated risk calculation factors that the state department will look at
include:
• The respect of consumer privacy,
agreement
signed by
• Rates based on factors that individual drivers can control,
• Rate stability - Certain states attempt to do so by controlling the rates, while
others attempt to foster competition in order to drive rates down.
AAAA. Reserved
Some of the states have already started to take action related to UBI and we have
summarised some of the known decisions, or exceptions below.
for employees of
Illinois has passed regulations that promote PAYD but indirectly inhibits PHYD.
BBBB
Illinois has “open rating laws” whereby the insurers can chose their risk rating
factors freely, which originally promoted PAYD. However, the same law requires the
open posting of the ratings systems, so PHYD programmes would be required to
share their predictive modelling formulae.
In fact, Pennsylvania, Maryland, Massachusetts and Texas also require the open
filing of the pricing and rating formulae.
In the state of Washington, the DoI (Department of Insurance) accepts a separate
confidential filing for trade secret information.
Telematics devices to collect actual mileage are specifically permitted in
California. But collecting additional information, such as when, where or how the
car is driven, is prohibited.
Strictly reserved to BBBB
employees. Distribution to third
As Joel Laucher, a deputy commissioner for the State of California Department of
Insurance, puts it: "The freedom to use any rating factor is not the story in
California."
parties is prohibited
Ironically, California was also the first state to implement Electronic Data Recorder
(EDR) statutes which require vehicle owners’ consent before retrieving accident
© PTOLEMUS - www.ptolemus.com - Global Usage-based Insurance Study - January 2016 - All rights reserved
Strictly reserved for the internal use of the reader - Distribution to third parties is prohibited 103