REGULATORS MAY ALTER MARINE COMP GUIDELINES

REGULATORS MAY ALTER MARINE COMP GUIDELINES

Marine and inland marine insurers may face new rating standards for their workers compensation policies under a proposal to be considered by state insurance regulators at a meeting that begins Saturday and runs through next Friday.

Also under consideration are new guidelines for the way aviation insurers report loss information.The National Association of Insurance Commissioners (NAIC) is considering a rate regulatory model bill that would bring marine and inland marine insurers' rates for workers compensation in line with legislative models regulators have adopted for other marine coverages, such as commercial property.

The newest draft, to be considered here Monday, calls for uniform rate classification, meaning that workers with similar risks should be charged similar rates.

For example, shipbuilder's workers compensation insurance would be more expensive than clerical office workers compensation because of the higher risk and greater likelihood of injury, said said Eric Nordman, senior regulatory specialist for the NAIC.

The proposal also calls for uniform experience rating, meaning, for example, that a shipbuilder with higher-than-average claims would pay a higher rate, while a shipbuilder with low or no claims would get a lower rate.

"Some companies are more safety-conscious and have a safer work place," Mr. Nordman said.

Some companies and states are already using the system.

The model bill, if approved, would give the rest of the states access to a uniform method to regulate rates.

Regulators are also hoping to develop uniform reporting methods for private statistical organizations used by aviation insurers. The issue will be addressed here Sunday. For instance, more than 30 statistical groups may report information in different ways, making it difficult to measure market activity.

Previously, insurance companies used private statistical organizations to gather loss data from insurers and propose rates.

But state regulators opposed the system, saying each insurer must propose individual rates based on the company's expenses to avoid the appearance of price fixing and violations of antitrust laws.

The new guidelines allow insurers to use the statistical organizations to gather loss information from claims but require that the companies apply their own expense ratio to develop rates, said Mr. Nordman.

Marine insurance covers property in transit. Property that moves over sea is covered by ocean marine insurers. Otherwise, Inland marine insurance covers goods in transit over land as well as inland instruments of transportation such as bridges and tunnels.