IREG Update - Price Optimization

Price optimization update

Background

In June 2015, we reported that while four states had issued formal bulletins and memoranda prohibiting the practice of price optimization by property and casualty insurers, and that the issue was receiving scrutiny from other states, the National Association of Insurance Commissioners (NAIC) had yet to finalize its recommendations on the practice. At the NAIC Fall Meeting in November 2015, the Property and Casualty Insurance (C) Committee (Committee) adopted the Casualty Actuarial and Statistical (C) Task Force (Task Force) Price Optimization White Paper. In addition, since our update on June 12, more states and the District of Columbia have issued bulletins and memoranda barring price optimization practices by insurance companies.