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3304 Assignment 3 Project (30 Points)

1) (15 points) For these questions, download the 2010analysisofpropertycasualtylawsineffect.pdf from blackboard. Note, paper is the opinion

of the Property Casualty Insurers Association of America. There may be others who will

differ with their analysis.

a) How can rates for private passenger auto insurance be adjusted in Texas b) What has been the general effect on consumers because of greater rate competition c) What kind of rating system did NY recently adopt for private passenger autos and define

what this kind of rating system means

d) What kinds of rating systems have most states adopted. Generally what do these systems mean to insurers

e) Overall, how would you summarize this article. What criticisms do you have of this article.

2) (15 Points) Justabitof Insurance is considering to expand into State X. State X has open competition in very large commercial lines ($500,000 in premium or more), but use and file

on all other commercial lines. In personal lines auto all rates are set by the state and for

homeowners the rates are use and file. The rating approval process for homeowners may

change to pre-approval because it is a coastal state and a number of insurers have increased

premiums or cancelled accounts in coastal areas. Justabitof Insurance sells personal lines and

small business – it’s average commercial lines account is under $10,000. You are in charge

of marketing. The CEO has asked you to put together a recommendation of how you could

build a market for Justabitof’s products in State X. Outline the marketing and distribution

plan you would propose for the CEO’s consideration. You are licensed in State X, but

haven’t done business there. You have no offices and no agents or producers licensed in State

X.