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Publication Date: 2008-Feb-07
Document File: 6 page(s) / 24K

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The Prior Art Database


An automated method is provided that allows rates changes to be made separately for new insurance business versus renewal insurance business. In processing rate changes for new and renewal business separately, split effective dates for the rate changes on each type of insurance business can be displayed to customer service representatives and customers online.

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    When a need arises for an insurance company to make a rate change (i.e., a change in premiums charged to policy holders) for insurance business (e.g., in the auto insurance business in order to address a new actuarial reality), many companies presently are capable of making only a rate change that is effective at the same time for both new and renewal business. As a result, that rate change typically cannot be made immediately but can only occur after a certain waiting period has expired under requirements set for renewal business. In renewal business, for example, renewal processes typically require that a certain period of days of advance notice expire before any rate change can become effective. That is, a rate change can become effective in the renewal insurance business only after a requisite number of days of advance notice have expired, after which a rate change can made across policies of a certain type or class.

    Consideration of a specific example of a premium decrease for insurance business may provide a helpful illustration. Suppose an insurance company is one that has systems in place for making only a rate change that is effective at the same time for both new and renewal business. Furthermore, suppose this company identifies a need to implement a rate decrease immediately in order to improve insurance sales (new and renewal) through both agents and online self-service means. The company finds, however, that the earliest date on which a rate change can be implemented is thirty-six days from the date the company provides notice of its intent to provide policies at the lower rate. Thirty-six days, the company learns, is the number of days needed to meet renewal pre-notice requirements in the jurisdiction(s) of interest (thirty-six days is a usual


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period for fulfilling state renewal pre-notice requirements). The company painfully realizes, however, that during this thirty-six day period, potential new product sales (or, if the rate change were one of a premium increase, earned premium revenues) could be lost.

    If a company experiences a loss of sales or a loss of earned premium revenues when needing to make rate changes, the company's competitiveness in the insurance market could diminish. Therefore, a need exists to create a flexible automated process for implementing rate changes for new and renewal business.


    Automated processes are disclosed herein that specifically provide for split effective dates in insurance rate changes (e.g., for auto insurance) according to whether the rate changes are for business that is new business or renewal business. With respect to new business, a rate change is entered and the rate change takes effect immediately. In contrast, a rate change for renewal business can be ent...