Insurance rate making and pricing support

Seven standards of practice cover most pricing work. The Actuarial Standards Board lists each with its effective date, and the table adds what we use it for.

The signer of the memorandum applies the standards. The engagement letter says which ones, because a book of commercial auto and a book of term life don't share the same set. All dates are from the Actuarial Standards Board list, checked 2026-10-16.

The NAIC's chart of rate filing methods sorts states by how a regulator sees a rate change. In a prior approval state the regulator approves before use, and some states deem a filing approved after a set number of days. In a file-and-use state the insurer files a set number of days before the rate takes effect. In a use-and-file state it files within a set number of days after. Flex rating lets small changes through without approval, up to a stated percentage.

The chart is © 2026 NAIC, and every state entry carries a June 2026 review date. A selection shows how far apart states sit:

So a multistate filer runs a calendar, not a single submission. Our exhibits are built once and re-cut to each state's checklist, and the memo notes which methods apply to which states. The chart is the starting point; counsel or the state's website confirms the current rule before you file.

Texas shows what a detailed checklist looks like. Under 28 Texas Administrative Code 5.9334(h) (amended effective 1/8/2024), a filing must contain 13 items, and the rule says insurers must provide enough documentation to justify the specific rates or revisions they propose. The table groups them and shows what we prepare.

Other states ask for different forms. A short-track filing in Texas needs less: a checklist, rate change information, SERFF rate data and a side-by-side comparison or mark-up. The NAIC describes SERFF as the most cost-effective way to submit rates and forms filings to states and jurisdictions (NAIC page, undated, checked 2026-10-16). Finbryn assembles the exhibits for your submission; it doesn't submit.

An indication compares the losses a book is projected to produce with the share of premium available to pay them, then asks how far the rates must move to close the gap. The flow shows the usual path: data checks, loss development, trend, provisions, credibility and the indication.

The illustration uses made-up numbers and the loss ratio method, one of several. Expenses are 30% of premium and the profit and risk provision is 8%, so the permissible loss and loss adjustment expense ratio is 100% - 30% - 8% = 62%. The projected ratio, after development and trend, is 66.0%. The indicated change is 66.0 / 62.0 - 1 = +6.5%.

Credibility then blends the book's own indication with a complement, following ASOP No. 25. With a credibility of 0.60 and an illustrative complement of +3.0%, the selected change is 0.60 x 6.45% + 0.40 x 3.0% = 3.87% + 1.20% = +5.1%. Real filings add territory and class relativities, caps and capping rules, and a check against the state's limits.

The point is traceability. Every number in the filing should trace to a data cut, a development factor, a trend selection or a stated judgment, with the signer's name beside the memorandum. Finbryn keeps that trail in a workbook the regulator's reviewer can follow.

A machine-learning model is still a model, and ASOP No. 56 (effective October 1, 2020) applies to it. Risk classification under ASOP No. 12 still governs how rating variables are chosen, and ASOP No. 23 still asks the actuary to review data for reasonableness and consistency for the purpose of the assignment. Texas adds a filing requirement of its own: information on third-party data and third-party models (28 TAC 5.9334(h)).

The regulatory frame is moving. The NAIC adopted a model bulletin on insurers' use of artificial intelligence systems on December 4, 2023. Its implementation map, status as of October 8, 2026, lists 29 jurisdictions as having adopted it, and separately lists insurance-specific rules or guidance in California, Colorado, New York and Texas. The map doesn't say whether a state's version has every element of the model.

Finbryn's role is documentation and testing. We document the data lineage, the variable list and the reason for each variable, the holdout validation and the limitations, in a form the signing actuary and the regulator can read. Whether a variable is allowed is a legal question for the insurer and its counsel. Where the model replaces a rating plan, the filing still needs the exhibits above.

A rate filing that needs an actuarial memorandum is signed by the insurer's own actuary or another qualified actuary the insurer engages, named in the engagement letter. Where the person gives an opinion that others will rely on, the Academy's US Qualification Standards, in effect as of January 1, 2022, set the education, experience and continuing education the person needs. Finbryn prepares the indication, exhibits and documentation for that review and does not sign.

Four things sit outside the work. Finbryn doesn't file with the state; the insurer does, in its name. Finbryn doesn't act as the Appointed Actuary of an insurer, and it doesn't provide the statutory statement of actuarial opinion on reserves, which follows ASOP No. 36 (effective October 1, 2024) and is signed by the actuary who gives it. Finbryn gives no legal advice about rating factors or unfair discrimination. And it doesn't take protected health information or other personal data beyond what the pricing data needs.

If the next step is reserves, see loss reserve studies. If the pricing work needs data pipelines or dashboards, see finance data pipelines and dashboards.