# Insurance rate making and pricing support

Canonical: https://finbryn.com/us/services/actuarial-services/insurance-rate-making-pricing-support

Finbryn provides insurance rate making and pricing support for MGAs, small insurers and captives: loss cost analysis, rate indications and the exhibits behind a state filing, with the actuarial memorandum signed by the insurer's own actuary or another qualified actuary it engages. Checked 2026-10-16 against the NAIC rate filing chart (state entries dated June 2026).

Rate making is the arithmetic behind a premium: expected losses and expenses, a provision for profit and risk, and a split of the total across the characteristics that predict cost. In the US each state's regulator reviews the result on its own rules, so the same indication can need a prior approval in one state, a filing before use in another and a filing after use in a third.

Finbryn prepares the analysis and the exhibits. We check premium and loss data, build the loss development and trend analysis, select expense and profit provisions with you, produce the indication and the rating-variable relativities, document any model, and assemble the exhibits in the order the state's checklist asks for. The insurer files them, normally through the NAIC's SERFF system, and the filing stays in the insurer's name.

The actuarial memorandum and any certification that a filing requires are signed by the insurer's own actuary or another qualified actuary the insurer engages, named in the engagement letter. Finbryn doesn't sign them, doesn't file with the state, and is never an insurer's Appointed Actuary. It gives no legal advice on whether a rating variable is permitted in a state; the insurer's counsel does that.

The standards that frame the work have dates worth knowing. ASOP No. 53 on estimating future costs took effect August 1, 2018, and ASOP No. 29 on expense provisions took effect July 1, 2024. Machine-learning models, which many insurtechs now use in pricing, fall under ASOP No. 56 on modeling, effective October 1, 2020. The sections below cover the standards, the state review methods, what a filing holds, a worked indication and the model question.

What you get: Premium and loss data checks with a written exceptions list; Loss development, trend and expense analysis behind the indication; Rate indication and rating-variable relativity exhibits; Model documentation covering data, validation and limitations; Filing exhibits assembled for the insurer's SERFF submission

Software we work in: Microsoft Excel, Python, R

How filing works: We prepare the return and the working papers. A credentialed signer or licensed partner signs and files it, or you file it yourself.

## Which actuarial standards shape a rate indication?

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.

| ASOP | Topic | Effective date | Where it bites |
| --- | --- | --- | --- |
| 53 | Estimating future costs for prospective property and casualty risk transfer | August 1, 2018 | Loss cost projection |
| 29 | Expense provisions for prospective property and casualty risk transfer | July 1, 2024 | Expense load in the indication |
| 54 | Pricing of life insurance and annuity products | December 1, 2018 | Life and annuity pricing |
| 12 | Risk classification, for all practice areas | May 1, 2006 | Choice of rating variables |
| 25 | Credibility procedures | May 1, 2014 | Weighting own data against a complement |
| 23 | Data quality | April 30, 2017 | Review of premium and loss data |
| 56 | Modeling, general | October 1, 2020 | Pricing models and their documentation |

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](https://www.actuarialstandardsboard.org/standards-of-practice/), checked 2026-10-16.

## How do states review rates, and how do the methods differ?

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:

| State | Method | Lines | Citation on the chart |
| --- | --- | --- | --- |
| California | Prior approval | Private passenger auto and other personal and commercial lines | Ins. Code 1861.05, 1851, 1625.5 |
| New York | Prior approval (30 days, extendable to 45) | Auto, personal and commercial lines, among others | Ins. Law 2305, 2328 |
| North Dakota | Prior approval (60 days) | Property and casualty | N.D. Cent. Code 26.1-25-04 |
| Texas | File and use | Most lines, with exceptions such as workers' compensation and title | Ins. Code 2251.001 to 2251.101 |
| Illinois | Use and file (10 days) | Private passenger auto and homeowners, among others | 50 Ill. Adm. Code 754.10 to 754.40 |
| Florida | File and use (60 days) or use and file (30 days), insurer's option | Auto | Fla. Stat. 627.0651 |

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.

## What does a rate filing contain?

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.

| Rule item | What it asks for | What Finbryn prepares |
| --- | --- | --- |
| Rate filing checklist, rate change information, SERFF rate data | The summary of change and the data sheet | Rate change exhibit and SERFF data sheet |
| Actuarial memorandum and actuarial support | The memorandum, relativity analyses, rate indications | Indication and relativity exhibits, memorandum draft for the signer |
| Policyholder impact and county averages | Impact information for owner-occupied homeowner and personal auto filings where the spread between minimum and maximum policyholder change exceeds 5%; county averages for owner-occupied homeowners | Impact distribution exhibits |
| Historical premium and loss, expense, profit provision | The experience and the provisions | Experience, expense and profit exhibits |
| Third-party data and third-party model information | What outside data and models were used | Data lineage and model documentation |

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.

## How is a rate indication built?

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.

Diagram: From premium and loss data to a rate indication. Six steps: data checks, loss development, trend, expense and profit provisions, credibility weighting, and the indication, with the qualified actuary signing the memorandum at the end.

## Where do machine-learning pricing models fit?

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.

## Who signs a rate filing, and what does Finbryn not do?

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](/services/actuarial-services/loss-reserve-studies). If the pricing work needs data pipelines or dashboards, see [finance data pipelines and dashboards](/services/finance-ai-automation/finance-data-pipelines-dashboards).

## The process

1. **Agree the filing scope and states**: List the lines, the states and each state's review method from the NAIC chart, and who files in SERFF.

2. **Check the premium and loss data**: Reconcile premium and loss files to the ledger and return an exceptions list under the ASOP 23 frame.

3. **Build development, trend and provisions**: Produce loss development, trend and the expense and profit selections for your sign-off.

4. **Produce the indication and relativities**: Apply credibility, calculate the overall change and the rating-variable relativities, and document any model.

5. **Assemble the filing exhibits**: Arrange the exhibits in each state's checklist order, with a memorandum draft for the signer.

6. **A qualified actuary reviews and signs**: The actuary named in the engagement letter reviews the file and signs the memorandum.

7. **The insurer files and answers objections**: The insurer submits through SERFF; Finbryn prepares the exhibits that support its responses.

## Common problems we fix

| The problem | How we fix it |
| --- | --- |
| The state wants exhibits in an order the model doesn't produce | We build the workbook once and re-cut it to each state's checklist, so the numbers don't change between submissions. |
| Nobody can say where a trend selection came from | Every selection carries its data cut, its method and the judgment behind it, kept in a trail the reviewer can follow. |
| A new program has too little data to stand on | We apply credibility with a stated complement and show how the answer moves if the weights change. |
| A machine-learning model has no documentation | We write the data lineage, variable rationale and validation results into a model file for the signer and the regulator. |
| Filing in several states turns into several different answers | One indication underlies every state, with a short note on how each method and checklist changes the presentation. |

## By the numbers

| Figure | What it means | Source |
| --- | --- | --- |
| Aug 1, 2018 | ASOP No. 53 on estimating future costs for property and casualty risk transfer took effect | [actuarialstandardsboard.org/standards-of-practice](https://www.actuarialstandardsboard.org/standards-of-practice/) (2026-10-16) |
| Jul 1, 2024 | ASOP No. 29 on expense provisions took effect | [actuarialstandardsboard.org/standards-of-practice](https://www.actuarialstandardsboard.org/standards-of-practice/) (2026-10-16) |
| 29 | Jurisdictions listed as having adopted the NAIC's AI model bulletin, status as of October 8, 2026 | [content.naic.org/sites/default/files/legal-adoption-map-ai-model-bulletin.pdf](https://content.naic.org/sites/default/files/legal-adoption-map-ai-model-bulletin.pdf) (2026-10-16) |
| 1/8/2024 | Effective date of the latest amendment to 28 Texas Administrative Code 5.9334, which lists the contents of a rate filing | [law.cornell.edu/regulations/texas/28-Tex-Admin-Code-SS-5-9334](https://www.law.cornell.edu/regulations/texas/28-Tex-Admin-Code-SS-5-9334) (2026-10-16) |

## Glossary

- **Rate indication**: The change in rates that an analysis of projected losses, expenses and profit suggests, before any selection or capping.

- **Permissible loss ratio**: The share of premium available for losses and loss adjustment expense after expenses and the profit and risk provision.

- **Loss development**: The pattern by which reported losses grow to their ultimate cost as claims are reported and settled.

- **Credibility**: The weight given to a book's own experience when it is blended with a complement, such as industry data or a prior indication.

- **Relativity**: The factor that expresses how the rate for one class or territory compares with a base rate.

- **Prior approval**: A filing method in which the regulator approves a rate before the insurer uses it.

- **File and use**: A filing method in which the insurer files a set number of days before the rate takes effect.

- **Use and file**: A filing method in which the insurer files within a set number of days after the rate takes effect.

- **Actuarial memorandum**: The document that explains the methods, data and assumptions behind a rate filing, signed by the actuary who stands behind it.

## Frequently asked questions: Insurance rate making and pricing support

**Q: How do insurers set rates and file them with the state?**

A: They project losses, expenses and profit, then compare the result with current premium to get an indication, split it across rating variables and file the exhibits with each state under its method: prior approval, file and use, use and file or flex rating (NAIC chart, entries dated June 2026). Finbryn prepares the analysis and exhibits; the insurer files.

**Q: What does an actuarial memorandum for a rate filing contain?**

A: It varies by state. Texas, under 28 TAC 5.9334(h), lists an actuarial memorandum together with actuarial support such as relativity analyses and rate indications, plus historical premium and loss, expense, profit provision, and third-party data and model information (rule amended effective 1/8/2024). The memorandum is signed by the insurer's own actuary or another qualified actuary the insurer engages.

**Q: Can a small MGA outsource its pricing analysis?**

A: Yes, as analysis and exhibits. The filing is made in the name of the insurer that carries the risk, and the Texas rule puts the duty to document the rates on insurers. Finbryn prepares the indication, relativities and documentation for the carrier's filing team and a qualified actuary to review (checked 2026-10-16).

**Q: Which actuarial standards apply to property and casualty pricing?**

A: ASOP No. 53 (effective August 1, 2018), ASOP No. 29 on expenses (July 1, 2024), ASOP No. 12 on risk classification (May 1, 2006), ASOP No. 25 on credibility (May 1, 2014), ASOP No. 23 on data (April 30, 2017) and ASOP No. 56 on modeling (October 1, 2020), according to the Actuarial Standards Board list.

**Q: What is a file-and-use state?**

A: One where the insurer files rates a set number of days before they take effect, without waiting for approval. Texas is listed that way for most lines on the NAIC chart, while California and New York are prior approval and Illinois is use and file for private passenger auto and homeowners (chart entries dated June 2026).

**Q: Do machine-learning pricing models need special documentation?**

A: They need the same documentation as any model under ASOP No. 56, and Texas asks for third-party data and model information in the filing. The NAIC's AI model bulletin, adopted December 4, 2023, is listed as adopted in 29 jurisdictions as of October 8, 2026. Finbryn documents data lineage, variables, validation and limitations.

**Q: What does insurance rate making support cost?**

A: The fee depends on the number of lines and states, the quality of the premium and loss data, whether a model must be built or documented, and how many objections arrive. We found no public fee schedule for filing support when we checked on 2026-10-16, so we publish no range. Finbryn quotes in writing after seeing a data sample, and the quote names who signs.

**Q: Does Finbryn file rates or act as the appointed actuary?**

A: No to both. The insurer files, usually through SERFF, and Finbryn is never an insurer's Appointed Actuary. Statements of actuarial opinion on reserves follow ASOP No. 36 (effective October 1, 2024) and are signed by the actuary who gives them, whom the insurer appoints.

Related services:
- [Loss reserve studies for workers' compensation and liability self-insurance](https://finbryn.com/us/services/actuarial-services/loss-reserve-studies)
- [White-label actuarial support for accounting firms and TPAs](https://finbryn.com/us/services/actuarial-services/white-label-actuarial-support)
- [IFRS 17 implementation and reporting support for US insurers](https://finbryn.com/us/services/actuarial-services/ifrs-17-implementation-support)
- [Finance data pipelines and dashboards](https://finbryn.com/us/services/finance-ai-automation/finance-data-pipelines-dashboards)

Industries:
- [Insurance agencies](https://finbryn.com/us/industries/insurance-agencies)

Related guides:
- [How to Choose an Actuarial Support Provider in the USA](https://finbryn.com/us/guides/how-to-choose-actuarial-support-provider)

## Sources

1. [NAIC, Rate Filing Methods for Property/Casualty Insurance, Workers' Compensation, Title (state insurance chart, 2026)](https://content.naic.org/sites/default/files/model-law-chart-pa-10-rate-filing-methods-for-property-casualty-insurance-workers-comp-title.pdf) (2026-10-16)
2. [28 Texas Administrative Code 5.9334, Requirements for Rate and Rule Filing Submissions](https://www.law.cornell.edu/regulations/texas/28-Tex-Admin-Code-SS-5-9334) (2026-10-16)
3. [Actuarial Standards Board, Standards of Practice list with effective dates](https://www.actuarialstandardsboard.org/standards-of-practice/) (2026-10-16)
4. [Actuarial Standards Board, ASOP No. 23 Data Quality](https://www.actuarialstandardsboard.org/asops/data-quality/) (2026-10-16)
5. [NAIC, Implementation of the Model Bulletin on the Use of Artificial Intelligence Systems by Insurers (status as of October 8, 2026)](https://content.naic.org/sites/default/files/legal-adoption-map-ai-model-bulletin.pdf) (2026-10-16)
6. [NAIC, System for Electronic Rates & Forms Filing (SERFF)](https://content.naic.org/industry/serff) (2026-10-16)
7. [American Academy of Actuaries, US Qualification Standards](https://www.actuary.org/professionalism/us-qualification-standards/) (2026-10-16)

Reviewed October 2026

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## Contact
- Phone: +1 (312) 313-7376
- Email: hello@finbryn.com
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