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November 23, 2011

Insurance Commissioner Mike Kreidler
Office of the Insurance Commissioner
P.O. Box 40255
Olympia, WA 98504-0255

Re: Time Insurance Company rate increase request #235053

Dear Commissioner Kreidler:

Consumers Union, the policy and advocacy division of Consumer Reports, writes to provide you  with comments on the rate filing of Time Insurance Company (“TIC”). Consumers Union is concerned that TIC has not provided sufficient information to justify its proposed rate increase.

TIC is proposing an overall rate increase of 37% ranging from a minimum increase of 33.9% to a maximum increase of 40.3%. The average annual premium increase per policyholder is projected to be $1,249.

As detailed in the attached memo by our consulting actuary, Allan I. Schwartz, the rate filing is poorly documented and unsupported. Our main concerns with the filing are:

1. The numerical calculations underlying the earned premium, expected claims and actual claims were not provided.

2. The assumptions used by TIC were not supported. TIC assumes a 16% annual claims trend. It appears TIC uses Assurant Health experience rather than TIC. It is not appropriate for TIC to use its parent company’s experience. TIC is regulated as an individual corporation and cannot rely on Assurant Health to meet solvency standards. It also appears that TIC uses nationwide experience rather than experience for Washington.

3. TIC provides inconsistent values in the rate filing.

Consumers Union urges the Office of the Insurance Commissioner to reject TIC’s extraordinarily large proposed rate increase. The filing is incomplete and lacks justification.

Sincerely,

Laurie Sobel
Senior Attorney

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