What is the 'Bureau Rate'

Bureau rate refers to a standardized per-unit price for insurance published by a state insurance bureau. Traditionally, the rate was calculated by each bureau after collecting and analyzing rate data submitted by member insurance carriers in each state. Carriers were not required to adhere to these dates, but they could be instructive to companies and consumers. Bureau rate is a somewhat obsolete term; the rate has been replaced by industry-wide loss data published by each state to assist carriers in setting future rates. The rate data continues to be required among a long list of financial reports by each state for regulatory approval.

BREAKING DOWN 'Bureau Rate'

The bureau rate is one of many services historically provided by state insurance bureaus. It is also known as the manual rate, a reference to periodic manuals published by state regulators. Since then, both regulatory filings by insurance companies and publishing of industry data by states have largely moved to electronic formats. The National Association of Insurance Commissioners (NAIC) has developed an electronic data collection platform known as the System for Electronic Rates and Form Filing (SERFF).

The SERFF system allows the states to collect and study data from every carrier selling insurance in their state. It allows carriers to introduce new products for regulatory approval and compliance assurance. It also streamlines the filing process for both regulators and insurers by creating groups of states and carriers who can submit and review certain financial reports collectively. For instance, a lead state will often review a company’s reports on behalf of other regulatory bodies. The lead state is typically that which hosts the largest share of that company’s business.

Bureau Rates and Loss Costs

The SERFF collects carrier data via a series of electronic reports while other reports are delivered in physical form to the state regulator. Included among these reports are loss, or payout, reports that have largely replaced the publishing of bureau rates by state regulators. Each carrier provides their own loss cost summary. The state then summarizes state-wide losses, and individual carriers use this data to project future losses. They aggregate these projected losses along with other fixed non-claim costs to create their own rate structures.

An example of a loss report that many states require is the Reasonableness of Assumptions Certification for Implied Guaranteed Rate Method. This report looks at the carriers’ past projections of claim payouts based on the implied guaranteed rate method for setting aside future claim reserves.

RELATED TERMS
  1. Admitted Insurance

    Admitted insurance is purchased from an insurance company that ...
  2. Insurance Claim

    An insurance claim is a request for compensation for a covered ...
  3. Voluntary Reserve

    Voluntary Reserve is a monetary sum held by insurance companies ...
  4. National Association of Insurance ...

    National Association of Insurance Commissioners (NAIC) is a national ...
  5. Alien Insurer

    An alien insurer resides in a country other than the one in which ...
  6. Insurance Industry ETF

    An insurance industry ETF invests primarily in insurance companies ...
Related Articles
  1. Insurance

    What If Your Long-term Care Insurance Carrier Goes Bust

    When a long-term care insurance carrier goes bust, what happens to policyholders?
  2. Insurance

    Understanding your insurance contract

    Learn how to read one of the most important documents you own: your insurance contract.
  3. Insurance

    Insurance Companies Vs. Banks: Separate And Not Equal

    Insurance companies and banks are both financial intermediaries. However, they don't always face the same risks and are regulated by different authorities.
  4. Insurance

    Could You Be Owed a Life Insurance Payout?

    If you’re not certain whether or not your deceased loved one had a life insurance policy, it doesn’t hurt to do a little research.
  5. Insurance

    The History of Insurance in America

    Insurance was a latecomer to the American landscape, largely due to the country's unknown risks.
  6. Insurance

    How Living Abroad Can Increase Your Insurance Premiums

    When you live outside the U.S for an extended period of time, your auto insurance resets. We look at how you can work around this.
  7. Insurance

    Homeowner's Insurance Guide: A Beginner's Overview

    Everything new homeowners need to know about homeowner's insurance to protect their residence.
  8. Insurance

    Using Life Insurance to Help Cover Your Business

    Here are the answers to some questions commonly asked when using life insurance to cover the costs of your business when you pass away.
  9. Managing Wealth

    Should You Insure Your Collectibles?

    Insuring your valuable collectibles is just as important as insuring the rest of your home's contents.
  10. Personal Finance

    What Car Insurance Companies Cover You in Canada and Mexico?

    Canada generally honors U.S. insurance policies, but when traveling to Mexico, it's important to get a supplemental policy.
RELATED FAQS
  1. How do I choose which insurance company to use?

    Picking an insurance company to use is not an easy task, but considering these factors will help you make this important ... Read Answer >>
  2. Can your insurance company cancel your policy without notice?

    Learn about your rights as an insured when it comes to your insurance policy being canceled, including how to access your ... Read Answer >>
  3. What level of reserve ratios is typical for an insurance company to protect against ...

    Read about the NAIC-inspired risk-based capital, or RBC, requirements imposed on American insurance companies to safeguard ... Read Answer >>
Hot Definitions
  1. Business Cycle

    The business cycle describes the rise and fall in production output of goods and services in an economy. Business cycles ...
  2. Futures Contract

    An agreement to buy or sell the underlying commodity or asset at a specific price at a future date.
  3. Yield Curve

    A yield curve is a line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but ...
  4. Portfolio

    A portfolio is a grouping of financial assets such as stocks, bonds and cash equivalents, also their mutual, exchange-traded ...
  5. Gross Profit

    Gross profit is the profit a company makes after deducting the costs of making and selling its products, or the costs of ...
  6. Diversification

    Diversification is the strategy of investing in a variety of securities in order to lower the risk involved with putting ...
Trading Center