Unisun-Guaranty National Files Proposed New Rate Structure

Nonstandard automobile insurer Unisun-Guaranty National filed a proposed new rate structure with the South Carolina state insurance commission earlier this month. With its purchase of Charleston-based Unisun Insurance at the end of 1997, Guaranty National became the largest of South Carolina's three reinsurance facility insurers. The new rates were filed in preparation for the state's transition to a voluntary market environment, which takes place on Mar. 1, 1999.

According to Guy Dougherty, senior product manager, Guaranty National expects that the proposed rates, which will be based on differentials, such as zip code, driver age, and driver history, will be competitive with both nonstandard and standard insurers in the state. He anticipates that many high-risk drivers with good driving records may see a decline in their insurance costs, while some rates will increase slightly.

Already, Guaranty National has begun taking selected drivers out of the Facility and giving them improved open market rates. No rate change was filed for existing policyholders.

Currently, Guaranty National insures approximately one out of every 11 South Carolina drivers, and close to 75% of those are in the Facility. The Company estimates that under the new law, most of those drivers will revert to the open market. Guaranty National began sending out renewal notices around the first of the year.

In additional preparations for insurance reform, Guaranty National says it has streamlined many of its operations in the state. According to Dougherty, the Company has:

• strengthened its customer service force to include enhanced procedures to ensure faster response time
• consolidated claims operations from six to two locations in Charleston and Greensboro, NC
• reinforced its claims force by nearly doubling the staff size
• significantly remodeled and expanded existing office sites
• improved the computer technology available to employees.

According to Dougherty, the change in the South Carolina operating environment represents an opportunity for Guaranty National to provide excellent rates to all segments of the market from a clean driver with no violations, to those drivers who have a few accidents or violations on their record.