MIC Property and Casualty Insurance Corporation, part of Ally Insurance, is seeking approval for a rate and rule revision to its GAP insurance program in Georgia, effective June 1, 2026, for both new and renewal business.
The filing proposes an overall rate increase of 5.6%, well below the indicated 82%, and includes the removal of a commercial use vehicle surcharge due to low usage and limited verification. The program covers 32 policyholders and approximately $3.3 million in written premium, with business primarily sourced through auto dealers and online used car platforms.
The gap between indication and action is stark. While the actuarial indication calls for an 82% increase, the company is taking just 8.8% at the state group level and 5.6% in Georgia. This comes against a countrywide loss ratio of 137% in 2024, pointing to a product that is currently unprofitable. The approach suggests a deliberate tradeoff—prioritizing dealer relationships and distribution stability over immediate rate adequacy.
Notably, the base rate is decreasing from $349 to $322. The overall increase is instead driven by adjustments to rating factors such as vehicle type, finance rate, and loan-to-value. This structure allows the company to implement changes more selectively while limiting visible disruption at the point of sale.
Several segments remain materially underpriced relative to indication. Small vehicles carry an indicated factor of 3.61x versus a proposed 1.35x, while loans with finance rates above 18% show an indicated factor of 3.56x compared to a proposed 1.25x. Both segments are typically associated with higher-risk borrowers and deeper loan gaps, yet the filing stops well short of actuarial levels.
The filing also highlights a 25% cancellation rate, which introduces additional pressure. Pro rata refunds return a disproportionate share of premium relative to remaining exposure, prompting the introduction of a 9% surcharge to offset the impact.
The removal of the $50 commercial use surcharge is also notable. Cited reasons include low usage and lack of verification, suggesting either limited data capabilities or difficulty enforcing the distinction within the existing book.
Overall, the filing reflects a strategy of incremental adjustments within a structurally challenged product. The actuarial memorandum points to rising GAP losses since 2020, driven by elevated vehicle prices and increased depreciation, with continued pressure expected. The product provides contractual liability coverage with a standard $50,000 limit.