1. Forms
2. PP
3. PP-90-02

What the form is

The PP 90 02 Transition Endorsement is an insurance policy endorsement used in Personal Auto Insurance. Its primary function is to facilitate a smooth transition for existing policyholders when an insurance company implements a new or significantly revised auto insurance policy program (such as the Special Personal Auto Policy PP 90 01). This endorsement modifies the terms of the new policy to address how coverages will apply in relation to the expiring policy. It aims to ensure clarity and continuity, or to clearly outline specific changes being introduced with the new policy program.

Classes of business it applies to

This endorsement is specifically for Personal Auto Insurance. It is used in scenarios where an insurer is migrating its existing book of personal auto policyholders to an updated policy form or program.

• Example: An insurance company is replacing its older proprietary auto policy form with the new ISO-based 'Special Personal Auto Policy (PP 90 01)'. For a policyholder renewing their auto insurance, the PP 90 02 Transition Endorsement would be attached to their new PP 90 01 policy. This endorsement might clarify how a specific coverage (e.g., transportation expenses) that was treated differently in the old policy will now be handled under the new policy terms, or it might temporarily preserve a benefit from the old policy for the current renewal term.

Special considerations

• Purpose: The main goal is to manage policyholder expectations and prevent confusion or disputes arising from changes between the old and new policy language.
• Temporary Use: Transition endorsements like PP 90 02 are generally intended for temporary use during the rollout period of a new policy program. Once the transition is complete, they may no longer be needed for subsequent renewals.
• Clarity is Key: The endorsement must clearly communicate any material changes in coverage, definitions, limits, or exclusions that policyholders will experience under the new policy.
• Regulatory Compliance: This endorsement, as part of a policy program change, must be filed with and approved by the relevant state insurance regulatory authorities.
• Example: If the new Special Personal Auto Policy (PP 90 01) introduces a new deductible structure for comprehensive coverage, the PP 90 02 Transition Endorsement might explicitly state how this new structure applies, especially if it differs significantly from the policyholder's previous coverage. It could also, in some cases, allow the policyholder to retain their old deductible structure for one renewal term.

Key information for agents and underwriters

• Agent Communication: Agents play a crucial role in explaining the PP 90 02 to renewing policyholders. They must be able to clearly articulate why the endorsement is being used and how it, along with the new base policy, affects the insured's coverage.
• Underwriting Guidelines: Underwriters should be aware of the specific provisions of the transition endorsement and how they interact with the new policy form (e.g., PP 90 01). This includes understanding any temporary continuations of prior coverage or specific modifications to the new policy's terms.
• Risk Assessment: While the endorsement itself is procedural, the underlying changes in the new policy program it facilitates might impact risk assessment. The transition endorsement helps ensure these changes are applied consistently.
• System Updates: Insurers need to ensure their policy administration and claims systems are correctly configured to handle policies with this endorsement and the new policy forms.
• Example: If the new PP 90 01 policy has stricter requirements for custom equipment coverage, the PP 90 02 Transition Endorsement might provide a grace period for existing policyholders to declare such equipment or purchase specific endorsements. Agents would need to advise clients accordingly, and underwriters would need to track compliance.