California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4.8 - Review of Rates › Article 4 - Determination of Reasonable Rates › Section 2644.8 - Projected Defense and Cost Containment Expenses

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) "Projected defense and cost containment
				  expenses" means the company's historic costs per exposure associated with the
				  defense and cost containment of claims, adjusted for catastrophes, developed
				  and trended in the manner described in sections
				  2644.5,
				  2644.6 and
				  2644.7.
(b) Defense and cost containment expenses may
				  be added to losses for loss development and trend or may be developed using
				  ratios of defense and cost containment expenses to losses. The insurer shall
				  demonstrate that its selection is the most actuarially sound.
(c) For professional liability and errors and
				  omissions coverage, the insurer shall tender an alternative computation of
				  projected defense and cost containment expenses, which the Commissioner shall
				  approve if the Commissioner finds the projection to have been made in the most
				  sound actuarial manner. Nothing in this section precludes the Commissioner from
				  requiring the additional filing of projected defense and cost containment
				  expenses computed in the manner specified in sections (a) and (b).
1. New
					 section filed 8-13-91 as an emergency; operative 8-13-91 (Register 92, No. 3).
					 A Certificate of Compliance must be transmitted to OAL 12-11-91 or emergency
					 language will be repealed by operation of law on the following
					 day.
2. Repealed by operation of Government Code section
					 11346.1(g)
					 (Register 92, No. 15).
3. New section refiled 2-14-92 as an
					 emergency; operative 2-14-92 (Register 92, No. 15). A Certificate of Compliance
					 must be transmittted to OAL 6-15-92 or emergency language will be repealed by
					 operation of law on the following day.
4. Repealed by operation of
					 Government Code section
					 11346.1(g)
					 and new section filed 3-15-95; operative 3-15-95. Submitted to OAL for printing
					 only pursuant to Government Code section
					 11343(a)(1)
					 (Register 95, No. 11).
5. Amendment of section heading and section
					 filed 1-3-2007; operative 4-3-2007. Submitted to OAL for printing only pursuant
					 to Government Code section
					 11340.9(g)
					 (Register 2007, No. 1).
6. Amendment of subsection (b) and repealer
					 and new subsection (c) filed 5-16-2008; operative 5-16-2008. Submitted to OAL
					 for printing only pursuant to Government Code section
					 11340.9(g)
					 (Register 2008, No. 20).
7. Change without regulatory effect
					 amending subsection (c) filed 7-14-2021 pursuant to section
					 100, title 1, California Code of
					 Regulations (Register 2021, No. 29). Filing deadline specified in Government
					 Code section
					 11349.3(a)
					 extended 60 calendar days pursuant to Executive Order
					 N-40-20.
Note: Authority cited: Sections
						1861.01 and
						1861.05,
						Insurance Code; and 20th Century v. Garamendi, 8 Cal.4th 216 (1994). Reference:
						Sections
						1861.01 and
						1861.05,
						Insurance Code; and Calfarm Insurance Company v. Deukmejian (1989) 48 Cal.3d
						805.