Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 10 - Other Entities and Miscellaneous › Chapter 03 - Insurance Companies › Section 35-3-10-03-102 - OPERATING EXPENSE

Current through June 25, 2024
1. Insurance
				  companies should compute their deductions for operating expenses in a manner
				  consistent with the computations of such deductions as shown by the annual
				  statement filed with the Commissioner of Insurance, provided that, adjustments
				  must be made for deductions not allowable under the statute and, provided
				  further that, accruals will be allowed only if income is reported on the
				  accrual basis. Returns, with supporting schedules where necessary, must be
				  reconcilable with the annual statement.
2. The method used in the annual statement in
				  computing home office rent and furniture and equipment expense should be
				  followed on the return. Companies having unrecovered costs in furniture and
				  equipment, because of their departure from the annual statement in prior years,
				  may continue charging depreciation on such items until cost has been
				  recovered.
3. In the case of income
				  determined by direct accounting, when an expense which is specific to
				  Mississippi has been claimed as a direct deduction from Mississippi income, the
				  corresponding expense for all other jurisdictions must be excluded from
				  expenses to be apportioned. When a particular type of income is not reportable
				  to this state because it is beyond its taxing jurisdiction, no expense incurred
				  in earning such income shall be deducted on the return.
4. Companies reporting a part of their
				  investment income to this state must separately apportion non-allocable
				  expenses of the investment department by using the ratio of Mississippi
				  investment income to company-wide investment income. A supplement should be
				  attached to the return for this purpose.
5. Life companies and accident and health
				  companies shall apportion to this state a part of allowable, non-allocable
				  expenses by using the ratio between Mississippi gross premiums and annuity
				  considerations reported and company-wide gross premiums and annuity
				  considerations. "Gross premiums" shall mean direct writing, less return
				  premiums, plus reinsurance assumed. The Commissioner will allow modifications
				  of this formula when it can be shown that greater accuracy will be achieved
				  thereby. Companies having both life and accident and health business must
				  separately apportion expenses of each department. A supplement should be
				  attached to the return for this purpose.
6. The following provisions of this
				  regulation are applicable only to non-life companies determining their
				  Mississippi income by the direct accounting method:
a. A part of nonspecific loss adjustment
				  expense shall be apportioned to this state by using the ratio between
				  Mississippi direct losses and company-wide direct losses.
b. A part of other allowable non-allocable
				  expenses shall be apportioned to this state by using the ratio between
				  Mississippi gross premiums reported and company-wide gross premiums. "Gross
				  premiums" shall mean direct writings less return premiums, plus reinsurance
				  assumed.