New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 3 - AUTOMOBILE INSURANCE › Subchapter 20 - REPORTING FINANCIAL DISCLOSURE AND EXCESS PROFITS › Section 11:3-20.3 - Definitions

Current through Register Vol. 56, No. 14, July 15, 2024
The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.
"Actual investment income" means that portion of income generated by investment of policyholder-supplied funds. Policyholder-supplied funds are the assets that offset the insurer's total New Jersey private passenger automobile insurance unearned premium and loss reserves without regard to whether those funds came from private passenger automobile insurance policyholders or other policyholders or were from policyholder funds from the last seven calendar years or earlier years.
"Actual loss" includes all losses and expenses except additional allowable expenses, additional non-excessive profit allowance, and holding company non-excessive subsidization. For the purposes of this calculation, additional development adjustment shall be split equally among all years used in the excess profit calculation.
"Actuarial gain" means the remainder obtained by subtracting the allowance for profit and contingencies from underwriting income, which remainder may be positive or negative.
"AIRE Allocation" means the amount received exclusive of the company's share of Investment Income from the New Jersey Automobile Insurance Risk Exchange pursuant to N.J.S.A. 39A:6A-22.
"AIRE Assessment" means the amount paid to the Automobile Insurance Risk Exchange pursuant to 39:6A-22.
"AIRE Investment Income" means the company's share of Investment Income received from the New Jersey Automobile Insurance Risk Exchange pursuant to 39:6A-22.
"ALAE" means Defense and Cost Containment Expense as stated on the statutory annual statement, formerly identified as Allocated Loss Adjustment Expense.
"Allowance for profit and contingencies" means the amount that is determined by the Return on Equity formula in accordance with 11:3-16.1 0(a)1.
"AY" means Accident Year.
"CY" means Calendar Year.
"Calendar-accident year" means the period from January 1 to December 31, during which, in the appropriate context:
1. Premium or investment income was earned;
2. Expenses were incurred; or
3. Accidents occurred which resulted in losses, loss adjustment expenses, and/or net AIRE compensation (allocation and investment income or assessments).
"Car year" means the unit of exposure equivalent to the insuring of one automobile for 12 months, or two automobiles for six months each.
"Combined profit report" means the excess profit report consisting of the aggregated results of all members within an insurance holding company system.
"Commissioner" means the Commissioner of Banking and Insurance.
"Development adjustment" means the difference obtained by subtracting:
1. Loss and loss adjustment expenses for that calendar accident year, developed to an ultimate basis and evaluated as of March 31 of the year preceding the year in which the profit report required by 11:3-20.5 is due, plus net AIRE compensation for that calendar-accident year, developed to an ultimate basis and evaluated as of March 31 of the year in which the profit report is due; from
2. Losses and loss adjustment expenses for the calendar-accident year, developed to an ultimate basis and evaluated as of March 31 of the year in which the profit report is due, plus net AIRE compensation for that calendar-accident year, developed to an ultimate basis and evaluated as of March 31 of the year in which the profit report is due.
"Direct business" means policies written by the insurer as the primary carrier, and does not reflect premiums ceded to or losses recovered from other carriers on account of reinsurance ceded, premiums received from or losses paid to other carriers on account of reinsurance assumed, or any expenses paid or incurred as a result of a reinsurance transaction.
"Excess liability" means personal catastrophe endorsements that may be purchased to cover excess personal automobile and homeowner's losses.
"Exempted types" are those kinds of coverage arising out of a specialty program which uses its own rates, rules, and policy forms which have been filed with and approved by the Department and does not include private passenger automobile insurance coverage. "Exempted types" include, but are not limited to, motorcycles, "off-road" vehicles, motor homes, antique automobiles and excess liability.
"Extraordinary loss" means that portion of actual loss above five percent of earned premium, determined for each individual calendar-accident year on all coverage combined basis.
"IBNR" means Incurred but Not Reported.
"Insurance holding company system" for the purpose of the excess profits report means two or more insurers under the same ultimate common ownership each of whom writes private passenger automobile insurance in New Jersey.
"Insurer" means an entity authorized or admitted to transact private passenger automobile insurance in New Jersey. Insurer does not include any residual market mechanism for automobile insurance for the purposes of this subchapter.
"LAD fees" mean a buy-out fee as defined in the New Jersey Personal Automobile Insurance Plan, Plan of Operation, Article 5, D8.
"Non-excessive subsidization" means the number of dollars of excess profit, as calculated pursuant to this subchapter, for an individual insurer within an insurance holding company system, that is less than or equal to .5 percent (one half of one percent) of its earned premiums for the seven calendar-accident years immediately preceding the year in which the excess profit report is due to the extent that this excess profit has not been refunded or credited to policyholders.
"Page 14" means statutory Page 14 from the insurer's annual statement for New Jersey.
"PLIGA" means the New Jersey Property-Liability Insurance Guaranty Association.
"PLIGA assessments" means the amount paid by insurers to the New Jersey Property-Liability Insurance Guaranty Association pursuant to 17:30A-8.
"PLIGA reimbursements" means any recoupment or money received from PLIGA for the payment of Excess Medical Benefits (EMB) on accidents covered under policies issued prior to January 1, 2004. (See "UCJF reimbursements" below.)
"Private passenger automobile insurance business" means direct insurance on private passenger automobiles as defined in 39:6A-2, excluding personal excess liability insurance and insurance on commercial vehicles.
"Reinvestment into New Jersey" means money spent or committed to be spent by the company that relates to its private passenger automobile insurance business in New Jersey, in accordance with a plan filed with the Department in order to offset a positive excess profit.
"Subsidization" means the number of dollars of excess profit as calculated pursuant to this subchapter, for a member of an insurance holding company system, which has not been refunded or credited to policyholders.
"Total actuarial gain" means the sum of the actuarial gains for the seven calendar-accident years immediately preceding the due date of the profit report required by N.J.A.C. 11:3-20.5, less the development adjustments submitted at the option of the insurer for the calendar-accident years beginning with the 11th calendar-accident year immediately preceding the due date of the profit report and ending with the eighth calendar-accident year immediately preceding the due date of the profit report.
"UCJF" means the Unsatisfied Claim and Judgment Fund.
"ULAE" means Adjusting & Other Expense as stated on the statutory annual statement, formerly identified as Unallocated Loss Adjustment Expense.
"Underwriting income" means the remainder obtained by subtracting the sum of all losses developed to an ultimate basis, all loss adjustment expenses developed to an ultimate basis, and all other expenses exclusive of UCJF assessments, from the sum of premiums earned and net AIRE compensation developed to an ultimate basis, which remainder may be positive or negative.
"UCJF assessments" means amounts paid by insurers to the Unsatisfied Claim and Judgement Fund pursuant to 39:6-63.
"UCJF reimbursements" means amounts received by an insurer from the Unsatisfied Claim and Judgement Fund as a result of excess medical expense benefit payments by the insurer pursuant to 39:6-73.1.