New York Codes, Rules and Regulations › Title 11 - INSURANCE › Chapter IV - Financial Condition Of Insurer and Reports to Superintendent › Subchapter C - Fire, Marine, Casualty And Surety Insurers › Part 108 - Allocation To Lines Of Business › Section 108.3 - Allocation of expenses to primary lines of business

Current through Register Vol. 46, No. 28, July 10, 2024
(a) The allocation of expenses to lines of
				  business shall be by expense groups. Each classification of expense within each
				  expense group shall be allocated separately to lines of business on the bases
				  of allocation prescribed as follows. All bases employed in such allocations
				  shall be applicable and appropriate to the expense group of which such expense
				  is a part.
Example:
Expenses which are allocated to lines of business as an
					 overhead on salaries shall be calculated in relation only to the salaries
					 included in the same expense group.
Expenses included in
								  the expense group, loss adjustment expenses
Bases of allocation
								  to lines of business
Claim adjustment services:
Direct
Actual
Reinsurance assumed
Actual
Reinsurance ceded
Actual
Commission and brokerage-direct
See commission and allowances (section
								107.3[c][2]  of
								this Title)
Allowances to managers and agents
See commission and allowances (section
								107.3[c][2]  of
								this Title)
Salaries
See special instructions relating to the allocation
								of salaries and other expenses (Part 109 of this Title)
Employee relations and welfare
Overhead on salaries
Pensions
Overhead on salaries
Directors' fees
Overhead on salaries
Travel and travel items
Special studies
Rent and rent items
Overhead on salaries
Equipment
Overhead on salaries
Printing and stationery
Overhead on salaries
Postage, telephone and telegraph, exchange and
								express
Overhead on salaries
Legal and auditing
Special studies
Income from special services
Special studies
Miscellaneous
Special studies
Expenses included in
								  the expense group, acquisition, field supervision and collection
								  expenses
Bases of allocation
								  to lines of business
Commission and brokerage:
Direct
Actual, but subject to instructions under commission
								and allowances (section
								107.3[c][2]  of
								this Title)
Reinsurance assumed
Actual
Reinsurance ceded
Actual
Contingent-net
Special studies
Policy and membership
Actual
Allowances to managers and agents
Special studies, but subject to instructions under
								commission and allowances (section
								107.3[c][2]  of
								this Title)
Advertising
Premiums
Salaries
See special instructions relating to the allocation
								of salaries and other expenses (Part 109 of this Title)
Employee relations and welfare
Overhead on salaries
Pensions
Overhead on salaries
Directors' fees
Overhead on salaries
Travel and travel items
Special studies
Rent and rent items
Overhead on salaries
Equipment
Overhead on salaries
Printing and stationery
Overhead on salaries
Postage, telephone and telegraph, exchange and
								express
Overhead on salaries
Legal and auditing
Special studies
Income from special services
Special studies
Miscellaneous
Special studies
Expenses included in
								  the expense group, general expenses
Bases of allocation
								  to lines of business
Commission and brokerage-direct
See commission and allowances (section
								107.3[c][2]  of
								this Title)
Allowances to managers and agents
See commission and allowances (section
								107.3[c][2]  of
								this Title)
Boards, bureaus an associations
Special studies
Surveys and underwriting reports
Special studies
Audit of assurance records
Special studies
Salaries
See special instructions relating to the allocation
								of salaries and other expenses (Part 109 of this Title)
Employee relations and welfare
Overhead on salaries
Pensions
Overhead on salaries
Directors' fees
Overhead on salaries
Travel and travel items
Special studies
Rent and rent items
Overhead on salaries
Equipment
Overhead on salaries
Printing and stationery
Overhead on salaries
Postage, telephone and telegraph, exchange and
								express
Overhead on salaries
Legal and auditing
Special studies
Income from special services
Special studies
Miscellaneous
Special studies
Expenses included in
								  the expense group, taxes
Bases of allocation
								  to lines of business
Taxes, licenses and fees:
State and local insurance taxes
Special studies
Insurance Dept. licenses and fees
Special studies
Payroll taxes
Overhead on salaries
All other (excluding federal income and real
								estate)
Special studies
(b)
Definitions.
(1) The term
actual
means that the expenses are susceptible of direct and
				  accurate allocation, and companies shall allocate directly to lines of business
				  and shall not employ any apportionments or estimations.
(2) For definitions of the terms
special studies, premiums and overhead on salaries,
see
				  section 106.3,
supra.